- How to pass the hurdle of Brexit while attracting EU talent
- 1. Create an attractive package
- Make it as easy as possible
- Start a buddy system
- Think progressively
- 2. Location, location, location
- 3. Woo EU graduates
- 4. Look local
- Take heart
- Brexit: Keep Calm and Carry On
- More Perspective
- Why International
- So, What Should You Do? What Are We Doing?
- What happens next?
- Brexit and data protection: keep calm and carry on?
- EU and UK data protection law
- Future solutions
- Possible UK liberalisation?
- Impact on “one-stop shop” proposals
- What to do now
How to pass the hurdle of Brexit while attracting EU talent
After years of wrangling, Brexit is finally here. On January 1, 2021, the UK officially left the European Union and the free movement of many people ended.
Overnight, the employment of citizens from the European Economic Area—which includes the countries of the European Union, Iceland, Liechtenstein and Norway—and Switzerland became a much more complicated affair that will undoubtedly deter people from seeking work in the UK. *British employers will have to up their game to attract the right international talent for their companies to thrive. But how can they do this when the s of Germany, the Netherlands and Ireland are offering such attractive opportunities without the barriers of Brexit, both in terms of paperwork and what it says about the British attitude towards Europeans?
When the referendum results were announced in 2016, many employers across the country felt a knot in their stomachs. The impact was immediate: official data showed that migration from the EU to the UK dropped to 57,000 people in the year to September 2018, the lowest figure since 2009 and a 70% decline on the year before the Brexit vote.
Jennifer Konsen, a senior recruitment manager at Stem-81 in Dundee, Scotland, saw the impact in her role recruiting IT professionals.
“Brexit has certainly been a topic since the referendum happened,” she said, adding that it has had a big impact on a market that was already suffering from a skills shortage.
“This had a lot to do with the uncertainty of what Brexit would actually look ,” she said.
Uncertainty and rumours destabilised the recruitment market. Many looked to return home, especially more highly-qualified workers. A KPMG study in 2017 revealed that half of respondents with PhDs and 39% with postgraduate degrees were thinking about leaving.
“People weren’t sure what was happening. For many people, especially those on lower incomes, there was uncertainty over whether they would be allowed to stay. There were so many stories in the press about how families were being torn apart because one person had a job and another didn’t.
Many people decided to go back home and be on the safe side,” said Konsen.
At least now there is clarity. A new immigration system applies to EU, EEA and Swiss citizens who want to work in the UK, although the Irish can live and work there as they please. The same points-based system applies to non-EU workers, too.
Skilled workers need to obtain a visa in advance, which requires sponsorship from a company, a proven level of English and a salary of £25,600 or the going rate for your job, with a few exceptions to the rule.
It’s an awful lot of jumping through hoops, which means companies need a stronger recruitment marketing strategy to attract EU workers.
Here international recruitment expert Konsen, who works extensively across the European market, shares her tips for bringing EU talent to your company in the wake of Brexit.
1. Create an attractive package
All the extra time, effort and money involved in making a career move to the UK means that companies need to make it worthwhile, explains Konsen.
“Companies need to get in the mindset of ‘Why would people want to work for us’ rather than ‘Why should we hire you.
’ What’s so special about us that would interest people to come to us? They need to sell themselves,” she said.
This is about a competitive salary, of course, plus pension and other traditional benefits, but Konsen believes that it’s about more than that. “The key really is to paint a picture of the company so it becomes real and is not just a job title and a salary on a job advert,” she said.
“Obviously, salary plays a big part, but money is not everything.
Can companies help with relocation? Do they offer a decent work-life balance and flexible working? Do they organise social events? What facilities do the offices have such as a canteen, chill-out areas, games areas, a roof terrace, quality coffee, fruit? These are all things that I see companies in Germany offering new employees along with other benefits such as a pension, allowances to upskill yourself, public transport tickets––the list is endless.”
