Now finance sector being hit by high housing costs
AN OVERHEATED housing market is directly affecting the ability to attract and retain staff in the finance sector, and will have a knock-on impact on its performance, it has been claimed.
William Mason, director-general of the Guernsey Financial Services Commission, warned that without sensibly affordable housing, the island’s competitive position was at risk.
In the commission’s annual report, Mr Mason said that staffing was the biggest short-term issue faced by the sector.
He said it was fuelling wages and cost inflation, and as a result of this, business was being lost to the island, either directly or through outsourcing.
‘In the longer term, the commission is concerned that the increasing “living wage” required to persuade skilled junior and mid-level financial services staff to relocate to Guernsey may damage the ability of entrepreneurs on the island to grow businesses of substance to the extent that they would otherwise be able to do in a less tight employment and housing market,’ he said.
‘While there has been a lot of discussion about housing for teachers and medical staff, which is clearly worthwhile, we also need to have housing available for financial sector workers because on a net basis, financial sector workers tend to contribute more to tax and help to grow GDP in the economy.
‘We need to provide them with sensible, affordable housing to attract them to the island. We are in a full employment society, so it’s getting really competitive to keep staff.
‘There’s a premium on people who have already got a house.
‘You can’t afford to have workers who are more expensive than the equivalent workers elsewhere in the world, otherwise your financial services will be less competitive.
‘While that may offer comfort to some worried about overcrowding, once you lose momentum in a sector, the business can soon switch jurisdictions and the tax revenues attaching to that business – generally the high amount of income tax paid by employees in our context – shift as well.
'Thus high quality public services become markedly more expensive.’
The GFSC has had its own issues recruiting and retaining staff – staff vacancies peaked at 20% of complement in June 2022 – but has had some success in improving matters, the report indicated.
