Potential for “brain drain from UK economy” if concerted effort not made to attract skilled talent post-Brexit

No less than 41,510 Board-level directors of UK businesses are citizens of EU27 countries – over 6% of the total of more than 628,000 directors identifiable by nationality. BDO LLP suggests that the figures unearthed by its study “raise questions” over the potential threat of a ‘brain drain’ in the UK economy if the Government doesn’t make a concerted effort to retain and attract European business leaders post-Brexit.

While there’s a misconception that this issue primarily affects FTSE 100 companies, the new BDO data suggests that businesses of all sizes may be affected should EU citizens relocate following Brexit. In Britain’s mid-sized businesses (ie those with an annual turnover between £10 million and £300 million), for example, citizens of EU27 countries make up 7% of all directors. A total of 10,400 Europeans run these mid-sized companies.

The UK has been a big winner in the global war for talent over recent years, attracting numerous outstanding business leaders who’ve contributed to economic growth, tax receipts and job creation. If a significant number of these overseas directors made the decision to leave the UK, the loss of human capital to UK businesses could impact growth at a time when the economy’s already struggling.

EU directors are likely to be internationally mobile, and more of them may in future choose to start or grow their businesses in competing EU countries.

Stuart Lisle, senior tax partner at BDO, feels that the Government must make clear the fact that EU directors are still welcome in the UK, regardless of the outcome of Brexit.

“EU directors make an enormous contribution to the UK’s economy every year. We need to make sure that those individuals are still encouraged to set up and lead businesses in the UK in the future. That may mean actively courting them, just as many other EU states are doing. The very fact that so many businesses rely on EU leaders shows the risks to UK economic growth, tax receipts and employment if they’re disincentivised from making investments here.”

Every country in the EU27 is represented in the list of EU directors of UK businesses, ranging from first-placed Ireland with 9,490 directors through to last-placed Slovenia with 40 directors.

BDO LLP’s commentary on this matter goes on to add that:

*the proportion of EU-national directors is higher among larger businesses (turnover between £300 million and £1 billion), where 1,250 of 15,000 company directors are from EU countries (8%). France is at Number One in the nominal ‘league table’ with 270 directors

*Ireland punches significantly above its weight in providing company directors to EU businesses. While it’s only the 19th-largest EU27 country by population, it provides more directors than any other EU country

*Germany under-performs its population size in producing UK business leaders (while it’s the largest EU27 country by population, it’s only ranking third in terms of the number of UK company directors)

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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