Luxembourg radiates its financial expertise throughout the world. Its political, economic, and fiscal stability have helped the country to rank among the top 10 financial centres of the world and the most important fund centre in Europe. A big and growing part of Luxembourg’s success is the private equity market, one that relies on an ecosystem of companies like Value Partners that provide accounting, consolidation, tax, fund administration, regulatory and corporate services.
big and growing part of Luxembourg’s success is the private equity market
From the perspective of the skilled European workforce looking to join this ecosystem, Luxembourg is an attractive place to live and work, offering competitive salaries, professional development, and of course, a fine quality of life. Despite these obvious draws, there is a shortage of skilled workers in Luxembourg to fill all the openings in the services sector, as many HR heads could confirm, resulting in what some call a war for talent. Many service providers now suffer from high turnover as employees find they are able to easily hop from one firm to another, oftentimes with a pay increase. While this might sound agreeable to some, for the clients of service providers, the constant rotation of new faces can be both a source of great frustration and dissatisfaction, leading to poor service quality and the feeling that a service provider does not really know your business.
Interestingly, the overall stability and allure of Luxembourg further increases instability among large service providers to the private equity market, and it lessens the quality. With high staff turnover, client-specific knowledge quickly evaporates, and because processes are increasingly standardised, being able to find a provider that can offer both a tailor-made approach and develop long-term familiarity proves increasingly difficult.
While the country has made efforts to make relocating to Luxembourg more attractive, more work needs to be done. The work-life balance leaves much to be desired, and because the cost of renting or buying property is high, many people choose to commute from neighbouring countries, which further hampers their quality of life. In this context, sometimes small or medium-sized service providers – those who keep something of a startup ethos – may stand out, thanks in particular to their focus on retaining talent and lower turnover which lead to more personal relationships with clients.
Obviously there is no one answer for how to keep people happy and on board, but one vital element is to keep your company’s growth manageable. This way, as a service provider, you will be able to truly deliver on promises you make to your clients, and you avoid having team members feel overworked. Also, it is important to grant your people flexibility in organising their work lives. Post-pandemic, this seems obvious, but even prior to Covid, we were facilitating teleworking and allowing every employee to transition to a part-time contract, that is to say, working 80 percent of the time, if they so desired.
The goal for any service provider should be to build solid, long-term relationships.
Everyone who has ever held a long-term relationship with a service provider knows how frustrating it can be when you have to deal with new people all the time. When a service provider loses staff, they do not just lose a person. They lose knowledge about their clients’ businesses as well as the relationships and familiarity that the employee has built with clients over the months and years. For clients, having to frequently get acquainted with new people leads to lost time, resources, trust, and ultimately money.
The goal for any service provider should be to build solid, long-term relationships. When we started out 10 years ago, we had one major client, and today, that client is working with the same Value Partners team. The same goes for our second and third major clients. We serve a number of the major private equity players, and they all have all had the same team on a permanent basis, some for almost 10 years. This level of familiarity is what most clients yearn for, and it allows us to really work within their processes, oftentimes at their premises.
Even when you are not embedded with a client, the goal should be to seamlessly integrate with their workflow, to adapt to them and not ask them to adapt to you. A vital part of this, of course, is keeping talent in your company, those who know every detail of a client’s business.
We are celebrating 10 years of service in Luxembourg, and while our staff turnover rates are low, we know we can always do more to keep experienced, high-quality team members with us. Still, we feel we have identified many key elements in keeping people happy. Because of that, for our recruitment, we almost never use headhunters. Instead, we have always found people organically – or they have found us – through word of mouth.