Bermuda's unemployment rate is a fraction of some of its competitors but a large unused labour pool overseas spells danger as it increases the temptation for firms here to outsource to cut costs.

Notoriously high labour costs combined with a recession makes firms even keener to survey their options rather than do it all here. And it's more than just a concept.

Association for Bermuda International Companies (ABIC) spokesman Richard Winchell said half of ABIC's members have considered outsourcing the most favoured locations are Canada and the US, and typical functions outsourced are IT, accounting and administration.

Mr. Winchell said 90 percent of the companies surveyed already have operations elsewhere the most favoured locations are the US, the UK and Ireland and elsewhere in Europe.

"Nearly half of our members have moved functions away from Bermuda in the last five years, the principal reasons are lower costs and availability of skilled labour."

Doug Soares, head of employment agency Expertise, said: "This recession is teaching us that sub-standard work in Bermuda performed at a high cost will be punished by outsourcing the work. With the click of a mouse work can be done overseas.

"Many jobs that have left Bermuda are not coming back. Many jobs performed by accountants in the fund administration industry are an example."

Those jobs can be performed more cheaply and efficiently from jurisdictions such as Canada and India, said Mr. Soares. "While some in Bermuda may conclude that this is not a real loss as many of those jobs were occupied by work permit holders, I maintain that each of those jobs lost represent one less opportunity for a Bermudian in the future.

"It also has an negative impact on supporting industries and government less cell phone usage, less groceries consumed, less rent collected by Bermudian landowners, less tax collected etc."

Acting director of Labour and Training Wayne Smith said his department would be pushing the need for people to improve their work ethic. He said: "It's a global village in which we compete.

"We are going to have to provide a standard of service, efficiency and productivity that matches what's on offer elsewhere because companies are outsourcing jobs and moving entire functions to India, Bangladesh and other places.

"The Bermuda workforce has to upgrade its efficiency and effectiveness and the cost of doing business has to be such that we are providing value for money. It's hard to drop the cost but what you can change is the standard of service so people feel like they are getting what they pay for."

Bermudian consumers are also increasingly looking overseas rather than limiting themselves to on-Island purchases.

Chamber of Commerce president Stephen Todd said there will be another big push to get residents to support the Buy Bermuda campaign to help preserve local jobs throughout a difficult winter.

But he wants businesses to also give something back to the consumer who feel they don't owe local outlets their loyalty, particularly when every dollar counts. "We are looking for businesses to become energised in terms of how they market themselves via promotions and discounts and for the most part reinvent themselves so they can present their products and services as an alternative to the consumer. In that way they can encourage the local consumer to shop locally and support local businesses."

* Tomorrow: Jobs are tumbling across the Island yet some would-be recruits are still failing to grasp the new reality. The Royal Gazette hears from human resources professionals who say the care-free years are over.