Study predicts UK job exodus

Nearly a third of UK jobs at global corporations could go overseas, according to new research.

UK competitiveness, eroded by poor skills, high taxes, excessive costs and stifling regulations has led to the UK’s largest multinational companies preparing to move more business functions overseas. This places a third of their UK jobs at risk, new research by Roland Berger Strategy Consultants reveals today.

Business leaders at UK-based global firms believe the potential exists for nearly a third (29 percent) of their current UK jobs to be transferred to lower-cost economies by 2015, blaming the dual-impact of the economic crisis and decreasing UK competitiveness for the exodus.

David Stern, UK Managing Partner at Roland Berger Strategy Consultants, commented: “The recession has prompted our largest companies to re-examine the UK as a business location in terms of skills, cost and infrastructure. Globalisation is enabling them to consider unprecedented levels of offshoring across all aspects of their business, which could result in permanent damage to the UK job market and economy.”

The study, Shipping Out, conducted among senior decision makers from 200 of the largest UK-based international companies, also reveals the erosion of the UK’s competitiveness in a globalising economy.

The vast majority (81 percent) of the UK’s largest multinational firms are planning or considering moving at least one major business function overseas by 2015. The findings indicate a massive acceleration of international outsourcing and offshoring, with more than half of companies having already moved or considering moving support functions such as IT (68 percent), finance (58 percent) and HR (53 percent) overseas.

More alarmingly, however, the study demonstrates that functions previously considered as core and permanently linked with the UK are now being moved abroad. Although only a minority (13 percent) of firms have Head Offices outside the UK, another two-fifths (38 percent) of the UK’s multinational companies are currently considering the move in a bid to stay competitive.
 

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