Introduction Today’s market is an environment that few, if any, city workers have experienced before; impending or actual recession, volatile markets, unprecedented ‘bail outs,’ hundreds of thousands of job losses and falling house prices, share prices and poor market sentiment are all placing an unbelievable strain on people in all spheres of life.
Is it all doom and gloom? From a compliance perspective, this is the time for compliance professionals to earn their crust, to be proactive, risk focused and mindful of regulatory and financial development. At some point things will start getting better and we would like to think that we are beyond the half way point!
General
While recruitment across all the banks has tightened, compliance departments have continued to recruit; not at the levels seen in previous years but still consistently.
Firms have tried to keep external hires to a minimum. Where this has not been possible, they have relied heavily upon on-site providers to actively pursue candidates. Going direct through agencies has tended to be the last resort.
Firms have been hiring people who genuinely want to work for them and have not been throwing money at candidates to secure them.
There has been real uncertainty for candidates who have been battling to decide if they should stay put to avoid the last in, first out redundancy scenario or if they should be looking at new roles just in case it’s their own firm that is the next to go. This uncertainty is likely to continue into the New Year. In spite of the recent market turmoil, there have been limited redundancies across the Compliance sector. Apart from firms that have gone under, there have not been any large scale staff cut backs.
Cost base continues to be tightened across the City and we have seen a number of Heads of Compliance at Asset Managers and Hedge Funds made redundant; mid–level Compliance officers have taken their place and the CF10 and CF11 responsibilities are going to members of the board. The second half of 2008 saw a definite increase in vacancies across all the sectors. However, due to Lehman Brothers and other market downturns this quickly changed.
There has been a large number of start-ups and smaller firms within London who have managed to secure high calibre investment banking staff, who would not have been available to them in other circumstances.
The first half of the year was a changing landscape where most firms were focused on consolidation. The second half has been about new rules and firms have had to act fast and adapt quickly. The next 6 months? Staying on top of emerging measures.
There have been strong warnings from the Chief Executive of the FSA, Hector Sants, not to use the downturn as an excuse to cut compliance numbers. Compliance departments are seen as an extreme necessity within all organisations; they have become more valued and are working closer to the business than ever.
Salaries
Basic salaries mirrored that of 2007 in that they have been steady and competitive. The average pay increase has ranged from 10% to 15% and guaranteed bonuses have become a thing of the past. Salaries will stay flat in 2009 and bonuses are likely to be hit.
In 2008 candidates’ salary expectations were very high, with most candidates expecting an increase of 25% on their basic salary and demanding guaranteed bonuses. This has changed over the last few months with the influx of redundant compliance professionals in the market and due to the lack of compliance jobs available.
Motivators are changing; this quarter and going into 2009, candidates are less motivated by the bottom line and more motivated by the stability and strength of the company, the long term opportunity, company culture, day to day position and exposure to the business.
