Guest Comment: the reliance on compliance

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State of the market

Hiring for compliance professionals has slowed within financial services in the 2008-09 period due to slower business growth and fewer new business opportunities. However, compared to other job functions, recruitment has been relatively steady, for a number of reasons.

Firstly, compliance staff are commonly considered to be key employees for financial services firms. The implications of having an under-skilled or under-resourced compliance team far outweigh the demands of reducing headcount across most financial services firms. Hence, if banks have lost senior compliance personnel, they generally look to replace these skill sets as quickly as possible.

Secondly, banks have had to react to numerous new regulations and compliance issues (such as short-selling bans and anti-money laundering) throughout the 2008-09 period. These have increased the need for specialist skill sets and kept demand for compliance professionals steady.

In addition, ASIC and APRA have both had their funding dramatically increased (and this will continue for the next few years) leading to increased headcount at both these regulators, along with AUSTRAC. This will result in greater regulatory oversight of financial services firms, meaning that banks will need to increase their internal compliance teams to ensure that regulations are met.

Looking local beats going global

Recently, we have seen greater recruitment volumes at the domestic banks, given their strong retail product offering and certain federal government incentives (first home buyer grant, lower interest rates, bank deposit guarantee etc). These initiatives seem to have provided the stability for recruitment to continue in the compliance space.

The lowest volume of hiring is at compliance teams which advise investment banking and corporate advisory departments. There has also been a slowing of recruitment associated with fund managers given contraction in this industry sector due to falling markets and funds under management. There has been some activity across financial markets, particularly within the equities markets, at some of the international banks and certain independent market makers.

Who's in demand?

Demand for compliance staff is generally reflective of changes in the financial services markets - whether firms are experiencing growth/contraction, or if a new regulation requires a specialist compliance skill sets.

Equities compliance staff are always in demand, this is generally at an experienced level. AML recruitment has also been strong in the current market with sustained demand for strong skill sets over the past two years. There are generally steady requirements for compliance staff holding superannuation experience given Australia's compulsory superannuation contribution laws, thereby providing a consistent market for employment.

Move now or move later?

There have been instances of candidates deciding that now is not the best time to move to a new employer. There is significantly more competition for certain types of roles in the current economic climate and salaries have not been rising at the rate of previous years in some parts of the market. However, this is not true for all areas of compliance and certain skill sets will always be in demand and therefore demand premiums when salaries are being discussed.

Overseas experience v Aussie knowledge

There are requirements for offshore candidates when the relevant compliance issues are covered globally (for example anti-money laundering). However, for unique Australian regulations, employers prefer domestic candidates with local experience and a local understanding of these principles. This becomes more apparent for more senior and more technical roles.

Outlook for 2009-10

There is sufficient evidence to suggest that recruitment for compliance professionals will remain stable for the remainder of 2009 given increasing regulatory oversight. Any increase in recruitment volumes will be a result of a return to growth in the banking and finance industry and reflective of the specific sectors which are experiencing this expansion.

Jacob Smith, manager, risk management and compliance, Robert Walters, Sydney

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