Jersey finance industry is still the number one employer
The finance industry is still Jersey’s number one employer and this looks set to continue. Stephen Gibson, senior manager of AP Personnel, looks at some of the forthcoming issues that could affect recruitment in this sector.
The future of the finance industry in Jersey looks very bright, and the growth it’s seen over the past few years looks set to continue. As a consultancy, we have seen steady growth; for example, in the number of funds being set up in the island. This, in turn, has boosted the private client industry as individuals setting up large corporation funds decide to invest their own money in private trusts. Working in the recruitment market in this sector I am continually faced with the predicament of supply and demand. The numbers of skilled and available professionals in the island simply do not satisfy our clients’ requirements. This is no reflection on the talent or training of the employees already working in the industry; supply and demand is always going to be an issue in a small island such as Jersey. With future developments and political decisions affecting the industry, I envisage a knock-on effect within the employment market.
Two main issues may be of major significance with regard to recruitment in the finance sector: first, the introduction of zero-10 tax. The new corporate system of taxation is seen as an extremely positive one within the finance sector, as it brings Jersey in line with other jurisdictions like the Isle of Man; thus maintaining the island’s competitive business market infrastructure. Conversely, the benefit of ensuring Jersey’s attractiveness to the corporate world is unavoidably at the expense of the individual.
The natural gap in revenue will need to be filled by personal taxation; and this will undoubtedly affect the way in which individuals view Jersey as a place to live and work. As consultants involved in the relocation of trust professionals from one jurisdiction to another, we have always been able to market Jersey as a place to live, with the benefits of a low-tax lifestyle and a beautiful location. This has resulted in our ability to bring in skilled professionals – many with the TEP qualification, which is seen increasingly as an industry-standard benchmark for assessing expertise in the trust arena. However, with the introduction of the GST (general sales tax), which many are hailing as the local VAT, Jersey is beginning to lose its ’lifestyle’ appeal. That said, the 3% GST is hardly a fair comparison to 17.5% VAT and, whilst extra taxes to fill the revenue shortfall will continue to be a burden to island residents, as long as the charges remain nominal, Jersey will continue to attract industry professionals.
The second issue that might affect recruitment within the industry is the Regulation and Undertakings proposals to increase the employment rule from five to ten years. This issue could ultimately be of yet more concern to the finance sector as a whole. While those companies who have a general licence to employ non-locals will still be able to bring in experienced practitioners to the local workforce, the plans will limit the opportunities for individuals.
If the length of continuous residency is raised to ten years, employees will either be tied to one company for longer - their careers limited according to any progression achievable after five years in their current workplace - or be forced to compete in a much wider market for jobs in companies withgeneral licences for non-locals; thus, limiting their options for an additional five years. Given the restricted career choices and the length of uncertainty regarding their career, this could understandably affect the individual’s decision to relocate to the island in the first instance.
Whilst many structures have been put in place to ensure Jersey’s intrinsic worth as an offshore jurisdiction to the corporate world, I would suggest that any policies adversely affecting the staffing levels and appeal of the industry to employees and potential employees will, in turn, have an impact on the industry itself. I do hope that the States of Jersey keeps the status quo in this instance, and continues to allow qualified professionals to flourish throughout the finance industry.
Our team at AP Personnel will continue to keep a close eye on developments in the financial sector and - as the exclusive recruitment partner for STEP (The Society of Trust and Estate Practitioners) worldwide - the trust arena in particular. We regularly attend meetings and events to keep abreast of STEP developments, especially locally, analysing which political decisions might have an impact. Meanwhile, the finance industry continues to thrive and, whilst governmental decisions and other factors might cause concern from time to time, we are constantly striving to satisfy this very active sector.