You might not want to leave London for Frankfurt or Paris or Dublin in response to Brexit, but if the opportunity to emigrate arises, you should seize it. Particularly if you happen to be an associate or vice president.
As banks prepare to shift a vanguard of staff out of London and into the European Union before Brexit bites in 2020, bankers say the juniors who arrive in the new European offices early on will be granted a significant opportunity to get ahead.
"The people banks move because of Brexit will be the ones who are young, flexible and willing to go wherever the bank sends them," predicts an executive director in the markets business at a major U.S. bank. "Yes, banks are going to need to move some senior people to sign off risk, but there won't be many," she adds. "It's just too expensive to move a lot of senior traders and their families."
Goldman Sachs has already indicated its intention of moving 200 people to Frankfurt by an unspecified date in the future. As we noted previously, the U.S. bank's German business is short on managing directors, but Goldman may choose to shift senior vice presidents and executive directors to Germany, rather than pay expensive relocation fees for senior U.K. staff.
Moving to Frankfurt in the first wave will bring huge career advantages predicts the ED: "Once the bank realizes that you're a flexible person who can work across different markets, you're likely to get promoted more quickly. You can also forge a niche for yourself as someone who can operate in the new market structure."
London juniors who don't get moved internally can always apply externally for new Brexit-related jobs in Frankfurt. Banking headhunters in Germany said they're expecting banks to boost local headcount by both shifting existing staff across from London and by hiring new people on the ground. "We expect that 50% or maybe more of the new jobs in Frankfurt will be filled by hires made here in Germany," says Nils Wilm, managing director of Bankenwelt Executive Search. He adds that there are already signs that the German market is opening up to non-German speakers: "Last week, we filled banking audit positions with non-German speaking Russians who spoke English."
For the moment, German headhunters say there's little sign of Brexit boosting recruitment. But this is expected to change soon. "We think the jobs will come in the third and fourth quarter of this year and early next year," says Wilm. "We've already seen banks making preparations with risk and compliance hires."
Carola Hansen at Frankfurt recruiter Brownian Motion agrees that Brexit-driven hiring is expected to start at the end of this year and to persist into 2018. Hansen says Frankfurt has an ample supply of risk and compliance professionals, many of whom are currently working for the Big Four accounting firms in Germany. Sales and trading talent, however, is more likely to be moved from London. "A lot of banks had traders in Frankfurt in the past, but they made them redundant or moved them to London in 2009 and 2010. It will be a question of moving some people back again."
Hansen says forward thinking London-based juniors are already plotting their moves. "Now, I get 20-25 calls every week from people in London who want to move to Frankfurt. Before Brexit became an issue I had 1-3."
London traders and salespeople who emigrate to Germany could be in for a pleasant surprise. "Logically, it's a paradise for banks here," says Stefan Mueller at consulting firm DGWA Financial Engineering. "Frankfurt is in the middle of Europe. It has a huge and nearby airport and a perfect train system and everything runs on time."
Mueller predicts that banks will use the transhumance of markets jobs from London to Frankfurt to cut pay. "Banks are going to get rid of the senior people who were paid £300k in London and replace them with more junior people earning €150k in Frankfurt."
Cost aside, Mueller says there's another reason banks will struggle to transfer senior staff with families to Frankfurt: schooling. "My kids go to the European School RheinMain in Frankfurt. The school has already received approaches from all the major banks to see if they have 50+ places for London bankers' children from 2018 and 2019. It's the same for all private schools, but these schools are already over-subscribed. Those places don't exist."