Focus on the “softer” side of the company. “Of course people want to work for a reputable company but it’s not as important as the bigger picture, which is what your private life will look .”
Make it as easy as possible
Employers need to make it clear that a potential employee’s move to the UK would be as seamless as possible by offering a comprehensive relocation package.
This isn’t just about organising sponsorship but doing all the annoying paperwork that is off-putting at the best of times, and even more so in a new country with different systems and infrastructure.
There are other headaches that the company can solve, too, explains Konsen. “It’s the little things,” she said. “Getting a bank account sorted, finding out which is the best gym, learning where the kids can go to nursery, all of that.”
Start a buddy system
Moving to a new country to start a job can feel very lonely. An employer can offer new employees a contact within the company who can help them with the more personal aspects of their move. “It’s good to get a buddy or a friend organised from the company,” said Konsen.
“Someone they can speak to if they need to, who can advise on what to do in town and who has connections. The lihood is the new employee won’t have any connections at all here, or their family, if they have family coming with them. It makes it more human.
Grab the attention of potential talent by talking about career progression. Push details about opportunities and training further down the line, says Konsen.
“Where can they go from the role on offer? Will they be stuck in the same position or is there potential to develop? There are so many things people take into consideration when applying for a role,” she said.
2. Location, location, location
Vibrant cities, stunning countryside, surf beaches and quaint towns—the UK has a lot to offer. If you’re based in an attractive location, promote this heavily.
A potential employee might not have heard of your company, but they might have heard of Manchester, say, Southampton or Leeds.
What sort of lifestyle are people seeking? “We are based in Scotland, which attracts people who say they love the outdoors and hiking,” said Konsen, who came to Dundee from Germany. “I love it here too, I have no intention of leaving due to Brexit.”
3. Woo EU graduates
To promote the company more actively to international graduates, think about heading to on-campus fairs on the continent or taking part in virtual career fairs, as well as targeting national recruitment events and universities.
International student visas are still available for those looking to study in the EU. Plus, from summer 2021, there will also be a new graduate immigration route for international students who stayed for their degree in the UK.
These international graduates will be able to work in the UK at any skill level for up to two years—three years if they hold a PhD.“I hope to see international internships still happening,” said Konsen.
“Build a collaboration between universities and your company to get that attraction.”
4. Look local
If all else fails, it’s time to look local. That doesn’t just mean Brits—there are an estimated 2.3 million EU workers in the UK already who won’t have to go through the vigorous visa process. They do, however, need to apply to the EU Settlement Scheme by June 2021 to stay in the country.
Consider upskilling employees, offering more training packages and professional development. Look at creating a diverse company culture with more women and minorities. “It’s not going to be easy to attract and employ EU talent—and it’s going to be expensive. We have interest from abroad, but if I can get someone local, it makes life a lot easier,” said Konsen.
Don’t be too disheartened, Brexit is still a work in progress. It is still experiencing teething issues and it will continue to do so for quite some time. This means rules might have to change as Brexit becomes reality.
What’s more, it hasn’t put off all potential employees. According to the KPMG study, which polled 1,000 EU citizens who live in their home countries, two-thirds still consider the UK an attractive place to work. More than half said they would move there if the opportunity arose.
“Better work opportunities, diverse culture and an open society were cited as the big draws,”” the report said. Those things haven’t really changed, despite the months of political blustering.
So develop a Brexit-friendly package and keep up the recruitment drive, all is not lost!
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Brexit: Keep Calm and Carry On
Good morning! Chances are you woke up today to news of Britain voting to leave the European Union, and more than one ALL CAPS headline screaming that financial markets are plunging. Here’s some perspective:
- As of this morning, The S&P 500 index is still up 1% year-to-date
- US Small-cap stocks (IWM) are up 0.7% YTD
- Emerging Markets stocks (VWO) are up 3.4% YTD
- Bonds (AGG) are also up 3.6% YTD
- The stock market in the UK is down, sure. But, only down to the levels of late February of this year
- Same thing for European markets
- After one of the largest one-day moves in the British Pound ever, it’s also it back to the level seen way back in February of this year
- World stocks markets (ACWI) in total are down only 1.3% YTD
While the financial markets don’t uncertainty (and this vote definitely creates some uncertainty), and traders are ly going to sell first and ask questions later, it’s important to remember that we are investors, not traders.
