Luxembourg’s competitiveness among the major international financial centres remains a hot topic. Players in the financial centre players have been sounding the alarm in the face of growing difficulties in recruiting new talent.
The end of tax immunity for cross-border commuters from 1 July could have been a blow to the attractiveness of Luxembourg in the eyes of workers. Even if they live in the Greater Region, some of them now prefer to sign contracts with employers based in other capitals, such as Paris, where four days of teleworking per week is becoming common practice in the financial sector.
If the employer brand of financial sector professionals loses its strength due to the declining attractiveness of Luxembourg, several representatives of the financial sector fear an exodus of its stakeholders to other jurisdictions, taking with them clients and assets under management. In addition to this exodus, the fear is that new entrants to the Luxembourg financial centre will halt. This is a considerable loss for the country, both in terms of tax revenue and economic growth.
A record in two and a half years
However, beyond the fears, there are the figures. And according to statistics published by the Luxembourg Financial Sector Supervisory Commission (CSSF) this week, the number of people employed by regulated financial entities has been increasing.
In the second quarter of this year, there were 50,811 jobs in the sector, compared with 49,290 in the same period in 2019.
At the start of the covid-19 pandemic, the financial sector showed an increase of 1,453 jobs to a record 50,098 positions in the first quarter of 2020. This was a growth of almost 3% compared to the figure for the last quarter of 2019.
While the second quarter of 2020 saw a drop of 1,114 jobs, or a loss of -2.36%, compared to the first quarter of the same year, the number of new jobs has been rising ever since. In June 2022, the industry had even surpassed its pre-pandemic level and reached a record high in the space of two and a half years.
In the second quarter of this year, for example, the number of jobs rose by 1.8% year-on-year.
As employment figures in supervised entities are published on a quarterly basis by the CSSF, we will have to wait until next September to see if the fears relating to a loss of attractiveness of employers in the financial sector materialise.
The entities subject to the supervision of the CSSF are only part of the Luxembourg financial sector, alongside all the players in non-regulated financial activities, such as specialised lawyers and audit and consultancy firms.
Originally published in French by Paperjam and translated for Delano