2023 Outlook: Navigating the Uncertainties of the Luxembourg Job Market
02 février 2023
As we move into 2023, the job market in Luxembourg continues to be strong, with a lot of activity and vacancies in the Financial Services and Legal sectors. However, with the ongoing impact of regulation and governance and concerns about a potential recession and inflation, it’s important to be aware of the shifting trends and potential challenges that may arise in the coming year.
In this article, we’ll look closely at the predictions for the Luxembourg job market in 2023, focusing on the key industries and roles that are likely to see the most hiring activity.
Financial Services Industry
The Financial Services industry in Luxembourg is still very much dominated by regulation and governance, so we expect to see a lot of hiring activity in this area in 2023. Specifically, we anticipate that our clients will be looking to attract compliance, risk, legal, and corporate secretarial staff, as these are the roles we see the most demand.
This is partly due to the increased scrutiny and regulations put in place by the CSSF, the financial regulatory body in Luxembourg. Companies are constantly on the lookout for competent staff to meet these regulations and ensure they are compliant. This is particularly true for AML/KYC officers, where we see the biggest increases in salary since last year.
Strategic Recruitment Decisions
With concerns about a potential recession and inflation, we expect that employers will be making strategic decisions about where they recruit each role. For example, if an accountant can be hired in London or Luxembourg, employers will need to consider which location makes the most sense for their business. This could have a significant impact on the job market, as certain roles and industries may be more affected than others.
However, it’s key to note that this is a very speculative scenario, and there are many factors that could influence the job market in 2023. Nevertheless, it’s important for employers and job seekers to be aware of the potential impact of a global recession and to be mindful of the long-term implications of taking a job solely for a higher salary.
Instead, it’s crucial to consider the medium-long term opportunities that a job can offer, and to think about how it will look on your CV.
Impact of Increasing Interest Rates
As interest rates continue to rise, we anticipate that this will have an impact on the Real Estate and Private Equity sectors. Higher costs of doing deals may limit the amount of work and therefore the need for growth in 2023. This could lead to a slowdown in hiring activity in these areas, as employers look to keep costs under control
Whilst Real Estate might slow, this will lead to growth in the debt area. We are actively working several investment managers who are very active on the debt side whilst their Real Estate ambitions have slowed.
Staff Turnover and Increasing Regulation
The Financial Services industry in Luxembourg is heavily regulated, which means that staff turnover and increasing regulation will be major reasons for hiring in 2023.
While we’re still seeing some new Asset Management firms opening in Luxembourg, the number of new firms has significantly dropped in recent years following Brexit.
Second Half of the Year
In the second half of the year, we may see fewer vacancies and therefore the advantages that candidates are currently enjoying with an abundance of jobs and few candidates, will diminish. This could lead to more competition for roles and potentially make it harder for job seekers to find employment.
If a global recession does occur, it’s possible that we could see a repeat of what happened in 2009. During the years leading up to the recession, recruitment consultants were kept very busy recruiting Transfer Agents mainly. Due to the high demand and lack of candidates, we saw candidates moving very often for larger salaries.
However, when the recession hit, many companies were forced to carefully look at their costs and outsource these roles to India, Eastern Europe etc where the same job could be done for a fraction of the cost. This meant there was a large of number of people actively looking for jobs in Transfer Agency with high salary expectations but the number of vacancies in this area was significantly less.
While governance and oversight roles will have to stay in Luxembourg, the accounting and administration might well be reviewed and similar questions and conclusions might be drawn as in 2008/2009. It’s important to be aware of this possibility and learn from past experiences.
Overall, the job market in Luxembourg is expected to remain strong in 2023, with a lot of activity and vacancies in the Financial Services and Legal sectors. However, with concerns about a potential recession and inflation, as well as the ongoing impact of regulation and governance, employers and job seekers will need to navigate a number of uncertainties in the coming year.
It’s important for job seekers to be aware of the potential impact of a global recession, and to be mindful of the long-term implications of taking a job solely for a higher salary. Instead, it’s crucial to consider the medium-long term opportunities that a job can offer, and to think about how it will look on your CV.
For employers, it’s essential to stay abreast of the latest regulations and trends, and to make strategic decisions about where to recruit each role in order to keep costs under control.
In short, 2023 promises to be an exciting year for the Luxembourg job market, with a lot of opportunities for those who are aware of the shifting trends and are able to adapt accordingly. Whatever happens, we wish you a happy and healthy year!
Article written by Richard Neale, Director of Redbridge Recruitment