Cost of living crisis and Brexit make UK less attractive to international talent, research finds

Employers at ‘real risk’ of failing to obtain skilled staff as survey highlights concerns about the country’s quality of life compared to others

Credit: Hollie Adams/Getty Images

The UK is seen as a less favourable destination for international professionals, having fallen to 28th place on a well-known talent rank as a result of the economic downturn, research has found.

The drop of seven positions to 28th place means the UK is less likely to appeal to the foreign talent pool for the local market’s employment needs, according to the Institute for Management Development (IMD)’s World Competitiveness Center.

The survey of more than 5,000 executives from 63 countries for the IMD’s annual World Talent Ranking found that the top spots for talent are now Switzerland, Sweden, Iceland, Norway and Denmark.

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The reasons for this change ranged from negative views of the country’s domestic policies, including the fallout from Brexit and recent political turmoil, to concerns about the quality of life and state of the education system, the research pointed out.

Jonathan Beech, managing director of Migrate UK, warned that, given these recent changes, “there is a very real risk of employers failing as they cannot source the requisite skills required to operate or be competitive and innovative because of skills shortages. With 1.2 million vacancies, employers are already suffering.”

The research also revealed significant concerns about the quality of life in the UK, which was ranked as 35th out of the 63 economies. This, combined with the cost of living, which was higher in only nine countries, contributed to the country’s fading appeal in the international labour market.

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Another reason behind the UK’s decline in the World Talent Ranking was concerns about its decreasing educational standards, with the standard of the country’s primary and secondary education also ranking 28th of the 63 countries surveyed, behind countries including Luxembourg and the Czech Republic.

University education was ranked similarly at 29th position, while business schools were 39th, causing the UK to fall behind Jordan and Thailand.

Professor Arturo Bris, director of the IMD World Competitiveness Center, said that, taken together with an education system “whose prestige is slipping compared to South-East Asia, this is a concerning situation for the UK with no quick fix”.

“We know that the international business community values stability and certainty. Until the UK is able to deal with the turmoil in its politics and markets, which has dominated recent years, and take action to revamp its domestic situation, it will be unable to attract or retain the talent it needs to restart growth and drive innovation,” he said.

Previous People Management reporting found that only 3.5 per cent of UK businesses have a sponsor licence, and Mark Templeton, director and head of immigration at Anderson Strathern, said the new “regulation heavy” system implemented after Brexit has been viewed as “more burdensome”.

“This is understandable, but UK employers may wish to approach this more strategically and have a sponsor licence in place in advance of recruitment drives and know how to use it before the conversation with the potential recruit begins,” he added.

Martin Drake, founder and chief talent finder at recruitment firm Higher People, said that, beyond visa sponsorship, organisations should also consider the possibility of using freelancers, remote workforces and outsourcing work: “If we focus on task accomplishment as the objective, then businesses should ask themselves ‘does someone need to be based in the UK to deliver this?’ If not, why not consider fishing in a global talent pool rather than simply a localised or domestic one?”