Exodus threatens talent crunch as UK executives seek greener pastures

Jul 01 2008 by Nic Paton Print This Article

Soaring bills, collapsing house prices, the credit crunch, an unpopular government, swingeing tax rises and another grey, drizzly summer. It's no wonder executives and employers are leaving the UK in droves.

And bosses faced with what is turning out to be a talent "perfect storm" are struggling when it comes to working out how best to hang on to their key personnel.

With up to two million people emigrating from Britain in the past decade and now big corporate names such as Boots, Yahoo! and Procter & Gamble quitting its shores, the UK's reputation as an international centre for business is suddenly looking distinctly tarnished.

According to UK government figures published in May, up to a million people are expected to leave in the next five years, joining almost two million who have left since Labour came to power in 1997.

While some of these will be people who will be retiring abroad, many will also be talented executives of prime working age looking to carve out new careers in foreign climes.

In June Alliance Boots, owner of the iconic health and beauty company, announced it was switching its headquarters from Britain to Switzerland, making the end of almost a century-and-a-half of Boots having its HQ in the UK.

Its decision follows the likes of consumer goods giant Procter & Gamble, which now has its European headquarters in Switzerland and the announcement in May by California-based web search engine Yahoo! that it would be moving its European headquarters from London to a site on Lake Geneva within the next 18 months.

Alliance Boots executive deputy chairman Stefano Pessina said its relocation was largely down to Switzerland's status as a hub for European healthcare companies, but then pointedly rubbed salt into the wound by saying the UK had become a less business-friendly location.

Changes to corporation tax by the UK government as well as a tougher tax regime for rich "non-domiciles" are being cited as key catalysts in encouraging this exodus, explains Grace Borrelli, Managing Partner, European TMT, at executive search firm CTPartners.

"There is the lure of being part of an emerging market such as the Far East rather than part of a mature market, such as the US or UK. So the challenge for businesses in the West is how to revitalise themselves," she points out.

In an increasingly global business world, workers are much happier to relocate across borders than they once were, whether as part of a larger corporate move or individually to chase global opportunities.

This trend was confirmed in a recent survey of 28,000 employers where it was reported that almost a third were concerned about losing talent to overseas competitors.

"A lot of the people I am talking to, all of whom are senior people, are expressing increasing interest in moving overseas," says Borrelli.

"Bills have been going up at an unprecedented rate and then there are all the tax changes. The only thing really keeping a lot of people here is their desire to educate their children in this country," she adds.

Then there is the issue of quality of life. Britain's climate, increasingly gloomy economic picture and growing congestion woes are all fuelling this trend to escape abroad.

A survey by consultancy Mercer in June ranked Zurich, Vienna and Geneva as the best cities to live in for quality of life. London only came in at 38.

Highlighting London's sliding popularity, Australia has reported a 50 per cent increase in the number of their citizens returning home from the UK since last summer, many of whom are highly skilled professionals.

Meanwhile, the Canadian province of Alberta has this week launched a campaign to lure British doctors, teachers, engineers, construction workers, management consultants and other skilled workers with fast-track visas and the promise of a better quality of life.

"Employers should have an articulated reason for keeping senior people in the UK whether it is access to market or simply more cost effective to do so," Grace Borelli added.

"In the current climate, they need to be asking some fundamental questions about the best location for their top talent."

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Older Comments

Leaving the UK to live in Canada was the best decision I ever made. If any other doctors (I'm a GP) are thinking of doing so, I'd wholeheartedlt recommend it.

Jonathan B Vancover

It's only when you live somewhere civilised that you realise just how disfunctional the UK has become and how poor its quality of life is. I'm delighted to have left and I'm not planning to go back.

Joanne Geneva

Basing headquarters outside the UK is not necessarily the same as relocating the business outside the UK. There may be a tax motivation or a lifestyle motivation or some other reason. It is hard to imagine large companies seeking to relocate hundreds of staff.

George Smith