Our time frame as investors (and your goals, objectives, and financial plan) is years and decades, not hours, days or even weeks.
This vote, or any market move over a week isn’t going to deter a well-designed financial plan or investment strategy.
Weeks this are an important reason why stocks have returned more than bonds over time. As we wrote last August when the markets were in a bit of a selloff:
The feeling you have right now—that uncomfortable feeling in your gut making you wonder “is my portfolio alright?”—that’s also a big reason that stocks have returned more than bonds over time. In a very visceral way, owning stocks compared to bonds is simply more painful at times. These pullbacks happen, and it’s not a whole lot of fun when you’re in the middle of one.
I think what’s important, then, is to step back and see the forest for the trees. These pullbacks (the trees) can seem pretty big and important when we are in the midst of them. But zooming out to the forest-level view, we get a sense of just how minor each individual pullback is to long-term market performance.
The chart below from my friend Michael Batnick at Ritholtz Wealth Management paints this picture nicely. Notice how much of the time the stock market has spent in either a 5%, 10%, or 20% drawdown.
And yet from 1957-2014, for those disciplined investors willing to ride out these drawdowns, the market has returned 10.
2% annually—turning $1,000 investment into more than $250,000! What matters for the disciplined investor is again, “time in the markets, not timing the markets.”
Source: S&P 500 Index via Michael Batnick
With the US Markets outperforming the International markets over the last few years we’ve received a number of questions regarding why to invest internationally in the first place. Why can’t we just own US stocks? And events this might prompt the question again.
But, events this are precisely why it does make sense to diversify internationally. You don’t want your portfolio, your financial plan, and your financial future tied to the economic prospects and the voting decisions of any one population.
Consider the following from financial writer Jonathan Clements:
If [your] 100% stock allocation consists entirely of U.S. stocks, you are betting on just one of the global financial markets’ four major sectors. What if the U.S. turns out to be the next Japan? It strikes me as improbable. But in the late 1980s, when Japan’s economy was the envy of the world, the subsequent bear market would also have been considered wildly improbable.
My contention: If you’re going to invest heavily in stocks, you should consider allocating as much as 40% to foreign shares, so you aren’t betting too heavily on a single country’s stock market. I don’t know whether that will help or hurt returns. But it will reduce risk—and potentially save you from financial disaster.
So, What Should You Do? What Are We Doing?
1. Frame current market movements in light of your long-term goals. Chances are nothing that happens this week is going to deter your long-term financial goals or plan. View your investments as a means to achieve your long-term financial goals, and don’t worry about the tick-by-tick movement of your portfolio.
2. Don’t Pay the ‘Panic Tax.’ To realize the equity risk premium, we have to avoid buying and selling, fear or greed, at the wrong time. We call it the “Panic Tax” and paying this tax can have a huge impact on your returns.
According to Morningstar, for the ten years ending in 2014, investors in U.S.
equity funds lost 1% annually from their returns because of these poorly timed buy and sell decisions (International fund investors fared worse, costing themselves 1.2%). For example, in 2012, the U.S.
equity fund category saw the largest net outflows (-$94 billion) and taxable bonds had the highest inflow ($270 billion). Their returns in the next year: 35% for U.S. equity versus 0.15% for bonds.
3. Look for opportunities. As Warren Buffett said, “Be greedy when others are fearful.” Should the market selloff continue, we will look for buying opportunities—whether that’s increasing exposure to a given region, utilizing options to capitalize on increased volatility, or simply rebalancing to sell appreciated bonds and buying stocks at a discount.
