As we head into the close of 2024, it is evident that while Guernsey continues to thrive economically, it also faces several challenges that could shape its labour landscape in the years to come. The Channel Island's population continues to remain steady, primarily due to net migration. An increase in numbers of essential workers into the island is a testament to Guernsey's economic appeal, particularly within the finance, IT, and commercial sectors, which continue to remain the bedrock of the island's employment base. However, the recruitment market is not without its challenges, and it’s clear that employers must adapt to an increasingly competitive and dynamic environment.
Guernsey’s finance industry remains one of the largest employers on the island, attracting professionals from across the globe. Yet, despite its continued growth, recruitment within finance is far from straightforward. Companies are struggling to fill specialised roles, with the pool of qualified candidates remaining limited. This challenge isn’t exclusive to finance but spans across sectors, due to the island’s small population.
The reality is that while Guernsey offers a wealth of opportunities, there simply are not enough skilled professionals locally to meet the demand. This talent shortage is compounded by the increased opportunities for job seekers to consider living in other global locations which may offer less cost of living and lower taxes. Incentives being offered like this coupled with some offshore locations having warmer climates can make relocation to Guernsey less attractive for potential candidates. In this current competitive job market, businesses are finding it increasingly difficult to compete for top-tier talent, and the need to attract international professionals has never been more noticeable. It has been noticeable the number of companies still offering hybrid opportunities or opting to open offices in locations where salaries are much lower but still offer good qualified local talent. Mauritius is an example of this; however, it is now experiencing the same bun fight for staff as Guernsey employers are and salaries in this island are also becoming competitive.
While finance may still reign supreme, other sectors such as IT and commercial services are also playing a crucial role in Guernsey’s economic development. The demand for IT professionals, especially those with expertise in digital transformation, cybersecurity, and data management, AI continues to grow. The island’s businesses are investing heavily in technology, with the expectation that tech talent will be a key enabler of future growth.
Similarly, the commercial sector, which encompasses a wide range of industries, is seeing both growth and decline in different areas. Retail and hospitality, for example, have struggled with falling employment numbers, while sectors like construction and professional services have experienced notable gains. This variance highlights the importance of diversifying the local economy to ensure resilience and long-term prosperity.
Perhaps the most surprising development in Guernsey’s employment market is the rise of the public sector as the largest employer on the island. In recent years, the public sector has overtaken finance as the primary source of employment, accounting for 17.8% of all jobs on the island. While this shift reflects the increased demand for public services, it also raises important questions about the sustainability of this trend and the impact it could have on the island’s economic structure.
It is critical that Guernsey's government and private sector work in tandem to ensure that the economy does not become overly reliant on the public sector, especially given the pressures on housing and infrastructure brought on by rapid population growth.
One of the most significant challenges facing Guernsey in 2024 has been the tightness of the labour market. Unemployment is at a record low of just 0.8%, which in many respects is a positive indicator of the island’s economic health. However, it also presents difficulties for businesses, who are finding it increasingly hard to recruit for a range of roles. The recruitment bottleneck is further exacerbated by a declining labour participation rate. Despite the increase in employment, the proportion of the working-age population engaged in the labour force has fallen slightly, a trend that will need to be addressed if Guernsey is to continue growing its economy.
Inflation continues to erode real earnings, with a slight decrease in salary growth over the past year. Although employment levels have increased, real income growth has not kept pace with rising living costs, which poses a challenge for both employers and employees alike.
Employers, particularly in the finance and IT sectors, must adapt their recruitment strategies by using the services of a global recruitment agency to attract international talent and mitigate the effects of a small local workforce. Meanwhile, the island’s infrastructure, housing, travel connections and public services will need strategic investment to keep pace with population growth.
Guernsey's economic future will depend on its ability to balance growth across sectors, foster a dynamic workforce, and ensure that the island remains an attractive destination for skilled professionals. For AP Group, global recruitment and payroll specialists, it is clear that the market is in a period of transition, and only those who can navigate these complexities will thrive.
As we move forward into 2025, Guernsey’s employers and policymakers must be prepared to face the challenges of a rapidly changing labour market, ensuring that both businesses and employees can remain competitive to flourish in the years to come.
