The Impact of Brexit on Executive Search — the Netherlands Perspective

It has been almost five years since the United Kingdom cut its bonds with the European Union. Brexit has significantly affected various business sectors, including the executive search. These changes have been particularly notable from the perspective of the Netherlands, a key business player in the European Union.

This article explores the impact of Brexit on executive search within the Dutch market, shedding light on challenges and opportunities that must be faced.

Market Uncertainty After Brexit

According to their pre-Brexit exposure to the European Union, it had various impacts on many firms. Companies heavily reliant on trade, investment, or workforce from the EU faced the most prominent challenges.

The UK’s decision to leave the EU has generated a high and persistent increase in uncertainty. This vagueness impacted planning and investment, as companies must navigate a complex new regulatory environment while trying to forecast potential impacts on market access. Businesses and investors were grappling with the implications of new trade barriers, potential tariffs, and the changing landscape of labour mobility.

Prioritizing Post-Brexit Maintenance of European Market Access

Due to continued uncertainty, numerous UK businesses relocated their headquarters to EU member states or established subsidiary companies within the EU in anticipation of the Brexit transition period. Organizations had one goal: maintaining European market access.

They wanted to ensure that their business didn’t just survive this hectic period but thrived. In 2019, the British Institute of Directors¹ stated that nearly one in three UK firms were planning for a Brexit relocation. According to a report created by the think-tank New Financial², almost 500 companies in banking and finance had moved or planned to move part of their business, staff, assets, or legal entities from the UK to the EU by April 2021.

The Netherlands — the new business hub in Europe

Brexit enhanced the Netherlands’ position as a new business hub in Europe. The country’s position as a gateway to Europe made it an attractive hub for multinational corporations. This shift is primarily driven by its strategic location, robust infrastructure, and highly favourable business environment that attracts international corporations.

The Netherlands offers favourable tax incentives for foreign businesses and a transparent and supportive regulatory landscape. Business there is deeply rooted in sustainability and innovation. Moreover, the Dutch workforce is highly skilled, well-educated, and proficient in English, which makes collaboration seamless for international companies. Expats seeking a high quality of life are impressed by the country’s world-class healthcare system and welcoming environment.

Executive Labour Market in the Netherlands

The executive labour market in the Netherlands felt the brunt of Brexit. In the immediate aftermath, hiring was cautious, with companies weighing the implications of economic turbulence. Additionally, the altered labour mobility between the UK and EU has reshuffled talent availability.

The post-Brexit landscape has necessitated reevaluating the skills and expertise required. There was an increased focus on leaders who can navigate regulatory changes and foster innovation in a more isolated business environment.

Executive search firms have had to adapt to a broader range of challenges, including changes in client needs and a tighter talent pool. The requirement for more specialized knowledge, particularly in dealing with EU regulations and international trade, has become more pronounced.

Executive search firms in the Netherlands had to adapt quickly. Many shifted their focus from a predominantly international talent pool to a more localized or EU-centric approach, while still leveraging global networks when beneficial.

Impact of Brexit on the Dutch Executive Search Companies

The consequences of Brexit have been particularly pronounced for Dutch executive search firms, illustrating a complex interplay between geopolitical shifts and corporate strategy.

Post-Brexit Regulatory Changes

Brexit introduced a new regulatory framework for businesses operating between the EU and the UK. Executive search firms had to start navigating changes related to permissions, employment laws, data protection under GDPR, and many more, complicating British and EU executives’ recruitment process and mobility. New immigration and labour market regulations have led to a more restrictive movement of skilled workers between the UK and European countries, including the Netherlands.

Geographical Focus after Brexit

After Brexit, executive search firms pivoted their focus within Europe, prioritizing regions with stable regulatory environments and robust professional talent pools. Countries like the Netherlands, with dense concentrations of skilled executive professionals, have become immensely attractive.

Governments across the European Union actively vied to position themselves as appealing destinations for companies considering relocation after Brexit. The most popular locations to retain a European Union presence included (but were not limited to) Ireland, Cyprus, Germany, Belgium, France, Luxembourg, and the Netherlands. According to Reuters³, over 300 Brexit companies have moved their operations to the Netherlands. The relocation included major corporations, such as Panasonic and Sony.

