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Tech community fears Brexit brain drain

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According to Market Intelligence, December 2022

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Tech community fears Brexit brain drain

The United Kingdom in recent years has become a top European tech hub, producing more technology unicorns, or businesses valued at $1 billion or more, than any other country in Europe.

However, concerns are growing over startups' ability to hire the talent required to maintain Britain's leading position in the wake of the country's planned exit from the European Union, panelists said at the London launch of Deloitte's Mobile Consumer Survey on Oct. 11.

"[Acquiring] talent is definitely a challenge ... and that may or may not get easier," said Michael Langguth, co-founder and COO of Poq, a software-as-a-service platform for mobile app commerce founded in London.

Uncertainty over immigration and its potential impact on skilled labor in the U.K. continues to hang over the country more than a year after the Brexit vote. A growing number of U.K. tech companies are questioning whether an end to the free movement of European workers will play directly into the hands of other tech hotspots in Europe, such as Paris, Barcelona and Berlin.

"Tech centers are [opening] up everywhere and talent is moving across," said Dan Ziv, chief product officer and managing director U.K. at TouchNote, a mobile-based postcard service. Competition between tech companies to hire "quality talent" has intensified as a result of the added pressure, he said.

Some recent statistics indicate that the Brexit vote is already contributing to a shrinking pool of foreign tech workers joining U.K. companies. Research compiled in May by Hired.com, a technology recruitment platform used for hiring talent by tech companies, showed that foreign candidates who accepted initial offers from U.K.-based companies fell by 20% versus no change for local candidates. Additionally, the percentage of U.K. companies recruiting outside the country fell from 25% at the start of 2016 to 18% a year later. Meanwhile, 70% of U.K.-based tech employees surveyed had considered leaving Britain as a result of Brexit.

Harsh Sinha, vice president of engineering at money transfer business TransferWise said that the ability to hire talent remained the biggest concern among tech companies in Britain. His company already faces challenges locking in prospective engineers, for instance.

Britain formally began the process of leaving the EU in March, launching a two-year period to negotiate the terms of its withdrawal.