The annual Finance Dublin Employment Survey (for End December 2010) shows that employment in the IFSC fell from its peak of 25,057 at the end of 2007 to 24,692 at end 2009, but showed overall growth in 2010 with the end December 2010 total of 24,761 showing an increase of 69 jobs net on the previous year. The figures are published as part of the annual process of updating the Finance Dublin Yearbook 2011.
The survey shows that are many green shoots throughout the IFSC, with well over 100 companies growing their jobs numbers, notably in the funds and insurance sectors.
It complements figures from the Revenue Commissioners which show aggregate profits of IFSC companies stabilising in 2010, and which indicate that the aggregate profits subject to corporation tax earned by 'traditional' IFSC companies amounted to €5,006.4 billion in 2010
The sector most affected by the credit crunch - banking and credit related businesses - show that the process of international deleveraging is continuing to be seen in the IFSC. Nevertheless even the Banking Finance & Treasury sectors show expansion in some areas, for example in credit management activities, international banking and financial shared services with the stalwart of the sector, Whirlpool, doing well, and new ventures, such as Eli Lilly.
The recovery in employment underlines the contrast in the experiences of the international and domestic financial services sectors. Latest figures published by the Revenue of 'old IFSC' companies (Department of Finance IFSC certificated companies) show the Corporation Tax contribution in 2010 €625.8 million pointing to profits of over €5 billion from those companies in 2010.
Risk management, and asset management sectors such as investment funds, asset management, and insurance, including the significant international life and reinsurance sectors in Ireland are showing solid growth by the same token. There is not a great degree of evidence that there is a major falloff in business due to the sovereign credit rating downgrade, despite worries such as questions raised, for example by pension regulators, such as Chile's - since allayed - regarding Irish domiciled funds.
Also being overcome are fears - for example a loss of confidence by overseas boards in the fiscal guarantee relating to the 12.5 p.c. corporation tax rate (and, in particular fears concerning the introduction of a CCCTB), or excessive 'gold plating' in imposing an overly ambitious regulatory financial regulatory regime that does not match in flexibility and quality that offered in other jurisdictions, such as Switzerland.
Against this, the has been widespread evidence across the entire IFSC of green shoots, for, matching job cuts in the 'deleveraging' sectors, there are expansions in evidence across all sectors, including credit management, international banking, funds, reinsurance and international life.
There is also evidence of, if not 'jobless' growth, a trend towards increased productivity jobs. Examples are boutque type operations in funds and fund administration, for example, Avoca Capital, Centaur, Quintillion, Apex, and, in aviation finance, in a number of companies, including new start up Avolon, as well as in more technically focused activities in the large employing entities such as State Street, Citi, and BNY Mellon.
Against this, there is expansion in less highly paid sectors, such as financial shared services, with entities such as the stalwart of the sector Whirlpool, doing well, and new ventures, such as Eli Lilly.
Life insurance also shows up well, with firms such as Darta Saving, Irish Life International, and Hartford performing strongly.
About the survey
The annual Finance Dublin Employment Survey is the only employment survey of IFSC companies. This is the eighth year it has been conducted (see the figures for each previous year in the table on this page). The Survey covers Irish international financial services (IFSC) companies – i.e businesses engaging primarily in cross border financial services. What constitutes an ‘IFSC company’, the basis of a firm’s inclusion as an IFSC company in the Finance Dublin Yearbook 2011, is explained in the annual publication.
The definitions of financial services used in the survey and the Yearbook are determined by reference to the internationally used industry classification system - the United States SIC (NAICS). SIC and SITC classifications are the basis for the compilation of industry sectoral data by central statistics and customs bodies worldwide, and are the basis for the classification of international trade statistics.
Not included as ‘IFSC employment’ in the survey is service provision by legal, accounting and consulting firms whose business is indubitably linked with, and indeed an essential part of the IFSC international offering. Neither are those elements of the public sector also servicing IFS activity, such as IDA Ireland.
The annual employment census of IFSC companies carried out by Finance Dublin since 2003 (see table) shows that while overall levels of employment remains solid, there are substantial changes happening under the surface, with significant change underway in the composition of the IFSC. Many factors are evident in the figures, such as the continued success of emerging Irish niche boutique businesses, and the role of consolidation in the funds and insurance sectors for example. But the overall big picture still holds - the major trend for global financial services to deleverage is seeing the credit related sector contracting in the IFSC, mirroring in direction, if not in scale of adjustment the restructuring in the domestic banking sector.