How will Brexit affect BPO companies in the UK and Europe?

By Matt Hyde, Managing Consultant - Business Process Outsourcing, Mosaic Search & Selection

Since June 23rd of last year, "Brexit" has been the one word we haven’t been able to escape. Having decided to leave the European Union, the UK now faces a long period of economic uncertainty, as businesses of all sizes scramble to adapt. If you’ve been keeping up with the news, you’ll know that things have already begun to change – Deutsche Bank has announced its plans to relocate from London to Frankfurt, and there has been a 96% drop in EU nurses registering to work in the UK.

The question is: what does Brexit spell for business process outsourcing companies?

The Future of UK Outsourcing

The good news is that, as of yet, the outsourcing industry doesn’t seem to have been negatively impacted to any major extent. In a report from September 2016, it was found that investor confidence in BPOs had stayed strong following the Brexit vote.

An issue that does have to be faced is the fact that the UK will lose a large number of global trade agreements, to which we currently enjoy access due to our EU membership. This is not necessarily a catastrophe – recently a number of Spanish business leaders suggested that the UK could do very well as an independent global trading hub. In the wake of Brexit, though, certain markets such as India (where many BPOs currently outsource to) will have to be prioritised to ensure that UK industries can be sustained.
Onshore vs Offshore

For BPOs the main consideration going forward will be the onshore vs offshore debate. Many companies will assume that the easiest thing to do is base their outsourcing within the UK, but the opposite may be true in many cases.

Following Brexit, skilled migrants from the EU will find it more difficult to gain access to the UK for work. This may lead to UK BPOs offshoring to enable easier access to the skilled European workers they rely upon.

Having said that, there may still be hope on the horizon for onshore outsourcing – particularly for BPOs specialising in tech. In May, Tech City UK (the government body responsible for granting visas to exceptionally skilled tech workers) announced that successful applications had quadrupled in the last year. It’s hoped that this news will encourage the British government to introduce special measures for skilled tech workers, a move that would enable the UK tech industry to continue to flourish.

While it’s still uncertain exactly how Brexit will affect BPOs in the UK and Europe, there’s no cause for alarm just yet. Companies should prepare for higher employment costs and potential hurdles in continuing to outsource abroad, but overall, the future remains bright for outsourcing companies and the valuable work they contribute to the British economy.

If you’re concerned about your business, don’t forget that Mosaic Search & Selection can assist with all your senior level recruitment needs. Get in touch today; we can help locate the ideal candidates to help you through this period of uncertainty.


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