The Journal spoke with Steve McIntosh, CEO of CML Offshore Recruitment, about the state of the recruitment market and his expectations for 2012.
Given that the number of work permits has been declining in recent years, does that mean your business in Cayman is shrinking too?
Although business was undeniably slow through 2010, it has been picking up pace consistently during 2011 and as of Q4 we were approaching pre-financial crisis recruitment volumes. Remember, there are less than 2,000 work permit holders in the financial services sector, less than 10 per cent of the total. Most of the decline in work permits has been in other sectors.
The two drivers of our business are growth and turnover. Although growth is still lacklustre in most sectors and most companies, it doesn’t take much to shake up the market.
Just as in many western government cabinet rooms, some in business have spent the last year or two obsessed with austerity (to be fair, some companies have had little choice). But pruning too far on pay and perks, or expecting too much more for too much less, risks making people unhappy and causing them to leave. Because a fleeing staff member needs somewhere to go, and their employer a replacement, a little heavy-handed corporate austerity can be good for the recruitment business and it certainly was in 2011.
Have you been expanding outside of the Cayman Islands? Although CML has always had an international client base, we have been slowly increasing our footprint outside of the Cayman Islands, starting with our Hong Kong office, which opened its doors back in January 2009. Headed up by former VP of legal recruitment here in Cayman, Rob Green, the office now has around 15 staff mainly focused on private practice and in-house legal recruitment.
As a first foray into international expansion, Hong Kong was a logical choice. As a booming financial centre it was fertile ground, somewhat sheltered from the inclement conditions afflicting western economies. Rob’s expertise and relationships provided a foothold among the offshore law firms which, even then, had a strong and growing presence there. I had the chance to speak to several clients and candidates during a visit in March last year and it was immensely gratifying to hear their positive feedback and to see how strong the CML brand has become there. In a market with some of the biggest names in international recruitment that is no mean feat. The experience competing with big names in Hong Kong has definitely helped us here in Cayman.
I’m very pleased to announce that we are planning to open our third office in Bermuda in Q1 this year. As with Cayman and Hong Kong we have put a strong emphasis on technical expertise. Although we’ll be offering the traditional gamut of financial and legal recruitment services our first hire there is a technical reinsurance recruiter. That will be a valuable new string to our bow.
Are the tools of the trade changing, for example regarding the use of social media?
Today’s recruitment tools would be virtually unrecognisable to anyone that left the profession in the nineties. However, at the end of the day CML’s purpose in life is to help managers and executives find and hire the best people available. Because recruitment is first and foremost a people business there is only so much scope for technological advancement or disruption. What has changed is mainly how we find candidates and maintain a connection with them as they move through their career. In fact, at CML we spent most of the last year re-working our platform to make better use of technology both internally and externally.
2011 saw the launch of our CML TV channel, which has been a phenomenal success. The idea behind CML TV was to allow our clients and local businesses to tell their story directly to local and overseas candidates and to help promote Cayman as a place to live and work. Using technology to facilitate these connections is the essence of social media. Launching in March, we produced more than 50 videos for all manner of financial services companies and local organisations, many of whom may otherwise have had no knowledge of the Cayman Islands. A keystone of our social media campaign, CML TV helped us reach the milestone of 1,000 friends on Facebook shortly before the turn of the year. If this doesn’t sound impressive consider that it is almost eight times our closest competitor and snapping at the heels of the mighty Compass itself with 1,300.
What is your expectation for 2012 and how does that compare to 2011?
In the recruitment world, the calendar year is normally “out like a lamb, in like a lion”. Given the exceptionally strong close to 2011, we’re expecting a very strong start to 2012 when the CFO’s purse strings are traditionally prized apart, however temporarily, and people often become despondent at the thought of another year of drudgery at the same old desk under the same objectionable boss. Traffic on the CML website in January is generally two to three times that of December and we expect this year to be no different. Some other factors give me cause for optimism for 2012 and beyond.
First, although growth in the financial services sector as we know it will be languid, the recently-announced concession package aimed at attracting reinsurance companies has the potential to be a game-changer for the Cayman Islands. Although the package has yet to be formalised and promoted, the Cayman Islands Government appears to have taken immigration restrictions and cost off the table for reinsurance companies. This is an offer that’s hard to refuse when combined with the many other advantages Cayman offers to businesses and their staff.
In fact, the only companies that got a better deal than that proposed for reinsurers are the tenants of Cayman Enterprise City, Cayman’s new special economic zone and the second reason for my uncharacteristic bullishness on the Cayman economy. With companies round the world weary of over-reaching tax collectors, it’s hard to see what’s not to like about CEC. The promise of thousands of new highly skilled jobs is manna from heaven for any recruitment professional, not to mention for an economy hard hit by stubbornly high unemployment in recent years.
Add to that the expected breaking of ground on the Narayana Cayman University Medical Centre and the much-needed short-term stimulus from the For Cayman Investment Alliance and things are beginning to look up for the Cayman Islands economy in 2012.
On the other hand, the creaking old immigration system continues to be the 800 pound gorilla-fly in the ointment room, to genetically re-engineer my metaphors. Little wonder that the three gleaming shafts of light in the economic abyss are predicated on virtually total exemption from it. It is a shame that the companies and industry sectors that built much of Cayman as we know it continue to be chastened by it. Imagine what could be achieved in the economy by firing the old engines along with the new.