01 October 2019
Professionals have had to adapt to tough market conditions and in some instances have reduced their rates in order to secure compliance and risk roles
Within compliance, the continuous rise of the challenger bank has continued to grow. Where the country remains somewhat in the dark surrounding how Brexit is going to progress, larger banks have put the majority of their hiring in the UK on hold. A number of firms have been hiring away from the UK, with the likes of Paris, Luxembourg, Poland and India on the list for either Brexit planning, cost saving or establishing talent hubs.
Risk, banking and financial services have continued to perform steadily year-on-year; the main focus of hiring has been regulatory driven, however Brexit has also played a key role. Some teams in London have had hiring freezes implemented. This in turn has had a knock on effect, culminating in an increased number of international roles across European hot spots such as Paris, Dublin and Frankfurt. These opportunities have proved to be attractive for talented risk candidates – they may not have had exposure to these roles in their home market otherwise.
Whilst retention doesn’t strictly apply to temporary hiring, so far this year in compliance a number of organisations have extended staff and pushed for extra approvals in order to keep contractors on board. The main reason for this is to keep headcount consistent until firms have moved forward 100% with their Brexit plans. There has also been a trend of temporary positions becoming permanent as more firms ‘try before they buy’, ensuring they have the right person for the role but also to prove the need for the headcount – this is mostly seen in the growing international/challenger banks.
The rise of fixed term contracts in compliance has meant temporary workers can now expect similar benefits to permanent employees, including flexible working, the option to work remotely and guaranteed bonuses. Firms have been adjusting their models of diversity led hiring and training initiatives. A great example of this is Investment 2020; a scheme that enables individuals with limited or no exposure to financial services to start their careers in the investment management industry and gain the necessary skills and experience to progress.
Within risk, across both banking and asset management, companies are continually expanding their offerings to employees in an attempt to ensure they are providing an appealing work environment and compensation package beyond just salary increases, such as:
From a risk perspective, candidates often highlight desired benefits which include:
• investment in their learning and development such as paying for, or contributing towards, successful completion of CFAs or ACAs
• incentives and rewards
• strong pension contributions from an employer
• an opportunity to buy additional annual leave days or to have an attractive holiday allowance
• some employers are offering ‘promotion on hire’ for certain candidates with niche skill sets which is extremely attractive to an employee and fastracks their career path - this also makes them feel valued as a new joiner and cements their commitment.
For compliance professionals, 2019 commenced with monitoring and surveillance as an in demand area. A number of firms are deciding where, and how, to best utilise their surveillance function, whether to have it as part of the front office or in the back office. Junior – mid level AML/FCC analysts have found themselves in demand, with the desire to hire coming from international banks and FinTech firms. As ever, ICA diplomas and CISI qualifications brought extra value to professionals.
Candidates who have found themselves out of work have had to adapt to tough market conditions that has resulted in a drop of jobs available when compared to the same period of 2018. In certain instances, including in the product advisory space, professionals have had to be flexible with their rates, some seeing a reduction of between 10% and 30%. The increased near and off-shoring has also caused candidates to be more open to relocating if they want to find suitable opportunities. As a whole, this is mostly within operational functions such as KYC, on-boarding and remediation. This said, it isn’t only cost saving that’s driving this, but also that professionals in other locations are more skilled in different areas; some of the larger banks are moving their surveillance functions to India due to the fluctuation of data scientists in that market.
Across leveraged finance risk candidates, there has been a strong demand for talented credit experts who have their own lending discretions or sanction authorities to sign off large complex and highly leveraged transactions. Within investment risk, the need for a CFA qualification is almost becoming a prerequisite in order to be considered for some opportunities, or at the very least to have completed or be in the process of completing them; candidates with programming and quantitative skills (Python and VBA) are also in demand.
In the quant world, there is a need for understanding around governance, frameworks, and policies for model risk. So much so, that there are new teams being formed to specifically cover these key areas. Given that some teams are taking on larger portfolios and coverage across various regions, there is a strong appetite for candidates with additional European language skills.
It is interesting to note that for risk professionals, compensation is no longer a top priority across the board for candidates when exploring new roles. They are willing to move to new organisations for the same salary, or in some cases even taking a pay cut, if there is a healthy work-life balance on offer and the organisation has a forward thinking, inclusive culture.
Professionals are also recognising that they need to be more mobile in order to further their careers, and Brexit has provided some fantastic opportunities to explore roles across a number of European hubs.
Some candidates were disappointed with bonuses this year, especially if it doesn’t reflect a strong performance review; this has resulted in some long term employees moving to pastures new for an opportunity to achieve higher compensation, receive better bonuses and additional benefits.
It is unavoidable and, unsurprisingly, it’s the major event influencing almost every industry; Brexit. Brexit has been a driving force, creating unique opportunities within companies.
A number of firms are trying to become Brexit ready by creating entire functions in places such as Paris and Dublin. A number of firms were hoping that just a postbox would suffice, but the regulator has made it clear that is not the case.
On the flip side, given the uncertainty surrounding the outcome of Brexit, some key clients and recognised ‘big players’ within the risk market have stalled or reduced their hiring plans until there is a clear line of sight.
Looking forward, we anticipate MiFID III to be the next big regulatory legislation which will impact the compliance market. It is unlikely to be the huge upheaval that we saw for MiFID II, but more just fine tuning the existing regime.