J.P. Morgan has been doing some big hiring in control. In a memo to employees yesterday, Jamie Dimon reiterated (yet again) that the bank has hired 4,000 people across risk, compliance, legal, finance, technology, oversight & control and audit since the start of 2012. 3,000 have been added this year alone.
Dimon didn’t say whether this is the end of J.P. Morgan’s control splurge. He did say that J.P. Morgan is now deploying ‘unprecedented resources’ to an anti-money laundering programme. He also said that J.P. Morgan is increasing its spending on the exciting area of, ‘technology in the Regulatory and Control space.’ J.P. Morgan declined to provide us with any further details.
Something, however, looks a little strange about J.P. Morgan’s claim to be a big hirer in controls.
Between the fourth quarter of 2011 and the second quarter of 2013, headcount at J.P. Morgan fell by 6,000 people. In the corporate and investment bank, headcount fell by 251 people in the first half of this year when the 3,000 control staff were being added. So either J.P. Morgan is cutting tens of thousands of staff whilst hiring in thousands of extra-compliance and risk professionals (a possibility), or it’s reallocating people internally. Faced with the threat of redundancy, who’s to say a trader in London wouldn’t take a big pay cut and move to Bournemouth to work for J.P. Morgan in compliance?
A brief perusal of J.P. Morgan’s current job advertisements suggests it’s certainly hiring in compliance and controls. The bank currently has 347 jobs going in compliance, 77 in legal and 329 across accounting, audit and risk. However, that’s only 12% of its total openings, suggesting that these roles aren’t exactly a big priority.
Recruiters tell us they haven’t seen much sign of J.P. Morgan’s rampant control hiring. However, this is mostly because J.P. Morgan doesn’t really use recruiters and fills most of its jobs itself.
We understand that J.P. Morgan is shifting existing staff into its newly-strengthened control function. Profiles of some of J.P. Morgan’s risk and control staff globally suggest it’s certainly open to using ex-traders in control and compliance jobs. A VP in its London equity derivatives compliance group spent five years as a prop trader. A compliance manager in the corporate and investment bank in New York spent three years as an equities prop trader. Notably, both made the decision to jump into compliance early in their careers – they didn’t wait until they were pushed.
“It’s much harder for a trader to move into compliance than it is to move into risk,” said one recruiter who declined to be named. If J.P. Morgan wants to recycle front office salespeople and traders, it may need to be inventive.