Steve McIntosh, CEO of CML Offshore Recruitment discusses the factors influencing the attraction of talent to the Cayman Islands in 2013.
The final session at Campbell’s recent Fund Focus conference was billed as a discussion on the future of the Cayman’s funds industry.
Whilst several of the distinguished panellists expressed confidence in the “Cayman Islands model” touting our unique combination of manpower, expertise and effective regulation, one panellist quipped that the main reason that he was bullish on Cayman was that “it’s a great place to live”. While some in the audience may have seen the comment as flippant, to me it was deceptively insightful.
Cayman is indeed a great place to live. So much so that every day financial professionals by the score, from all corners of the world, register an interest in relocating here to live and work. On the flip side, many of those having made the Islands their permanent home are loth to leave without a metaphorical fight, moving to new opportunities here in Cayman rather than overseas when personal or career imperatives demand.
It is this “gravitational pull” alluded to by our wise conference panellist that gives the Cayman Islands financial sector much of its competitive strength and from which most of the other qualities invoked during that discussion derive. Consider the wealth of talent, both home-grown and imported, that chooses to live and work in our Islands when the world is their virtual oyster in terms of employment and entrepreneurial opportunity. Yet for a talent pool like this to continue to thrive it must be fed with opportunity.
Some of the factors shaping, feeding and constricting such opportunities in 2013 are already apparent, others nascent. Rather than appraising the employment market sector by sector, I’ve chosen to highlight some of the trends and factors to watch out for in the coming year.
First, 2012 saw an unprecedented level of movement in the upper echelons of the Islands’ talent pool, almost irrespective of industry sector and specialism. The underlying drivers of this trend are more difficult to divine by observation than by economic first principles. To the extent that opportunities are being created by people leaving, it can be assumed that outgoing managers are being attracted by better opportunities (ie higher remuneration). Many of these better opportunities are right here in Cayman. Alternatively, to the extent opportunities are entirely new, companies must be finally seeing opportunities for growth. Both are encouraging portents for the Cayman Islands employment market and for the financial sector more broadly.
However, a third possible driver of senior turnover is much less positive – increasing cost of living. After several years of deflated rents (anecdotal evidence suggested rents 20-40 per cent down from peak 2008 levels), signs are that rents have begun to creep upwards once again. As I have previously pointed out, a saving on rent was as good as a salary increase, and for many in the financial sector, it was as close as they have been likely to come in recent years. While most economy-watchers like myself celebrate new job-creating initiatives like the so-called “Shetty Hospital” and Cayman Enterprise City, there is some risk that rapid yet relatively small increases in population could put disproportionate upwards pressure on rents (the prospect of new tenants arriving by the hundreds may be enough to make weary landlords hold out for more). This would in turn put upwards pressure on salaries. If that happens, employers not acceding to it will lose people. Those with families – management and executive-level staff – will be the most sensitive to such an increase. Anecdotal evidence suggests that the increase in the cost of living (unmatched by that in remuneration) is already encouraging senior professionals in Cayman to “consider their options”.
The second major trend is in technology recruitment. Whilst CML has been active in technology recruitment for several years, the majority of roles available heretofore were in other offshore markets (predominantly Bermuda). In 2012 fully half of our IT roles, in both network support and development, were here in Cayman. Cayman firms are investing more heavily in technology as a possible route to growth. According to the CML IT recruitment team, development skills most in demand are C+, .NET, WPF, WCF and MVVM. Professionals adept at working with Cisco, VMWare and CheckPoint platforms are also sought after.
Third, the glut of candidates for accounting roles experienced since 2009 persists with some roles attracting upwards of 30 candidates. Employers can afford to be very choosy and most often are. Those determined to spend their full personnel budget can normally find someone with first class qualifications and relevant experience. Companies preferring to save money can normally find someone perfectly adequate for much less. Accounting for less than one in ten of the local professional ranks, Caymanian accounting and IT candidates are in particularly high demand.
One of the factors driving the aforementioned glut of accountants was the ongoing bloodletting in the fund administration sector which also saw three significant business combinations in 2012 – the State Street acquisition of Goldman Sachs in Cayman, Intertrust’s acquisition of Walkers Global and the acquisition of Admiral by Maitland. While there seem to be no signs among the new owners of an exodus, it is far too soon for chicken-counting.
Which brings me to my final point, the prevailing political maelstrom. While many have focused on the negative PR implications of the turmoil, I am less concerned about the politicking than the policy-making. The Cayman Islands has serious social and economic challenges that require serious attention. The main downside of the current upheaval is the distraction it constitutes to those in charge – appointed/elected officials and civil servants alike – whose time would be better spent focused on solving real life problems than coping with political ones. Lamentably, thanks to the impending general election campaign the distraction seems set to last till a new Cabinet is appointed in several months time.
Although it is said that it takes a year for a new government to find its feet and begin to enact its agenda, the effect of sentiment in the private sector can often be felt right away. If the private sector believes a new government will take down some of the historical barriers to economic growth (first and foremost excessive work permit fees), or better yet, establish policies and institutions that actively facilitate growth, the coming year could be a game changer for Cayman. Otherwise, it could still be a game changer, but for all the wrong reasons.
Either way, residents of the Cayman Islands should keep such things in perspective and remember that the land they love is, and will always be, a great place to live.