Investing in education versus overprotection

As we debate the impact of the rollover policy, the path to citizenship and a host of immigration related issues, the discussions seem perfectly imbalanced towards how we can protect our citizens even more, and far less on how we need to better prepare them for the job market of today’s and in the future. 

It is hard to find anyone who disagrees with the idea that Caymanians should be provided with fair opportunities to succeed, not only in terms of securing well paying jobs, but also in terms of becoming employers instead of employees. 

The problem is not so much with disagreement on the goal for our citizens, but in the approach towards achieving that goal. 

In one corner we have those that focus almost exclusively on immigration policy and in particular work permit policy, to find the answer to the question of why so many Caymanians are out of a job. At the other extreme we have those that believe that all we need to do is import labour when we need it, and the rest will automatically take care of itself. As expected, the answer lies somewhere in the middle, and that strategy requires investing in the training and education of Caymanians. 

In the United States, the unemployment rate among university graduates is 4 per cent, while the rate is 14 per cent for high school dropouts. Education clearly matters and there is nothing surprising about this conclusion. What is surprising is how little the subject of education is mentioned in the local debate on the immigration and unemployment situation.  

In my opinion, there are two key reasons for this. The first is that politicians and would be holders of office know that it can be very effective to place the majority of the blame on unemployment on work permit policy and abuse by employers. Like in any other country, some blame can easily be placed on so called glass ceilings at some businesses. But do we really believe that the answer to the current employment problem and the long-term future of Caymanians is to essentially force businesses to hire employees that they may not wish to hire? 

The harsh reality is that it is more likely that the reason that we have large sections of Caymanians unemployed today is because we have neglected to invest in their education and training for several decades. Faced with the crisis that has resulted from this neglect, policymakers have for years struggled to find ‘quick solutions’ that also ‘push the right buttons’ with the electorate. This usually results in finger pointing at immigration policies and magnifying the issue of discrimination to levels that lack credibility. 

There are numerous strategies that need to be employed to address the lack of preparedness of many Caymanians so that this country has a sustainable pool of employees whose skill sets are aligned with the country’s economic strategy, or more accurately the path it has naturally taken, since there has been very little evidence of a long term plan over the past two decades. 

One of these strategies relates to establishing an education and training strategy for the financial services industry, which represents at least 50 per cent of the Cayman Islands gross domestic product. Here are a few thoughts on the way forward: 

First, we should analyse data from the immigration department on the skills sets being demanded by firms in the financial industry because generally immigration data on work permits represents roughly half of the country’s labour force. The ability to research and analysis skill sets by using the existing work permit database is a unique opportunity that should not be wasted. 

The above information could be combined with direct research from firms regarding the skill sets of Caymanian employees, as this would not be immediately available from the immigration department. 

The third step, using the above information and working directly with the industry is to identify positions and determine core competencies and qualifications for these positions. Once this is agreed with industry, an action plan could be put in place to address the long-term investment into Caymanians. The resulting programme would include a variety of types of training and development strategies ranging from professional qualifications to university degrees to core job competencies and apprenticeships 9on the job training). 

A Financial Services Institute could be established to deliver or coordinate some of the training programmes. It is also likely that once the industry buys into a properly conceived and executed education and training strategy, they would also assist in funding such an organisation simply because it helps them to secure a more stable pool of qualified employees. 

A similar approach can be taken with other industries. The main point is that while it may be costly and take some time, it would be the best investment the country can make at this juncture, and it would ensure that over the medium to long term Caymanians are better placed to either increase their value (and therefore wages and personal benefits) if already employed in the industry or secure a new position in the sector and eventually resulting in some taking an ownership stake in firms in the industry. 

The stock response to ideas relating to training in the financial services industry is that either the government is to blame because the key issue is that basic secondary education is poor, or that most children are not interested in or likely to end up working in the sector anyway so the answer lies in ensuring that vocational training programmes are in place for other industries. Ironically if a structured program were put in place this could be exactly the catalyst to improve both of these situations. 


Paul Byles is an experienced economist and finance professional having worked in the financial services industry for 20 years. He formerly served as an external consultant to the Ministry of Finance from 2009 to 2010. He is former director of a big four consulting firm and a former financial services regulator. He is author of the book ‘Inside Offshore’ which will publish its second edition in 2012. He is also currently commissioned by the BVI Financial Services Commission to author an introductory textbook on offshore financial services in the BVI.