Credit crunch prompts UK brain drain

The UK labour market is on the verge of a ‘brain drain’ and struggling to retain home-grown talent, according to our latest research.

Official ONS statistics of emigrants leaving the UK are due out in a few weeks time and are expected to be significantly worse than the record 400,000 who left in 2006.

Almost half (49%) of British employers are concerned that their highly skilled professionals will soon be looking for career opportunities abroad. The survey of over 500 senior decision makers revealed that as many as one in four (26%) employers are already feeling the effects of increased UK skilled emigration, with over a third (33%) of respondents finding it difficult to recruit skilled UK candidates and two in five (40%) concerned about their ability to retain skilled British talent. With rising inflation and the consumer price index ⁽ⁱⁱⁱ⁾ currently above 5%, three quarters (72%) of respondents blame the UK’s squeeze on the cost of living for skilled UK executives seeking opportunities abroad. In addition, many businesses are shrinking their workforce in the UK, whilst continuing to invest in subsidiaries, particularly in emerging economies. One in three (30%) respondents believe that greater job satisfaction and improved career prospects is the most important element to retaining skilled staff, followed closely by salary (29%), and then work/life balance (25%).

The problem is this; those ideally suited to leave Britain in search of greater opportunity tend to be the young and the brightest part of the workforce. When they leave they take not only their families, but their financial capital and also their intellectual property. It’s an "off-shoring" of sorts but with all the worst effects on the national economy.

In the past, immigration into this country was mainly younger, skilled professional people from Europe and Asia attracted to the booming British economy and we first calculated in 2007, they contributed £54bn in direct and indirect value added GDP. Emigrants were mainly those not fully active in the global economy, older workers retiring or wealthy British nationals relocating to sunnier climes. This will not be the case now.

As the economic climate continues to worsen, and redundancies loom in many sectors, we must not be complacent about our active talent pool. It may feel premature to "look through" the current financial crisis to the longer term. However, countries, like companies, can risk losing their competitive advantage through mis-management. We have a world class pool of talent, a wealth of knowledge, experience and skills here in the UK combined with some very unique natural advantages in the global marketplace. That needs to be nurtured and developed for when the recovery sets in as it surely will.

For additional information see The Telegraph article http://www.telegraph.co.uk/news/uknews/1579345/Biggest-brain-drain-from-UK-in-50-years.html

November 18, 2008 11:23 AM | Permalink