By Scott Neil
Bermudians could face job losses as a result of a previously unheralded and unintentional side effect of Bermuda´s six-year work permit policy.
Business leader David Ezekiel, chairman of the Association of Bermuda International Companies, has seen evidence of Bermuda-based international companies outsourcing jobs overseas because of difficulties associated with hiring ex-pats on limited work terms.
It now appears that a further knock-on effect directly affects Bermudians and their place in the workforce. As companies increasingly seek to outsource overseas jobs that have previously been filled by ex-pat emplyees on work permits in Bermuda, they will end up taking jobs such as cashier and processing overseas as well because of the logical economics in doing so.
“Industry jobs that would be filled by locals will be exported in the future,” Mr. Ezekiel bluntly warned as he spoke about a trend he has identified.
And Bradley Kading, president of the Association of Bermuda Insurers and Reinsurers (ABIR), agrees that anything that anything that deters companies from having important operational functions in Bermuda detracts from the sizeable economic benefit they bring to the country.
In an interview with the Bermuda Insurance Institute´s journal Bermuda Insurance Update Mr. Ezekiel, who is president of the Island´s largest captive management firm International Advisory Services, said his own company was looking to outsource work because of the difficulties associated with constantly needing to put new staff in place as work permits expire.
He said the new policy, which came into effect in April this year as the first of the six-year permits expired, has seen a number of attractive approaches for Bermuda companies to outsource in places such as the Canadian east coast.
In the interview, Mr. Ezekiel said he would like Government to revisit the work term policy in order to protect Bermudian jobs.
“Once you allow that outsourcing train to leave the station it will be difficult to get it back. The changes will start with the outsourcing of the work permit jobs, but once that pipeline is in place, the cashier jobs and processing jobs will go too,” he said.
“We at IAS are looking at outsourcing right now, because we have no choice. We are not the only ones. Everyone is. This never entered our thinking years ago, but the constant difficulties in putting new staff on the books has forced us to look at alternatives.
“Maintaining our costs to benefit the clients is one thing, but failing to generate jobs for Bermudians is not ideal and the new rules bring a burdensome level of bureaucracy. It also makes it difficult, especially in the professional insurance community, to attract the high quality of talent that the industry requires.
“Not unexpectedly, other domiciles are trying to use this policy against us, making the situation out to be even more dire than it is.”
ABIR president Mr. Kading said: “Bermuda´s chief benefits from our global international insurance carriers are the job opportunities for Bermudians, the dynamic contribution to the tourism economy from the business and convention travelers and the great tax base.
“These benefits flow from having the top decision makers for the companies located here. Anything that deters companies from having important operational functions here detracts from that economic benefit to the country.”
Sixty-three percent of the employees of ABIR are Bermudian and the association´s members contribute an estimated 40 percent of Government´s revenue each year.