Globalization Reassessment

Contrary to the common perception that the European Union has emerged as the epicentre for recruiting C-suite executives, numerous corporations have allocated their resources beyond European borders. They targeted major global business hubs, such as Singapore, Hong Kong, Dubai, and New York City.

Companies that operate globally recognized the value of diverse talent pools and emerging possibilities worldwide. By extending their executives’ search activities outside Europe, businesses enhanced their abilities to innovate and compete globally. This expanded geographical outreach required a different approach to various business cultures, regulations, and leadership competencies specific to given regions.

Shift in Labour Dynamics

Brexit has notably impacted workforce flows, as fewer foreign workers were employed in the UK. A Centre for European Reform⁴ study found that it led to a net loss of 330,000 foreign workers, as many specialists, managers, and executives relocated from the UK to other EU countries, including the Netherlands.

The pre-and post-Brexit transition involved shifts in corporate bases and significantly impacted the local and international labour dynamics, catalyzing growth in the finance, technology, and logistics sectors. This, in turn, generated a growing demand for highly qualified executive talent capable of managing more complex, international structures. This shift had a different impact on various sectors.

Talent Pool Shift

Brexit has caused a redistribution of talent across Europe as professionals have reassessed opportunities and companies have adjusted their hiring strategies. It significantly impacted the composition and dynamics of the talent pool within the UK and the EU member states.

This shift influenced labour mobility and many companies’ strategic recruitment and workforce planning strategies. Visa requirements and uncertainties around residency rights made cross-border movements more complex, impacting the availability of top-tier talent, potentially discouraging high-skilled migration to the UK, and redirecting talent towards more accessible EU countries.

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Market Uncertainty Leading to Cautious Hiring Decisions

Brexit-induced uncertainty led to cautious hiring decisions among businesses, affecting the demand for executive search services. As companies had to navigate the complexities of a post-Brexit landscape, many have adopted a more conservative approach, prioritizing operational stability over further expansion. Such an approach also impacted their recruitment strategies.

Businesses’ reluctance to commit to high-level appointments without a clear understanding of the economic and regulatory future led to a slowdown in search assignments, impacting the demand for C-level recruitment services. This cautious hiring period forced executive search firms to reassess their service offerings and adapt to the changing market demands.

Cultural Considerations

Brexit imposed the necessity for more refined and culturally aware approaches to executive search. Companies had to adopt recruitment strategies sensitive to Europe’s varied cultural, regulatory, and economic landscapes. Each EU member state is characterized by different work ethic, communication styles, leadership expectations, and business approaches. Executive search companies had to ensure that the talent acquisition strategies were as culturally appropriate and inclusive as possible.

Technology Adoption

After Brexit, executive search companies were pushed to enhance their efficiency and efficacy to address coming complexities. This could be done through the adoption of advanced technologies. Due to challenges related to compliance, labour mobility, and market access, executive search companies started implementing technology to streamline and optimize their recruitment strategies. Integrating artificial intelligence or big data analytics could revolutionize how executive search firms identify, attract, and retain top talent after Brexit.

Client Relationships

Executive search firms had to deepen client relationships by offering strategic guidance on navigating post-Brexit talent landscapes. This shift transformed these companies from transactional service providers into trusted advisors in these uncertain times. The reason behind such a switch lay in complex and multidimensional immigration policies, regulatory frameworks, and the movement of talent across borders. Executive search firms could assist organizations in understanding these changes and adapting their recruitment strategies accordingly.

The Impact of Brexit on Executive in Europe — the Bottom Line

Brexit has profoundly impacted the executive search industry in the Netherlands, forcing it to adapt its working methods and approach to international recruitment. This has opened new opportunities and challenges, requiring an innovative talent management approach. Executive search firms in the Netherlands had to adapt quickly. Many shifted their focus from a predominantly international talent pool to a more localized or EU-centric approach. The quick adoption, combined with the country’s position as a gateway to Europe, allowed the Netherlands to become a new European business hub.

About the Author

Frederik Prins as a Partner at Neumann Executive in the Netherlands brings an extensive portfolio of experience and expertise that will contribute immensely to our Financial Services and Industry Practices.
In his role, Frederik is primarily responsible for conducting searches for C and C-1 level executives in the Benelux region, and across Western Europe where applicable. His global perspective and proficiency in business development, operations, and consultancy will provide invaluable insights and strategies to our clients. Find out more about Frederik’s expertise here.