4. Tax-Loss Harvest. If there are losses in your portfolio that can be used to offset future gains, market moves this are a good time to take advantage.
What happens next?
While we (nor anyone else) knows what the markets will do in the short term, the Brexit will play out over the next several months and possibly years. Here’s a brief outline on where Britain goes from here:
- “A Brexit vote is not legally binding, and there are a few ways it could theoretically be blocked or overturned. However, as the BBC notes, “it would be seen as political suicide to go against the will of the people as expressed in a referendum.” (vox.com)
- “Once Britain invokes Article 50, it will have a two-year window in which to negotiate a new treaty to replace the terms of EU membership.”vox.com
- “In the best-case scenario, Britain may be able to negotiate access to the European market that isn’t that different from what it has now. Norway is not a member of the EU, but it has agreed to abide by a number of EU rules in exchange for favorable access to the European Common Market.”vox.com
- Some think that “Britain’s long-term economic future would be largely unaffected by a decision to leave the European Union.” (woodfordfunds.com)
- Others, see some economic costs, “There will be costs; a review of 13 separate studies found eight saying Britain would be worse off and three saying it would be better off. (The remainder saw mixed effects). Still, even the British government’s estimates of 0.2 to 0.6 percentage points lower growth over 15 years may not be enough for the average Britain to notice.” (wsj.com)
Brexit and data protection: keep calm and carry on?
It is not yet clear how the UK's vote to leave the European Union will impact data processing and sharing across Europe. Businesses will need to anticipate possible new barriers to data sharing whilst at the same time working to encourage pragmatic solutions. In practice, however, it is unly that Brexit will be significantly disruptive from a data protection perspective.
EU and UK data protection law
Data protection across the European Union (EU) and European Economic Area (EEA) is regulated by national laws implementing EU Directive 95/46/EC (DP Directive) – in the UK, it is regulated by the Data Protection Act 1998 (DP Act).
The DP Directive sets standards applicable to the processing of personal data across the EU and EEA as well as restrictions on transfers of personal data to so-called “third countries” outside the EU and EEA.
The DP Directive and DP Act are due to be replaced, as of 25 May 2018, by the new EU General Data Protection Regulation (GDPR), which (for the most part) sets higher data protection standards than the DP Directive and DP Act.
As an EU Regulation, the GDPR will take effect across the EU without the need for national implementing legislation.
In practice, however, the UK and the other EU member states are working to draft laws to supplement and make exceptions to the GDPR in a number of areas.
The timetable for Brexit is uncertain. The UK could conceivably leave the EU before the Regulation takes effect, but it is more ly to be afterwards. In that case, the GDPR will take effect in the UK and then fall away, requiring replacement by a new UK law. In all lihood, UK rules will closely follow the GDPR model.
The UK's future data protection regime will to some extent depend on the nature of the UK's wider future relationship with the EU.
If the UK joined the EEA it would be obliged by agreement with the EU to pass a new law effectively implementing the GDPR in the UK. In that case, therefore, the impact of Brexit on UK data protection regulation would be minimal.
Any other post-Brexit arrangement would be ly to involve some agreement between the UK and the EU. This may or may not involve commitments from the UK regarding its data protection regime – clearly, however, those commitments would not require a higher standard of data protection than the GDPR.
Subject to any data protection commitments that the UK might make to the EU, the UK would, in theory, be free to regulate data protection post-Brexit as it saw fit.
This freedom would, however, be more theoretical than real.
The GDPR, the DP Directive, will impose tight restrictions on transfers of personal data from the EU and EEA to other countries which do not ensure an “adequate” level of protection for personal data.
The European Commission, with the EU Court of Justice looking over its shoulder, will need to decide whether the UK's new regime ensures an adequate level of protection.
A decision that the UK did not provide an adequate level of protection would be disruptive, putting the UK in the same category as non-EEA countries, such as the US, China and India, and requiring burdensome administrative steps to be taken to allow data sharing between the EU and the UK to continue.
