Bankers With Broken English Are Luxembourg Brexit Bottleneck
(Bloomberg) -- Luxembourg’s citizens can quickly impress with their language skills, switching with ease between their local tongue and German, French and English.
But insurers, investment firms and banks hoping to open post-Brexit outposts in one of the European Union’s most important financial hubs may be in for a surprise.
Head hunters say there simply aren’t enough candidates in and around the minuscule nation of 600,000 people with the excellent English needed to fill the expected 3,000 jobs triggered by the U.K.’s withdrawal from the EU. One problem, they say, is that due to its size, Luxembourg has traditionally drawn many of its finance workers from neighboring France and Belgium -- and they speak far better French than English.
“Something we have seen since Brexit is that with some clients -- like one large asset manager we’re dealing with -- we’re having terrible difficulties,” said Christopher Purdy, managing director at search and selection firm Greenfield Luxembourg. They demand “better or perfect English, as opposed to just fluent English. There aren’t a thousand people like that, are there?”
Nation of Choice
Luxembourg is becoming the nation of choice for a growing number of insurers, funds and banks relocating from the U.K. due to Brexit. Insurance giant American International Group Inc., U.S. insurer FM Global, RSA Insurance Group Plc and Lloyd’s of London insurer Hiscox Plc, as well as private-equity firm Blackstone and asset managers such as M&G Investments, were among the first to choose the country, which borders Belgium, France and Germany, as their new EU hub. JPMorgan Chase & Co. also plans to move over some London-based bankers.
While the country’s tiny capital, Luxembourg City, may not rank as high as London or Paris on the fame scale, employment figures tell a story of success. But with English rapidly becoming the finance sector’s key language, recruiters are starting to stumble over the nation’s traditionally more francophone outlook.
Finding the right mix of needed skills, plus fluent English, gets especially tricky when the majority of new recruits come from the region around the country, which is mainly French-speaking. A workforce of 412,347 people last year consisted of just under 111,000 Luxembourgers and 186,649 people from the three border nations, mostly from France, according to statistical office Statec.
Recruitment agencies have in the past attracted a lot of graduates from France with four to five years of experience, who couldn’t find a role at their level in their own nation. With economies picking up across Europe, this has changed as people find more jobs at home too.
“When we recruit in France it’s difficult,” said Jean-Francois Marliere, a founding partner of Marliere & Gerstlauer Executive Search in Luxembourg. “We were recruiting in Paris for a wealth estate-planner post here and found people who were extremely qualified, but their English was unfortunately basically non-existent.”
While Luxembourg has a long tradition in private banking, it’s diversified to become the world’s leading fund industry after the U.S., and has even attracted companies looking to invest in so-called space mining -- the potential exploitation of minerals found in asteroids and other celestial bodies.
A boom in the private equity real estate market has made finding new assignments easier for headhunters, but they are facing difficulties closing deals “because the candidates we are looking for are, quite frankly, difficult to find,” Marliere said.
“We are no longer in the back office jobs, but in far more technological and technical positions that demand a much higher level of schooling and experience,” said Marliere.
A lot of employers haven’t yet seen the job market challenges as they’re only starting to set up structures ahead of Brexit, said Alexis Yaghi, country manager at Vialegis Luxembourg.
The dearth of local staff means that headhunters are looking to lure qualified staff -- with an excellent command of the Queen’s English -- from further afield.
Gwladys Costant, partner at GoToFreedom recruitment agency says these days one third of their candidates come from across Europe, increasingly from Eastern European countries, which “are very attractive now, especially for finance or tax positions.”
Aside from pay, that means the Grand Duchy has to work hard to sell a country that has a reputation as a traffic-choked backwater. The financial lobbying group Luxembourg for Finance is planing a new talent campaign, to show what the country has to offer.
“We’re not pretending to be Paris or Amsterdam,” said the agency’s chief executive officer, Nicolas Mackel. Luxembourg has “other advantages and we want to show and point those out.”
©2018 Bloomberg L.P.