What to expect in 2009
Focus on the market for 2009
Regulators will take a supervisory role in 2009, encouraging companies to adopt a risk based focus, increase their monitoring and maintain an awareness of training needs.
Firms are looking to complement quantitative methods with more business focused risk managers and candidates with scenario analysis experience. There will be a move from risk report to more control, whether this is in the form of increased calibration and improved parameters of existing regulations such as Pillar I of Basel II.
The ratio of Market risk managers to traders will increase as a means of control.
Changes to compensation and incentives packages will force banks to increase their risk profiles and methodologies.
Operational Risk will still be a focus into 2009 as increased regulation and oversight is imposed on organisations.
Recruitment Trends for 09
We have already seen a shift to the hire of senior risk managers ahead of any potential regulation, the logic behind this is to ensure individuals are in place to deal with the regulators and structure subsequent internal policy and the teams to implement it.
The days of a candidate led market are gone and risk recruitment is now driven by employers. There has been an increase in candidates in the market and a decrease of available roles, for candidates this has meant that there is tougher competition. For employers, this has provided them with a larger pool of candidates to pick from; specialist roles, on the other hand, will be harder to source due to firms wanting to hold onto their best risk professionals.
Redundancies have meant that a lot of candidates are available straight away. Employers have started looking for experienced hires with a background of working with relevant products or frameworks rather than a general knowledge of an area. There has also been an increasing trend for hiring candidates on a temporary basis as part of an extended interview process.
Employers are now more concerned with how quickly their new hires can add value, their body of experience, their qualifications, their international exposure, their ability to advise on transactional issues and how they have responded to situations in the market in the past. They are looking for employees who are resilient, adaptable, able to think on their feet and who can hit the ground running; people who can build confidence within the firm, contribute positivity to the general outlook and pull the business and risk closer together.
Senior candidates with a mix of Risk and Compliance experience will be in demand next year with firms putting more pressure on the two areas to work together. Graduate recruitment into risk next year will be slow, as employers simply don’t have the time to train individuals up from scratch.
Our contacts tell us that it will be at least 18 months until investment banks hire at the same level as they did in 2007 and 2006. They have been taken over by Investment Houses and Liquidity Providers, none of whom have been hit as hard by the dreaded subprime crisis and have been quicker to adapt to the market conditions. These firms, as well as Distressed Debt Funds and Commodity houses, are likely to lead the way with regards to recruitment activity.
In contrast to last year's demand for quantatitive risk managers, we expect to see more roles for professionals with a qualitative approach. This will not, however, reduce the need for a strong academic background and a good analytical understanding.
Temporary / Contract Recruitment
We are expecting an increase in recruitment volumes across all risk reporting areas within investment and corporate banking – with particular focus on operational risk during 2009.
The levels of recruitment will be dependent on the nature of the regulation put in place – those projects with shorter-term deadlines will often require specialist temp and contract workers to complete them. These temps tend to come from control, risk reporting or internal audit backgrounds.
We're also expecting FS businesses to initiate more BAU and line reporting recruitment across the quantitative credit and market risk areas.