In practice, therefore, the UK is ly to adopt a GDPR- level of data protection, so as to ensure that EU and UK businesses can continue to share personal data. The UK Information Commissioner has indicated that this is his expectation (see the ICO's Referendum result response).
Possible UK liberalisation?
In theory, there may be some scope for the UK to liberalise its future data protection regime.
First, there is the possibility of the UK opting the new GDPR standards and asserting that the current regime, embodied in a lightly amended version of the DP Act, provides an “adequate” level of protection.
This would somewhat reduce the regulatory burden for UK business – or rather it would avoid the increase in that burden that UK businesses are currently expecting.
In theory, the UK could also make changes to liberalise the current regime.
The EU Court of Justice, however, takes the view that, for a third country's data protection regime to be “adequate”, it must be at least broadly equivalent to the EU regime (see Schrems v Data Protection Commissioner (C-362/14)).
Where the EU has concluded that its current regime is not fit for purpose, and legislated to improve it, it is hard in this context to see how the Commission could conclude that a law the old regime delivers adequate protection.
This will be an issue for other third countries (such as Argentina, Canada, Israel and Switzerland) already determined by the Commission to ensure an adequate level of protection, and the Swiss authorities, at least, are already considering changes to their data protection laws to anticipate this issue.
A more elaborate possibility would be for the UK to apply two different data protection standards, one the GDPR and applying to personal data transferred from the EU or EEA (or available to be adopted on a voluntary basis, the proposed US “Privacy Shield”); and another, more liberal, standard applying to “domestic” personal data. This approach could, for example, allow the relatively free transfer of UK personal data to the US and elsewhere and give UK businesses a small competitive advantage over their EU colleagues.
The attractions of this approach are ly to turn out to be more theoretical than practical, however, even if it were permitted by the agreement ultimately reached between the EU and the UK.
A dual regime would be complex and difficult to understand and apply, and of course UK citizens would have to be persuaded to accept a lower level of protection of their personal data than would have been maintained by a vote to remain.
The Commission would also need to be convinced that the higher standard would be applied in practice to personal data transferred from the EU and EEA, despite the practical difficulties of distinguishing between categories of data in consolidated processing systems.
Impact on “one-stop shop” proposals
As we have seen, there is the theoretical possibility of new restrictions on transferring of personal data from the EU to the UK, and of a more liberal regime governing the processing of personal data within the UK, but at this stage both seem unly.
However, it is ly that in practice Brexit will disrupt the so-called “one-stop shop” arrangements in the GDPR.
Businesses operating in both the UK and the EU will inevitably be regulated by different data protection authorities when they process personal data for the purposes of their EU and their UK operations.
There will also be circumstances where both the EU and the UK regimes apply – for example, if a UK business outsources processing to a service provider in Poland – which may create difficulties even if the two regimes are substantively the same.
Following Brexit, the UK Information Commissioner will no longer have any formal role in shaping the interpretation and enforcement of the GDPR. The Commissioner's office has a well-won reputation as a moderate and pragmatic force within the European data protection community, so this may lead to less business-friendly approaches by the EU in the future.
What to do now
For the time being, UK and other European businesses need to continue preparing for the implementation of the GDPR. Brexit should not be allowed to impede GDPR preparations.
One ly effect of Brexit, in fact, will be a delay in visibility of the detail of the UK's post-GDPR regime.
Business has been pressing the UK Government to work quickly to draft the legislation needed to supplement and make exceptions to the GDPR.
The need to take account of the consequences of Brexit and the sheer level of distraction created by the vote are ly to seriously delay that process.
Businesses should be prepared to modify their data protection compliance strategies to take account of the particularities of a future UK regime, but on the assumption that these peculiarities are ly to be at the margin rather than within the fundamental principles established by the GDPR.
So in other words, yes, businesses should keep calm and carry on.