The cost of Brexit for banks
January 20, 2017

Comments at the Davos world economic forum by investment bankers about the possibility of relocating employees from the UK to other EU financial centres have triggered comments from (inter alia) a global law firm and executive recruitment firm on the movement they are seeing from banks' in their respective networks in regards to relocation strategies.

Says Alex Howard-Keyes, Investment Banking Partner at executive search firm Alderbrooke, on UK banks' employment strategies and how they are changing in preparation for Article 50. "It seems likely that some personnel will move to European destinations in time. We are hearing from some large US and European banks they are seriously considering relocating small operations to different destinations in Europe. Frankfurt appears to be the preferred location, although Dublin is also in contention. On the other hand, it's not clear whether heavy-handed marketing campaigns to lure banks to Paris have yet yielded results.

"Any future relocation will almost certainly be gradual and the scale of this migration will depend on the agreement reached by the UK & EU. In any case, the likelihood is London will remain the pre-eminent financial centre in Europe for the foreseeable future.

"Firms must communicate any relocation strategy to employees as soon as possible. Employees themselves can also play a part. Marking yourself out as a flexible employee by putting yourself forward for roles required abroad will highlight your value."

Suzanne Horne, Partner and Employment Lawyer at global law firm Paul Hastings, says: "It is clear that banks have stepped up their relocation plans in anticipation of Article 50 being triggered, though this is part of their overall strategy, not their only strategy. They will have to consider carefully the impact on their business and the practicalities of being headquartered outside of the UK, as well as the cost implications and effect on their workforce.

"The banks will certainly be aware of the enormous cost and complexity of relocating thousands of employees and their banking systems from one location to another. One option is assisting non-EU talent to obtain work visas to transfer them to Europe; however, some European regulators require non-EU based businesses to source a certain number of senior managers locally."

Separately, Synechron, Inc, a global consulting and technology innovator in the financial services industry, calculates that it would cost banks and other financial services companies an average of 50,000 per employee to relocate parts of their UK workforce to another European city in the wake or Brexit. The company calculated the figure using estimated relocation, hiring and redundancy costs, new building and rent costs and other infrastructure & some contingency costs.





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Comments at the Davos world economic forum by investment bankers about the possibility of relocating employees from the UK to other EU financial centres have triggered comments from (inter alia) a global law firm and executive recruitment firm on the movement they are seeing from banks' in their respective networks in regards to relocation strategies.

Says Alex Howard-Keyes, Investment Banking Partner at executive search firm Alderbrooke, on UK banks' employment strategies and how they are changing in preparation for Article 50. "It seems likely that some personnel will move to European destinations in time. We are hearing from some large US and European banks they are seriously considering relocating small operations to different destinations in Europe. Frankfurt appears to be the preferred location, although Dublin is also in contention. On the other hand, it's not clear whether heavy-handed marketing campaigns to lure banks to Paris have yet yielded results.

"Any future relocation will almost certainly be gradual and the scale of this migration will depend on the agreement reached by the UK & EU. In any case, the likelihood is London will remain the pre-eminent financial centre in Europe for the foreseeable future.

"Firms must communicate any relocation strategy to employees as soon as possible. Employees themselves can also play a part. Marking yourself out as a flexible employee by putting yourself forward for roles required abroad will highlight your value."

Suzanne Horne, Partner and Employment Lawyer at global law firm Paul Hastings, says: "It is clear that banks have stepped up their relocation plans in anticipation of Article 50 being triggered, though this is part of their overall strategy, not their only strategy. They will have to consider carefully the impact on their business and the practicalities of being headquartered outside of the UK, as well as the cost implications and effect on their workforce.

"The banks will certainly be aware of the enormous cost and complexity of relocating thousands of employees and their banking systems from one location to another. One option is assisting non-EU talent to obtain work visas to transfer them to Europe; however, some European regulators require non-EU based businesses to source a certain number of senior managers locally."

Separately, Synechron, Inc, a global consulting and technology innovator in the financial services industry, calculates that it would cost banks and other financial services companies an average of 50,000 per employee to relocate parts of their UK workforce to another European city in the wake or Brexit. The company calculated the figure using estimated relocation, hiring and redundancy costs, new building and rent costs and other infrastructure & some contingency costs.



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