Pandemic offers solution to tech industry’s big Brexit problem
A range of senior members of the industry say that having to fabricate remote workforces almost overnight in response to the coronavirus has transformed how they’ll approach recruitment after Brexit.
The pandemic taught Britain's technology executives that business can still happen even if everyone's working from home. That lesson is providing a source of relief as the nation's year-end departure from the European Union looms.
A range of senior members of the industry say that having to fabricate remote workforces almost overnight in response to the coronavirus has transformed how they'll approach recruitment after Brexit. A rough consensus on this is emerging: executives will be kept local to headquarters, but most other roles will not.
This approach may lessen the need for work visas, something that could be a huge benefit to an industry where almost a fifth of its workers are born outside of Britain. Though remote working has limits, the prospect of being able to attract and keep a scattered workforce suggests the tech industry, and perhaps other service businesses such as recruiting, are in a stronger position to survive Brexit than they may have expected before the spread of Covid-19.
Previously, video-game developer Codemasters Group Holdings Plc “didn't like to have people working from far away,” said Frank Sagnier, chief executive officer. Now, remote working isn't an issue in staffing considerations, and the company has a lot more flexibility to recruit the talent it needs.
“If it's difficult through visas and Brexit laws that are going to come out, we certainly now know we can do it without having to transfer anyone,” he said. “That makes a big difference for us. It's a big relief.”
The Leave campaign's promise to end free movement from the EU alarmed business executives who have relied on unfettered access to staff on the continent for decades. Negotiators have yet to agree on the terms of a new trading relationship with the EU.
Already from January, a points-based immigration system will take effect in Britain. Workers wanting a visa must prove they can speak English, have a verified job offer and meet a points threshold based on their specific skills, qualifications and prospective salaries.
For Paul Sulyok, CEO of digital software retailer Green Man Gaming, his company's pandemic experience was a revelation. It had about 100 staff based in London when the pandemic hit, and some asked to go back to their home countries in Europe. They worked “very successfully” from those locations, and the company has remotely hired a number of people from outside the capital, including someone in Belgium.
“It's opened my eyes and those of senior management,” Sulyok said. Asked if this will affect his plans for the business once the post-Brexit visa rules are applied, he said, “it's fundamentally changed how we look at how we can, and how we want, to grow the company.”
It's not just digital businesses that found a Brexit benefit from the lockdown. Venture capital firm Northzone, which made lucrative early bets on companies such as Spotify Technology SA, iZettle AB and Trustpilot AS, recently began recruiting for a new intern.
“For the first time in our history we listed it as a remote job,” said Paul Murphy, a partner at the London-based firm. “This means we don't have to worry about visas,” he said.
And Romanie Thomas, CEO of recruitment platform Juggle Jobs, said her startup had a physical office prior to the pandemic but has since moved to a fully remote environment: “For our software engineers in particular, we're now sourcing all over the globe.”
Nearly one in five -- 18% -- of the 3 million jobs the U.K. tech sector supported as recently as 2017 were held by foreigners, according to data compiled by Frontier Economics for TechUK, an industry body. Many of those work for the British arms of U.S. internet giants, and could benefit if their leaders relax their stance on home working.
Facebook Inc., which employs about 4,000 people in the U.K., could have half of its employees working remotely over the next five to 10 years, CEO Mark Zuckerberg said in May. There were “very clear benefits” to this, including being able to “access talent pools outside of traditional tech hubs in big cities.”
But this comes with its own complications.
“For key roles, you probably still need to find ways to make that personal connection,” Johann Button, VP of Slack Inc.'s business in Europe, the Middle East and Africa, said last month at Bloomberg's Sooner Than You Think conference.
Since the pandemic started, Slack adapted by interviewing more people for key roles than it would have done before, which resulted in the company appointing at least one person “who we'd never met in person.”
Afterward, the new employee and their manager “went for a walk for an hour in a local park while maintaining social distancing,” Button said. “Having that in-person conversation, that's what it took for both sides to really get comfortable.”
Russ Shaw, founder of industry body Tech London Advocates, cautions that other sources of friction posed by a combination of Covid-19 and Brexit will remain a threat to the U.K.'s attractiveness as a whole.
“As countries such as Estonia increasingly set up Digital Nomad Visas, it will be even more difficult to attract foreign tech workers to move to the U.K.,” he said. “They can access the same employment benefits alongside a lower cost of living elsewhere.”
Still, at the most senior levels, a move to Britain may be the best option.
This is evident when examining the types of people applying for a Global Talent Visa in digital technology through Tech Nation, an industry body used by the Home Office to endorse applications. These allow entrepreneurs to live in the U.K. and work in its technology industry initially five years, with extensions and later permanent residencies possible.
Tech Nation's CEO, Gerard Grech, said about a third of applications are made by startup founders attracted to the U.K. in part for the speed at which a business can be set up in the country. Application numbers fell during the start of the pandemic, but are already returning to pre-crisis levels, indicating that Covid hasn't deterred people from wanting to come to Britain to start companies.
“In some of the countries that they come from, they can't even open a bank account,” he said.
Written by Nate Lanxon.
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