The seven-year term limit policy does not appear to be hindering recruitment of expatriate personnel in the finance industry.
Some Caymanian business owners feared the term limit, or rollover policy, would make it more difficult to recruit talent from overseas. But while recruitment here is now more difficult because of other factors like the global labour shortage and the weakened US dollar, companies in the finance industry aren’t seeing the rollover policy as a detriment to overseas recruiting.
Part of the reason is that many expatriates in the finance industry don’t intend to stay here as long as seven years anyway, something Global Captive Management Ltd. Chairman and CEO Peter Mackay has noticed.
‘It is qualified accountants that we recruit as account executives,’ he said. ‘Most don’t know about the rollover, or if they do, don’t consider it as they are only looking to come down for a few years.
‘Only if they like the island and then want to stay do they focus on the rollover policy.’
PricewaterhouseCoopers Managing Partner Nick Freeland responded similarly.
‘As we almost exclusively recruit at the newly qualified account level, the rollover policy has not had any real effect,’ he said. ‘Our recruitment efforts are driven by the global supply/demand of accountants.’
Brett Hill, president and CEO of Fidelity (Cayman) said his company has seen no difference in the age or qualifications of recruits, or the time it has taken to recruit expatriates.
‘Fidelity does not have a large expatriate staff and we have not experienced any problems either retaining or recruiting expatriate staff,’ Mr. Hill said. ‘We have only had difficulty filling one of our available positions, but this has more to do with finding an individual with the appropriate qualifications and experience.’
Having mostly Caymanian staff members has helped other companies deal with the effects of the rollover policy. Scotiabank Managing Director Freddy Sulliman said only about 10 per cent of his organisation’s staff is expatriate.
‘We have had no issues [with the rollover policy], in a nutshell,’ he said. ‘We try to hire Caymanians whenever possible.’
Although the rollover policy isn’t affecting recruitment, there are increasing concerns about the long-term retention of those recruited, and the rollover policy plays a role in that.
‘It’s more difficult to retain staff at the manager level and beyond,’ reported PwC’s Mr. Freeland. ‘The retention issue is a combination of lots of matters including the rollover policy, the high cost of living, family issues, and the uncertainty in the property market, which is partly caused by the rollover policy.’
Mr. Mackay also is concerned about the possible effects of the rollover policy on the retention of key staff members.
‘The major problem we have in our industry is that we are very specialised and not too many people are in our industry,’ he said. ‘It takes some time to fully understand what we do and have the knowledge to advise our clients.
‘Retaining staff is critical, so it will be interesting to see what our other staff members on work permits do and if key employee status will be given to them or if they will leave and take their knowledge to a competing jurisdiction.’
Mr. Mackay doesn’t believe people who are turned down for key employee status will even stay their full seven years.
‘I believe they will leave before then on their own time.’
Unlike some of the law firms and accounting firms that have offices in other jurisdictions, Global Captive Management only has offices in Cayman, making it even more critical the company gets key employee status for some of its employees.
‘We can’t move staff to other jurisdictions and then move them back after one year,’ said Mr. Mackay.
So far, all of PwC’s applications for key employees have either been granted or are still pending, Mr. Freeland said. However, whether those key employees get permanent residence is another matter.
‘As far as I am aware, all employees who were eligible to apply for PR have done so but none to date have been advised of the outcome of their applications,’ said Mr. Freeland.
Eduardo D’Angelo Silva, the managing director of Sul American International Bank (Cayman) Ltd. and former president of the Cayman Islands Bankers Association thinks a simpler permanent residence process could be beneficial.
‘The perspective of obtaining permanent residence under clear rules might cause expatriate workers to be more inclined to invest in long term ties with the country, keeping more of their money locally,’ he said.
One managing director of a financial institution who preferred not to be named thought the whole issue of the rollover policy would be better administered by the permanent residence application procedure only.
‘Why should I have to designate key employees?’ he asked. ‘That’s a function of Immigration. Why not just let everyone who wants to apply for permanent residence under the point system after eight years? Either they have enough points or they don’t.’
Mr. D’Angelo Silva said he has heard both positive and negative comments about the effects of the rollover policy.
‘My personal view is that, across the whole economy, the effect will be neutral,’ he said. ‘There might be areas of the economy where the rotation of employees will cause certain problems, and there might be areas where the rotation already happens in shorter periods than seven years.
‘In general, I believe that the policy and the other provisions of the Immigration Law, if applied equitably and consistently, will not be largely detrimental to the economy.’