'Outsourced jobs won't return'

FRIDAY, OCT. 5: So far Bermuda’s unemployment rate is similar to Cayman’s at about six per cent, according to official statistics. But like in Cayman, there is doubt whether the official statistics give a true reflection of the extent of unemployment. In addition it is an election year in both countries and the pressure on government to find jobs for voters is higher than ever.

Some of the job losses are due to the recession, while others are the result of outsourcing.

“Over the past 10 years there has been a steady trickle of job losses due to outsourcing,” notes Doug Soares, CEO of Expertise, an HR consultancy. “The main driver has been the advance of technology and the decline in the price of connectivity. So Bermuda has seen a steady decline of clerical and processing jobs as well as IT professionals that develop and support systems,” he explains.

“Fortunately, for Bermuda, offsetting this trend during the period 2001 to 2008 was very strong growth in knowledge jobs, particularly in the insurance and reinsurance sector. Since the recession began in Bermuda in 2009, job losses due to outsourcing have picked up a little but it is not the main reason for the sharp decline in the total workforce. The recession has claimed hundreds of jobs particularly in construction and retail.” These retail and construction jobs will be created again, once the economy begins to grow, he says. “But jobs that go due to outsourcing will not return.”

The Chamber’s Ronnie Viera agrees, saying that outsourcing is a fact of life in a connected world. “It is difficult to measure, but outsourcing now pervades nearly every business on the island. However, it is critical that the local economy benefits from companies operating in Bermuda so there is adequate employment for Bermudians and support for local businesses.”

Bermuda College’s Craig Simmons in turn believes that as long as the high value-added functions remain, the adverse effects of outsourcing can be minimised.

Work permit moratorium

In dealing with unemployment some have argued that work permit policies should be made more restrictive until all Bermudians have found a job again. Chris Furbert, president of the BIU trade union, demanded in December 2011 all work permits should be put on hold until Bermudians are seen fit to get a fair share in the workplace. “And once that has been done, then and only then, should we reopen any work permits for any migrant workers.”

The government previously appeared to be partial to this kind of thinking, having imposed a work permit moratorium for landscape gardeners, cleaners, kitchen porters and bar porters. Why such a moratorium was needed if the work permit system, which already gives preference to Bermudians over non-Bermudians, was truly functioning, is not clear.

“When existing workers in these work categories were told to leave the island earlier this year, business owners in the hospitality industry “had some very candid and frank conversations with our minister in regards to that”, says Phil Barnett, owner of Island Restaurant Group.

He adds that he cannot pick up his business and go to another country or domicile. Instead hospitality industry business owners have to communicate clearly what they need to be successful.

“Obviously the most important thing is making sure that our Bermudians are employed but we have a world standard to uphold and we have to make sure that everybody who enters our industry understands that goal,” he says.

“Through some very close work with the Ministry of Labour and the minister we have made some great inroads and we feel that we are on the right track to make sure that we stay competitive as well as giving the best possible and preferential opportunities to Bermudians that want to be in this industry.”

Simmons says one challenge facing the island is the absorption of Bermudians into the export sectors. With almost two-thirds of the local population possessing no more than a secondary education, many locals are limited to clerical jobs with international business and those who possess college or university education compete for a limited number of entry-level positions. 

Hospitality

Meanwhile, jobs in the hospitality sector don’t have the same status or income as those in IB. As a result, there has been an exodus of locals from the hospitality sector into construction and retail, Simmons says. “The preponderance of non-Bermudians in the hospitality has done nothing to revive the ailing sector,” he says. “The recession may attract young Bermudians back into the industry, but if the Bermuda brand is to develop into something special, the new recruits will have to resist the lure of IB when it recovers.”

Barnett believes this is already happening. “We have become more Bermudianised in the last three years, which is not necessarily a bad thing.” He says importing labour has a lot of disadvantages and risks, which are mitigated when hiring Bermudians. “You don’t have the ability to interview people in person and so you take people on a wing and a prayer and assess how they are going to fit. Then there are work permit costs and housing and the settling in period. Let’s be honest it is difficult to move to a completely different country. And with hiring Bermudians you obviously mitigate a lot of those risks.”

Although he agrees that there is a degree of entitlement with some Bermudians, he says, there are many Bermudians who are passionate about being the very best. “I know there are a lot of my fellow employees and team members that share that passion and it is about finding those individuals, who will also end up giving a positive role model for Bermudians to see, [for them] to understand that it is okay to be in the hospitality industry. It is a respectful job.” Barnett says some Bermudians are understanding now that “a consistent job is better than no job at all”.

Michael Klein is a photojournalist with the Cayman Free Press and this article was printed with his permission. This is part 2 of a multi-part series.