How Covid-19 will impact the makeup of London’s workforce

For those of us yet to win the lottery, work is a fact of life, meaning its demands, expectations and opportunities can never be fully removed from the choices we make. Our jobs affect where we live, our role in our families, as well as how we spend our free time.

Then typically, when a crisis like Covid-19 hits, the trends impacting society and the economy tend to halt, reverse, or speed up. And for something as significant as this pandemic, the impact is just as great on the choices we make in our lives.

It’s a well-known fact that 1 in 3 UK graduates move to London for work. The ‘brain drain’, as it’s known, is partly responsible for pre-Covid reports that 3 in 4 businesses in the UK struggle to recruit the people they need.

Back in March, we examined migration trends within the UK and outlined the threat and opportunity facing our customers through ‘the reversal of the brain’. Put simply, the rising cost of living, mixed with growing family commitments and aspirations to own property had left many younger workers disillusioned with life in London – and we estimated that one million young workers are set to leave London by the age of 33.

Working from home, wherever that may be

Covid-19 has led some 40% of Brits to work from home over the past few months, and it’s natural that people who have benefited from an improved work-life balance, remained productive and spent more time with family, should want and expect a wider take up of remote working by employers when the crisis subsides. While some tech giants and start-ups have operated this way for years, Covid-19 has forced this shift on the majority of employers.

The longer-term ripple effect of this, can be summed up with the question: if people don’t have to live near where they work – will they still choose to?

To find out, in July, we revisited our predictions by analysing the most up to date ONS figures (from 2019) and surveying a fresh crop of workers during the Covid-19 pandemic. We found that two in five Londoners are now reconsidering the area in which they want to live, and 1 in 4 are now looking to move earlier than previously planned. This might not be wishful thinking, with remote working allowing city workers across the UK to work elsewhere over the past few months, with 27% not wanting to return.

The reasons for this are similar as before and provide few shocks. There’s a desire for more outside space (34%), family commitments (25%), and reducing costs (24%), while new factors such as the Stamp Duty Holiday means there’s also financial incentives at play.

In all, our latest research suggests almost 1.6 million people are planning to move out of the capital because of Covid-19.

Replacing lost talent in the capital

The Totaljobs study suggests that the reversal of the brain drain is speeding up, and with this, the next logical question is, will the brain drain end altogether?

Focusing on the cost of getting a job, recent research from Milkround revealed that the average graduate spends £2,631 relocating for their first job.

But while 77% of graduates agree that moving would bring them better career opportunities, only a third can afford to do it. As the volume of graduate opportunities begin to recover from the pandemic, remote working will be a factor, meaning there’s every chance that with London’s weakening pulling power, there could be a shortage of young talent in the capital.

Key takeaways for employers

With the high cost of living in London, and the desire to foot the bill slipping away for many workers, there are clear areas of focus for employers.

Long-term remote working

A quarter of 25-34-year olds believe remote working can help them save money by giving them the freedom to move to a cheaper area. For employers, embracing the potential of flexible working for roles that can be carried out this way will help them to retain staff, even those with plans to move further away from cities.

For those employers not based in London, our research shows that half of millennials believe job prospects have improved across the UK. And with many saying that they would be interested in applying for roles outside of London if flexible and remote working options were available, there’s a real opportunity for regional employers to attract highly skilled and experienced people looking to relocate – or indeed, offer them jobs which can be done remotely from wherever they’re based.

Support with childcare

As commitments change for young workers, 1 in 4 are leaving to start a family. However, support with childcare would mean 22% of under 35s would be less driven to move out of London.

Salary bench-marking

Salary bench-marking would encourage 42% of millennials to stay in London, and for those looking to get back to, or continue, face to face interaction, support with travel costs would enable 28% of people to move out of the capital but stay with their employer.

Financial support for entry-level talent

If on-site working is a must, the attraction of new talent can be mitigated with financial support or relocation packages, which Milkround research suggests could help 66% of graduates to relocate and take up a position in London.

Looking ahead

It’s apparent that by reconsidering remote working policies to better meet the new expectations of workers following the pandemic, employers can attract and retain talent. In fact, Totaljobs research found that 25% of workers have already requested to continue remote working long term, meaning location could become less of a barrier for hiring talent altogether.

As we move into an employer-led market where there are more people looking for jobs than jobs available, now is the time to rethink the way we work, and in turn, the way we recruit.

The employers that will stand out from the crowd will be the ones that take heed of these changing trends and shifts in priorities for their current and future employees