Banks Eyeing Dublin After Brexit Face Trader Shortage

  • Recruiting a trader locally can sometimes take up to a year
  • Banks eyeing Dublin to rely on relocating Irish staff in U.K.

Making the Case for Dublin Relocation

When Rob Boardman is scouring Dublin to hire for his firm’s electronic broking and dark-pool business, it can take up to a year to find the right candidate.

“It’s a question of quantity of talent, not quality," said Boardman, Investment Technology Group Inc.’s European chief executive officer, who has been recruiting in the city since 2010. "It can be hard to hire in financial services for front-office traders."

Dublin shares similar laws and regulations as its U.K. neighbor and is the only other English-speaking hub in the European Union, making the city a go-to option for London-based banks seeking uninterrupted EU access post Brexit. One big problem: a talent shortage. More people work in finance in Edinburgh than in the whole of Ireland, posing a concern for the half-dozen global banks who are considering setting up camp there.

"There are probably more Irish bankers working in London than there are in Dublin,” said Jonathan Astbury, partner in global markets at executive search firm Newington International. “There is still a sense among front-office types that if you’re not in London, you’re not at the cutting edge. Ultimately, London is going to remain the center of the banking world for many years to come, so Dublin is going to be a hard sell for them to attract the best people."
 

While cities across Europe have begun courting banks and their high-paying roles, all the potential locales have their drawbacks. Financial firms have concerns over language issues, labor laws and taxes in Frankfurt and Paris.

What will start as a trickle -- banks plan to move only a couple of hundred jobs into their new bases at first -- could quickly become a torrent if it looks like the U.K. is heading for a "cliff edge" Brexit, whereby all EU access is cut off by 2019. Firms weighing Dublin for their new base plan to initially relocate Irish employees currently working in London, according to two people with knowledge of their firm’s contingency plans.

Lacking Depth

There are about 35,000 people working in finance in Ireland, compared with more than 60,000 in Frankfurt, 180,000 in Paris and 360,000 in London. Goodbody, Ireland’s oldest stockbroking firm, estimates that Dublin could gain as many as 15,000 financial jobs from Brexit.

The talent shortage may not scare off banks that see Brexit as an opportunity to reduce costs. A few large international banks have held discussions about moving a small number of senior managers to their new EU hubs to train cheaper local hires while London jobs are cut, according to two recruiters who said they’ve had talks with the firms.

Read more: The Brexit exodus -- a QuickTake Q&A

Irish officials acknowledge that the country lacks the depth of banking talent available in other cities competing for Brexit spoils, but say they are confident they can attract workers from elsewhere in the EU. They point to the 250 financial institutions already in Dublin, including Citigroup Inc., JPMorgan Chase & Co. and Credit Suisse Group AG. Major tech firms, such as Alphabet Inc.’s Google, EBay Inc. and PayPal Holdings Inc., also have European operations there.

Moving Back

"In the context of a U.K. which will potentially be outside the EU where there won’t be such mobility, we are likely to win more of these highly skilled people coming to Ireland, and I think that’s the way our companies and potential investors are reading it," said Martin Shanahan, the CEO of IDA Ireland, the agency tasked with attracting international investment. "If the skills are going to be available, they are going to be available in Ireland."

There’s a wide range of financial companies considering an Irish outpost. Besides the largest banks, trading platforms like currency venue LMAX Exchange and Bats Global Markets Inc.’s London unit are also on the list. Chicago-based derivatives behemoth CME Group Inc. has examined Dublin as it seeks to ensure its clearinghouse retains access to EU customers, people familiar with the discussions said in November.

Brexit could help reverse a trend: For decades, the brightest Irish university graduates with ambitions in finance have sought out their fortunes in the narrow lanes of London’s square mile, according to Denis Curran, the IDA’s head of international financial services.

“If front-office or investment-banking jobs do come to Dublin as expected, then it would act as an incentive for Irish in those roles in London who may want to move back," said Peter Cosgrove, a director at Dublin recruiting firm CPL. "Up to now, the type of finance jobs available in Ireland have generally not matched London for compensation and other perks. Already, we have seen a spike in inquiries from Irish in London and EU nationals who were considering moving to the U.K. but are looking closer at Dublin as an alternative."

Where all these people are going to live and work is another matter. Dublin already suffers from an acute shortage of residential housing, particularly at the top end, a legacy of the country’s property crash. And while prices are significantly lower than in London, they’re rising fast.

Vacancy rates for prime office space in the city center are also at record lows. And Dublin is home to only five Michelin-starred restaurants -- a must for any well-heeled investment banker -- compared with more than 60 in London and 100 in Paris.

— With assistance by Dara Doyle

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