Britain's got to have talent to avoid post-Brexit skills crisis

Profile picture for user catheverett By Cath Everett April 11, 2017
UK employers have mixed views on what impact uncertainty brought about by the Brexit referendum is having on the tech skills market.

Let's hope so...

Employers’ views on the impact that Brexit-based uncertainty is having on the UK’s tech skills market are, it seems, just as mixed as those who voted in the referendum last June.

Some organisations indicate that they are feeling the effects of the move already. As such, they agree with James Parsons, founder and chief executive of resourcing specialist the Arrows Group, who states that since June, he has seen a 10% drop in the number of skilled tech workers from within the European Union (EU) wanting to relocate to the UK over concerns about whether they will be allowed to stay. He continues:

This trend is also being felt at a business level as some of our clients are apprehensive about increasing their investment in the country, given current uncertainties. As many of them want to expand their tech teams quickly, they need to invest in a location that can give them a healthy supply of talent to meet their objectives, which they may not be able to guarantee here in the UK. If this trend continues, it could lead to a brain drain of top UK talent.

Parsons is already seeing a rise in the number of highly skilled developers taking up positions in Switzerland, which is becoming a fast-growing hub for tech innovation – something that is not good news for a UK industry in which 18% of its three million workers are born overseas, a third of whom hail from EU countries.

But not only does Brexit have the potential to damage “access to skills by disrupting a vital talent pipeline from the EU”, according to tech trade association techUK’s report on the issue, which was released the day after Prime Minister Theresa May triggered Article 50, kicking off two years of formal negotiations with Brussels on the UK leaving the EU. Changes to visa rules for skilled immigrants from outside the European Economic Area and growing domestic digital skills shortages also “present tech companies with an ever-tightening squeeze on accessing the talent they need to grow”, it says.

Tom Adeyoola, founder of retail tech start-up Metail, agrees that the current situation is far from easy and indicates that his company has had “difficulties in attracting and maintaining access to international talent” since the referendum decision last June. For him:

The 10% figure is unsurprising, with many skilled tech and digital workers choosing to move elsewhere based on a combination of uncertainty and anxiety…The tech ecosystem relies on an uninterrupted flow of capital and access to world-class talent to plug the skills gap and support the growth of new businesses. The Brexit negotiation process is shaking confidence in the UK tech sector, with the lack of clarity on the rights of EU citizens preventing tech businesses from accessing world-class tech talent.

Expanding skills gap

Nick Thompson, managing director at bespoke development house DCSL Software, takes a similar view. Since taking over the reins three years ago, rapid growth has seen the firm take on new staff on a monthly basis. But being based in Farnborough in Hampshire has traditionally made it more difficult to attract UK developers who tend to prefer London.

As a result, up until last year, recruitment agencies were sending him between 40 and 50 possible applicants from the EU each month, but this figure has now halved to about 20. Thompson says:

We’re having to work harder to recruit people and we’re finding that most skills have been affected. But it’s not just the numbers – the quality of applicants has dropped as well so the concern is that the situation will inhibit growth.

But others take a more positive view. While Jack Grimes, European contracts manager at specialist change and business transformation recruitment consultancy Venquis, reports a “slight slowdown” in the number of European tech staff looking to work in the UK, he describes it as “nothing overly significant that could be attributed to anything other than cyclical market trends”. He explains:

It’s true that the tech and digital skills gap has expanded since the Brexit vote, but we’d argue that this would have been the case regardless of whether we left the EU or not and isn’t dependent on the referendum decision. Skills shortages have been a major issue for years now and it’s driven the reliance on overseas tech specialists seen at many firms.

Meanwhile, Barnaby Martin, chairman of DiffBlue, which sells artificial intelligence (AI) software to automate coding tasks, is positively upbeat. AI skills are in short supply in Europe, he says, which means the company already focuses its recruitment activities on the US, Australia, India and Canada anyway. He continues:

The government isn’t stupid and it realises it has to keep the door open for skills that are hard to come by. So it means we’ll be able to recruit people from India, Brazil and the like more easily who up till now have been discriminated against as they’re not members of the EU. It’s a long, cumbersome visa process at the moment, but the government has already said that’s going to change. Once we’re shot of the European Union’s laws, it should be much easier. A lot of people are moaning, but London is a big magnet for skills, just like New York and Shanghai, so I don’t see it as a problem.

What to do

Nonetheless, in order to tackle what is a global shortage in AI skills, Martin has decided to take advantage of the government’s Apprenticeship Levy-based funding to set up a small college that will offer a two-year long, Masters-level software engineering-based apprenticeship scheme.

Due to open its doors in September, the college will be based in London and be staffed by four full-time and multiple part-time lecturers. The aim is to train about 30 people a year in machine learning in order to supply DiffBlue and the other companies with which Martin is involved with the skills they need.

Metail’s Adeyoola, on the other hand, calls on the government to expand and simplify its tech-specific visa programmes as well as abandon policies such as the “counterproductive ‘skills charge’” designed to reduce demand for migrant labour from outside of the EU by levying a £1,000 charge on so-called Tier 2 employers. But he also warns:

The current debate has rather naively focused purely on businesses being starved of talent rather than looking at the likely outcomes of what businesses will do to ensure they survive and get the talent they need – and there are plenty of global centres from Berlin to Hong Kong offering considerable incentives for businesses to set up shop.

As a result, Adeyoola is now exploring the benefits of setting up his own engineering centres abroad. He explains: “

Tech hiring was already difficult, but since Brexit, we’ve been proactively reviewing our options to mitigate any reduction in overseas talent immigration by exploring whether to develop engineering talent centres abroad. Outsourcing has always been something that we have done for non-core tech, but this is the first time we have investigated establishing our own overseas talent centres. Time waits for no one especially start-ups, so we have had to accept that mixed skills offices rather than straight sales offices abroad will be part of our future.

My take

Employers are going to have to be a lot more imaginative than they have been in the past in order to fill the pre- and post-Brexit skills gap. While automation, relocation and providing varying levels of apprenticeship schemes will undoubtedly help, broadening the talent pool to embrace women, ethnic minorities, people with disabilities etc will also become increasingly vital.