Britain's decision to exit the EU, with its likely restrictions on immigration and the free movement of labour, has left us all guessing what the short, medium and long term affects are going to be in Ireland. What we do know for certain, however, is that it poses serious challenges from a macro-economic point of view. At Broadgate Search, however, we also believe that the situation offers some significant opportunities from the point of view of job creation and talent attraction.
The Irish Financial Services sector, in particular looks well placed to benefit from Brexit. There are some questions being asked, I am sure, across both sides of the Irish Sea in regards to London remaining as Europe's financial services hub and the possibility of Ireland replacing the UK as the number one choice for job seekers across Europe. The reality is that we won't know the answers to these questions for some time, until 2018 perhaps.
What is clear, however, is that serious discussions are likely to be had over the coming days and weeks, at the higher echelons of British based Financial Services firms, who have relied on international sources of talent to fill certain roles in their organisations. In this regard, Ireland could well prove to be a more attractive location for such firms to locate their operations. We already have a well established Financial Services sector with a talented and well educated work force and Brexit may well heighten the pull factor for job seekers and employers looking at their options in Europe.
In recent times, the Financial Services sector in Ireland has seen candidate shortages in certain disciplines. Coupled with the ever increasing remit of the European Central Bank from a regulatory perspective, we have seen firms struggle in some cases to fill roles from the local talent pool and, therefore, be forced to look internationally for specific skill sets. Britain leaving the EU could now heighten Ireland's appeal to talented workers looking for high quality roles in Europe with sectors such as Financial Services and Technology likely to gain from a larger pool of candidates. This would be a welcome boost to the Financial Services sector as a whole and to Ireland's fast growing Fintech industry.
Amidst all the uncertainty, certain factors remain true. One such point is the presence of British firms in Ireland, particularly in the Financial Services sector. A clear opportunity for Ireland Inc. is to attract more roles roles from London to be based in Ireland due to the constraints that may be placed on Britain in regards to international talent attraction and passporting rights. The European regulatory regime may restrict such firms access to European markets from the UK making Ireland a logical destination. From the point of view of foreign direct investment, the fact that Ireland will be the only English speaking country remaining in the EU could be a defining factor for International Financial Services firms when making their decision of where to locate their operations; all our eyes will surely be on the IDA over the coming months with this in mind.
It is important, however, to temper any positivity with a good dose of caution. Ireland has a long and well established trading and economic link to the UK; 18.5% of Irish GDP is accounted for by the UK export market. Indigenous firms, therefore, whose main market is the UK, could suffer from Brexit and may well decide to relocate their operations the other way. Brexit may also be viewed in a different light by the asset management sector in the UK and Ireland for whom tighter European regulations such as MiFID II and AIFMD pose serious challenges.
Much depends, therefore, on how trade negotiations between the UK and Europe work out over the coming months. Dependant on the result of these negotiations, a situation may well arise where Britain has little or no influence on the development and enforcement of European regulations and directives. Firms, therefore, who operate across multiple jurisdictions may not view it as viable to have certain functions and roles located in the UK. Passporting restrictions will be a key factor for such firms when considering where they base their operations with Ireland a possible destination.
In summary there are too many uncertainties in regards to the impact that Brexit will have on the jobs market and movement of talent in Ireland to make an accurate prediction. This won't become clear until Britain decides what type of Brexit they intend to effect. Most experts seem to believe that the negatives outweigh the positives, however, there does seem to be room for optimism in regards to how Ireland could benefit from the situation in regards to job creation and attracting talented individuals to our shores.
Please contact one of our specialist consultants to discuss what these recent developments mean to you.