Burberry, HSBC and Freshfields Bruckhaus Deringer, the law firm, have at least one thing in common. All are moving significant parts of their businesses from London to UK cities further north — Leeds, Birmingham and Manchester.
They could soon be joined by two big UK media companies: the Guardian newspaper, which is considering moving parts of its operation to Manchester, and Channel 4. The government is deliberating whether the broadcaster should move its headquarters out of London — and Liverpool is bidding to be its home.
If big employers are interested in cities north of the capital, is now the time for London-based workers to think about relocating?
The start-up founder:
‘The biggest benefit is cost’
Those with sought-after skills, such as finance, law and technology, sometimes secure a pay rise when they move north, on top of significantly cheaper housing and a lower cost of living. But much depends on the industry they work in, and the city they choose. Here is how to make it happen.
Where to work
By choosing a city hotspot for your industry, you will have a greater choice of jobs and access to a stronger professional community, says Chris Poole, managing director for the UK regions at Robert Walters, the recruitment consultancy.
That “gives people comfort that they can progress”, says Mr Poole. “They’re not just going to move to a single employer then have to think about what happens next.”
Niche city specialisms have emerged. For example, Julian David, chief executive of the industry body techUK, says Edinburgh has developed a strong artificial intelligence industry, helped by Edinburgh University’s expertise in computer science.
And the Midlands town of Leamington Spa, known for its Regency architecture, is a national hub for the gaming industry, with employers including Hardlight, which produces Sonic the Hedgehog games and others for Sega.
Who to work for
The list of large employers expanding outside London is long. HSBC still has about 300 posts to fill in Birmingham, where it will open its UK headquarters in January 2018. Freshfields Bruckhaus Deringer plans to increase staff numbers at its Manchester office, which opened in 2015 and runs support services, from 400 to 600 in the next 12 months. And Burberry, which announced in May that it plans to move finance, HR, procurement, customer service and IT functions from London to Leeds, will employ 300 people in the city.
PwC, the consultancy, also plans to expand outside the capital. “We have 60 per cent of our people in London today, and I can see over the next [four to five] years, it will probably be more like 50 per cent because we are looking for the growth outside London,” says Stephanie Hyde, UK head of regions.
Other employers are moving work to the north of England from abroad. EY, the consultancy, plans to expand its data analytics team in Newcastle upon Tyne, which mines clients’ data to identify trends and anomalies.
“Traditionally, we would have grown that team overseas,” says Sandra Thompson, managing partner at EY’s Newcastle office. “We were using talent in Mauritius and India.”
While costs in Newcastle are low, she says, overseas they are rising because of the fall in the value of the pound since the UK’s vote to leave the EU, and because of price increases from Indian companies.
But if you do make the move, avoid talking about having been “northshored” — a term sometimes used to describe companies moving parts of their business north. “It [sounds] as if it were outsourcing some rather uninteresting work to a northern outpost,” says Robert Bourns, president of the Law Society. “It’s not a fair description of the quality of the work that’s going on.”
The north-south pay gap can be startling. A report published in September by the Law Society showed that while equity partners in the highest-paid quartile at London law firms earned £400,000 per year, the equivalent in the north-west of England was £90,000.
“The salary reflects the money that can be generated from the work that you do in that marketplace,” says Mr Bourns. Outside London, “there’s less being earned, so the salaries are lower”.
But the gap is not always so large. PwC pays its graduate trainees and newly qualified staff about 30 per cent less in the north of England than in London, but says living costs can be as much as 60 per cent cheaper — meaning it is, in real terms, a higher salary.
Mr Poole of Robert Walters says experienced specialists in industries such as finance, law and technology often do not have to accept a pay cut at all.
“If you’ve got a niche skillset and you’re in demand then, absolutely, you can negotiate parity [with your London salary] — and sometimes an uplift,” he says.
Other cities cannot match the capital’s scale, however. “London has such a deep labour market, with opportunities for career progression and to jump sectors that are unrivalled in the UK,” says Paul Swinney, principal economist at the think-tank Centre for Cities.
The move north is particularly difficult in some industries. Almost 80 per cent of Britain’s television programming and broadcasting jobs are in London, as are 71 per cent of fund management posts and 58 per cent of public relations jobs, according to a report published by GLA Economics in November.
The consequences for those outside the capital, as well as fewer opportunities to progress, can mean frequent early-morning train journeys to London.
From 2026, that should be easier with the opening of the £56bn HS2 high-speed rail line project, intended to slash journey times and boost rail capacity between London, Manchester and Leeds.
Mark Gregory, EY’s chief economist, says that at a recent dinner with Manchester-based bankers, “probably half of them were on the first train to London the next morning, for big deal meetings”. He adds: “Over time, more of that financial decision making has moved southwards. Maybe we’re trying to reverse that drift, but it’s going to take a while.”