Recruiting and retaining key workers in developed financial centres may present a challenge, but there are strategies which can help
Working in developed financial centres can bring significant talent management challenges for financial services firms and associated supporting industries. For many years, the solution has been to relocate people from the UK or other parts of the world, offering attractive packages to persuade them to move.
But relocating staff is not an easy option, as competition for such talent is fierce, especially at a senior level, says Tim Muzio, lead consultant in the financial services practice at Odgers Interim. “The roles themselves are a main driver and businesses need to look at their unique selling points when it comes to attracting people to relocate,” he says. “This might be the level of responsibility they’re going to be given or the opportunity to step into a more senior role.”
International talent management: what to consider
There are also significant variations around employment rules with which human resources departments need to get to grips. “One might assume that international financial centres like Switzerland and Luxembourg are very similar in their approaches to talent management, but there are more than a few significant differences,” says Rick Hammell, chief executive of Elements Global Services. “For example, Luxembourg enforces a maximum 40-hour working week, while employees in Switzerland can work up to 50 hours.”
Brexit may also have an impact on particular locations. “Luxembourg, like the UK, is a member of the European Economic Area, so a British citizen will be able to live and work in any other EEA country without the need for a work permit,” Hesham Shoeb, associate at law firm Barlow Robbins, points out. “But this position may change after the difficulties in reaching other places
Relocating staff is not an easy option, as competition for such talent is fierce, especially at a senior level
Beyond the job itself, there are a number of other talent management factors to consider. Islands such as Jersey and Guernsey are not always ideal locations for families, due to the difficulties in reaching other places, says Joanne Danehl, global director, intercultural, language and partner support services at Crown World Mobility. While the Cayman Islands have a high cost of living and no social healthcare system, alongside its attractive tax environment.
“From a talent management perspective, it becomes all the more important to provide intercultural training to help employees and families integrate,” says Ms Danehl. “Basically, when the bubble inevitably bursts and real life sets in, how will the assignees cope?”
Tempting nearby talent across the border
Technology firm Luxoft moved its headquarters to Switzerland five years ago and has since relocated employees from 15 different countries, mainly in the EU, to its base in Zug. “Relocated employees can easily rent or buy real estate in Switzerland,” says Dmitry Kushnir, head of global delivery locations. “The only limitation for buying is a need to get permission to buy a house or apartment. The high price for renting or buying is also occasionally a challenge, but is usually reflected in higher wages.”
In some locations, such as Switzerland and Luxembourg, bringing in staff based in nearby France or Germany may be an option. “There are large numbers of ‘frontaliers’ who travel to work from France and Germany, where it is cheaper to live,” says Michelle Reilly, chief executive of 6CATS International. “Both Switzerland and Luxembourg use multiple languages and, while this is arguably a candidate attraction tool due to the ease of living in the region if they speak one of the local languages, it can also create a lack of identity.”
International talent options besides relocation
There are other talent management options for businesses beyond relocating employees, though. Partnering with local universities or colleges to hire graduates and training them up can help develop staff at a junior level, says Mr Muzio, and this can be complemented by attracting recent retirees to help transfer knowledge to younger workers. “This is a cost-effective method of imparting skills and knowledge to your workforce, and also means the returnees have the opportunity to re-engage with their old employer,” he says.
Some technology firms are even looking to develop school-leavers and apprentices; a model financial services firms could look to replicate, says Ben Kimpton, managing consultant at TritonExec. “Those organisations from different sectors that decide not to react or invest in tomorrow’s talent requirements run the risk of stagnating due to employing a legacy workforce,” he warns.
Making better use of existing talent is another option, says David Cartwright, founder of the OBD Academy, by investing in training and development, and drawing on often-overlooked groups. “The focus and energy expended on recruiting new people is akin to the excitement of ‘cradling in’ new customers at a time when your existing customer base lies underdeveloped,” he says.
“How diverse is the investment in learning and development in targeting and retaining older employees, people in more specialised disciplines or mothers returning to work after maternity leave? Are people being supported with the most appropriate development opportunity for them and the business?”
Talent management tools: tech and consultants
Technology is also helping financial services to overcome the challenge of attracting young talent in particular to developed financial centres, says Marcus Downing, senior client partner at Korn Ferry. “Adopting a more flexible approach to working saves organisations the cost of relocating and is important in displaying the kind of dynamism that attracts younger employees,” he says. “Larger organisations cannot transform overnight, so we’re seeing a trend towards digital hubs, whereby they ring-fence a part of the business to act as a testbed and propagator of the agile methodologies so important for attracting young talent.”
Making use of consultants can also help plug talent gaps, at least on a short-term or project basis. “For financial services firms in island jurisdictions or locations such as Liechtenstein with a lot of red tape, it can be a flexible way to quickly access expert skills for one-off pieces of work,” says Murray Priestman, founder and principal of Priestman Associates. “Many clients, particularly in financial services, make the mistake of employing permanent staff with expensive niche skills that they use infrequently. With the growing gig economy, it is often far more efficient to bring in ad-hoc consultancy resource for work when needed.”