People and culture trends follow industry trends closely, as businesses react and change with market flows. This is why performance will be key to success in 2025.
2024 saw pockets of activity following growth in nascent areas like data, technology, and credit. Outside of this, the job market was quite sluggish. In the funds sector, relatively few companies grew significantly in Luxembourg, no doubt feeling the weight of being a cost-centre for managers, at a time when investment activity was limited, and ETFs seemed to be winning the day.
Reduced opportunities
Reduced opportunities added to an increasing feeling of insecurity among the working population. As automatic indexations slowed, regular pay rises did as well, and the working population came to realise that the post-Covid boom time was over.
Risk-aware market
Luxembourg, which has one of the most risk-averse working populations I have experienced throughout Europe and Asia, became even more risk aware. Candidates were hesitating to come forward despite good roles being available, putting off the risk of starting a new probation period. Employers took an average of twice as long to make hiring decisions. This is slowly improving now, but the effects of last year are still apparent.
All of this meant that employees decided to sit tight for longer than normal. This cooling off is something of a blessing. Bar Covid, for the last 15+ years, demand for staff has outstripped supply, leading to many junior and mid-level candidates moving every year or two and still being rewarded with another salary increase.
Since employees are now around for longer, strong people leaders will turn the attention they used to give to recruitment, to focus instead on performance. And there is no better time to do it.
Optimal time for improvement
A slower market is the optimal time to approach performance topics because of the dual fact that employees will know it isn’t any better elsewhere, combined with a very clear business case for doing it.
Best-in-class location
Never has it been more important for Luxembourg based businesses to assert themselves clearly – not only as the gateway to Europe for funds, or a best-in-class service location, but now also a high performance location with the potential to do more. It’s increasing cost requires it, and the staff based locally are more than good enough to make it happen.
This will require a sustained effort from both managers and HR, but with the right goals, it will be a very worthwhile journey.
Funds Talent specialises in supporting Funds Businesses on a range of issues related to recruitment and retention of human capital, with a special focus on building profitable, stable, and successful Luxembourg-based fund businesses.
