Are funds facing a recruitment crisis?

Written by: Dave Waller Posted: 13/11/2017

BL53_recruitPopulation controls and on-island education are just two of the challenges facing Jersey and Guernsey when it comes to employing people in their growing funds industries

The funds industries in the Channel Islands aren’t exactly part-time operations. As of June, Guernsey had £271bn of funds under management and administration, while the value of regulated funds in Jersey stood at £263bn. The industry in both islands is growing, employing thousands of people (an estimated 4,000 in Jersey alone) in every facet, from hedge funds and private equity to real estate, fund administration, depositaries, law and, increasingly, compliance. 

All that growth doesn’t come without its pressures. A machine like this is always going to require fresh brain power, especially as it has to react to constant changes in the industry. But, like other aspects of the finance sector, funds face a major, and unavoidable, issue – you can only fit so many people on an island.

Not only is there a natural limit to the number of fund-literate professionals resident on any small lump of land, but geographical constraints also mean the governments in both islands are being forced to tighten population control, restricting the potential to bring people in. 

As part of upcoming changes to its population policy, Jersey’s Population Office revoked 283 permanent registered permissions – the licences that allow organisations to introduce employees from off-island – in the six months to August. It revoked only 47 in the first half of 2016. 

It doesn’t take much brain power to recognise that, while such measures may help preserve the islands’ coveted quality of life, they’ll also restrict the influx of fresh, talented funds professionals.  

“Two or three years ago, I can remember being at an Institute of Directors event and Geoff Cook, the head of Jersey Finance, was asked what kept him awake at night,” says Shelley Kendrick, Director of Jersey recruitment consultancy Kendrick Rose. “He said: ‘The number of calls I get about employment and licences’. And that hasn’t changed – it’s still a big issue at the forefront for many companies.”

These companies are certainly recruiting from a small pool. When a new role in funds comes up on the islands, it typically heralds the start of a short game of ‘musical roles’, in which those with the requisite experience shift from one job to the next, each filling the vacancy left by the person who’d moved on ahead of them. Which is fine for those individuals, but not so good for a growing industry.

Attracting the talent

So where does fresh blood come from? A natural first port of call for recruiters is to those who’ve left the islands to study elsewhere. But the reality, according to Teresa Lamy, Head of HR at First Names Group, is that graduates may take five to eight years to return home. If, that is, they come back at all.  

The trick, she says, is to be open-minded in your approach. “We used to go to market looking for youngsters with relevant degrees. But looking at our own management committee, most of them didn’t start in finance. So, we now look for intelligent people with the right attitude who fit the organisation culturally, rather than having the right field of study. Recruit on that criteria and you expand the span of people.”

As for bringing new talent to the islands, organisations do have limited numbers of licences with which to lure in people from outside. Many will try to save these for crucial hires. Yet even with the right permissions, it’s not necessarily easy to tempt external candidates across. These are uncertain times, and people are thinking harder about where they choose to live. Anyone committing to the islands will have to be happy to be saddled with London prices, but without all the culture and convenience of the capital. 

“You do have to do a sales pitch on Jersey and how island life is,” says Jo Hewlett, Head of HR for Aztec Group. “And for some it is a turn-off. But our CFO joined us from the UK – the sales pitch worked on him. Once here, people do tend to appreciate the beauty and fall in love with the place.” The key, she says, is “to retain them once you’ve found them”.

What unites organisations in the Channel Islands, especially smaller companies, is the work they’re putting in to establish smarter ways to not only attract people but to keep hold of them and grow organically.

Innovative approach

To do this, they have to make themselves stand out from rival employers in everything from their organisation’s ethics to the opportunities for training and development they offer new recruits. This takes innovation, whether that’s sponsoring graduate awards or encouraging interns to use social media to show off the company culture.  

“I just had an organisation speak to me, saying they’d made offers to three graduates,” says Shelley Kendrick. “They lost all three because other organisations on the islands were offering this fantastic social life, employing lots of others like them through a structured graduate programme. Things like training and coaching, leadership development and succession planning are all growing and being revamped.”

A few years back, this may well have been a problem. In the period following the financial crisis, many organisations stopped recruiting and, following the now-familiar pattern, budgets in non-fee-earning areas such as training and development were the first to be given the kibosh.

“When times are hard, the training budget is one of the first things to go,” says Kim Perkins, Head of Human Capital at Ashburton Investments. “Some companies now have a skills shortage as a result. But we’ve been very fortunate – our training budget has never been hit. And that helps us attract candidates when they talk to recruitment agencies. Our basic package may be similar to others, but we’re putting people on courses and giving them study leave. That does tend to tip the balance.”

Another tactic for retention is to offer people rotation programmes. Organisations are increasingly bringing skilled people in from their own offices overseas, and sending local employees in the other direction to pick up new experiences. 

Lamy explains how one First Names employee recently bounced from Jersey to Tokyo, another from Guernsey to Hong Kong. “When the States can see we’re giving islanders experiences elsewhere that they can then bring back, they tend to be more supportive,” says Lamy. “We’re not sticking two fingers up at their population controls. We’re saying: ‘We get it, and here’s how we’re trying to support that and upskill local people’.”

Indeed, it would be unfair to roundly criticise the States for being inflexible. The governments will do what they can to accommodate and support companies’ needs, if they can demonstrate them. 

Grass roots work

But it’s not just about bringing people in from outside, or clamping on to university graduates. “The funds industry is looking for introductory courses all the time, for school leavers as well as graduates,” says Michelle Morley, Programmes Manager at GTA University Centre in Guernsey, which works with the Guernsey Investment Fund Association among others to tailor its courses to industry demands. 

“We regularly run overview courses in fund administration, and refreshers for those who’ve been working in the field five to 10 years. We cover things like taxation issues that may have changed, using the latest case studies to illustrate pitfalls.”

Targeting school leavers certainly seems a sensible idea. They’re an under-fished shoal in the existing local talent pool, and to be offered the chance to get up and running in a potentially lucrative career in funds, while their mates are still desperately ‘downing’ their student loans in the freshers’ bar, may hold a powerful appeal. 

GTA is one example of the kind of grass roots work going into enhancing the capabilities of the people already on the islands. The question is whether such measures are enough to keep feeding the funds industry machine, or whether there’s a possible employment crisis just waiting to happen. 

No one has a crystal ball when it comes to employment – note the wildly differing opinion on the potential for carnage once artificial intelligence has its full impact on the workforce. 

As such, Morley follows a sensibly non-committal course. “There’s certainly talent here that can be used,” she says. “Whether it’s enough, I don’t know.”

People will always tend to draw a potentially bleak view of the future, but many businesses on the island are taking the philosophical approach. “It’s worth being optimistic. At the end of the day, you just have to work within those constraints,” says Lamy. “You can spend a lot of time jumping up and down and complaining about decisions and obstacles, or you can just say: ‘That’s the way it is, let’s make it work’.” 

It’s also worth recognising that these questions are nothing new. “I was chatting to the owner-director of a trust business that’s been here 30 years, and they’re really growing,” says Kendrick. “Five years ago, that same person had said he didn’t know where the private wealth world would be in 10 years.”

A local careers adviser will probably encourage school leavers to picture what they’ll be doing in the same timeframe. Some may now answer: ‘Working in the funds industry’. And at least some of them will be right. That’s if AI doesn’t claim all the jobs first. 

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