More businesses to relocate their employees as Brexit deadline looms

With the end of the Brexit transition period fast approaching, recent research[1] has highlighted that more Financial Services firms are set to relocate their employees outside of the UK.

The latest figures reveal that over 7,500 UK finance jobs and an estimated £1.2trillion in assets will move to Europe. However, this number is considerably lower than initial concerns that over 200,000 financial sector jobs could be lost[2].

Dublin, Luxembourg, Frankfurt, and Paris are the main locations where employees will be relocated.

• Dublin is the most popular destination, with 34 Financial Services Firms saying they are considering or have confirmed they will be relocating their employees and/or operations to the city
• Luxembourg is the second most popular destination, with 26 companies looking to relocate there
• 23 companies have confirmed that they will be heading to Frankfurt; and  
• 20 Financial firms are considering or have confirmed that Paris will be their relocation destination

As we approach the final Brexit deadline, the lack of clarity around future trading agreements remains a cause for concerns for the Financial Services sector. As a result, many leading financial companies including banks, insurers and asset managers have been opening new hubs or expanding their existing operations within Europe. Many firms want to put in place new standards to ensure that the UK remains a leading global financial centre post-Brexit.

Brexit: where are we now?

Since 31 January 2020, the United Kingdom has formally ceased its membership of the European Union. A transitional period keeping most pre-departure arrangements in place, including existing provisions around the free movement of people and goods as they were before Brexit, ends on 31st December 2020 while longer-term trade and immigration arrangements are worked out.

From 1st January 2021, the UK will leave the EU's Single Market and Customs Union to implement an independent trade policy. This will result in significant changes to trading arrangements between Britain and Europe.

From this date, EU citizens will no longer have the right to move to the UK to work and settle, and vice versa, and there will be new restrictions around travel. The UK government intends to introduce a new immigration policy from January 2021. EU nationals will no longer have preferential treatment, under a planned points-based system to attract skilled workers.

How will this impact employees relocating and their benefits packages?

Organisations who are relocating employees need to carefully consider the impact of any move on the benefits they offer their people. It is important to understand:

• the legal implications of relocating employees and the  particular employment law environment in the area of relocation
• local employment market conditions,
• the specific structure of each country’ s social benefits programs; and
• any local compliance regulations.

All of these factors can greatly impact the liability of any decisions companies make as they enter new markets or expand in existing markets.

How we can help

If you are considering relocating employees, our dedicated team of Global employee benefits experts can provide you with essential insights, local knowledge and legislative updates to help you make educated decisions regarding your employee benefits. Helping you to avoid any pitfalls, potential legal issues or government fines that may come from not being fully informed or prepared in new markets.

Find out more on our Global Development web page. 

Contact us:     

Anne Terry, Head of Global Benefits Management

[email protected]