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Mid year review Part I: regulation a catalyst for FS job growth say consultants Back
In the first of a two part series on employment in financial services Finance Dublin surveyed a panel of recruitment consultants on the current state of the jobs market. Part II next month: corporate and career profiles.
The jobs market in financial services in Ireland has been through a turbulent period; from one extreme in 2007 when wage inflation and skills shortages to the other extreme after the onset financial crisis when salaries corrected sharply downwards and jobs were lost (most acutely in domestic financial services). Now in 2014 the scenario has changed again according a large section of Ireland's financial services recruitment and executive search industry, whose opinions are surveyed here. The change is a positive one and candidates are again in-demand and salaries have begun to rise, albeit someway short of pre-crisis levels, they report, and perhaps to the benefit of the competitiveness of the IFSC.

Financial services growth creating demand for professional services
Over the past year salaries have increased and jobs have been steadily created across international financial services according to the panel. As has been the case through the crisis, the international financial services sectors are outperforming the domestic financial services industry which still remains relatively challenged from a job creation point of view. Though the IFSC is not just creating jobs directly, it is also driving growth in Ireland's professional services firms which service this market.
Mark Fallon of Robert Walters says, 'there has been constant and steady growth in professional services companies compared to last year...there has been a direct impact on the increase in professional services due to the growth of companies based in the IFSC and that in this particular sector there has been a need in mid-management level.'

'The rising activity of the international funds sector has seen a corresponding increase in the number of legal and accounting services being provided to this sector,' says Trayc Keevans director of inward investment at Morgan McKinley. 'The Irish Funds Industry is at the forefront in preparing for and reacting to regulatory changes at EU and local level and with the large volume of guidance notes and policy documents being issued by the Central Bank, fund companies are seeking the outside expertise of legal and audit professionals to ensure their ongoing compliance. Operational Risk specialists, compliance consultants as well as specialist tax advisors are among the most in demand positions.'

Compliance and risk
Not only the professional services firms are hiring because of the regulatory tidal wave coming out of Europe and increased regulatory requirements from the Central Bank. The jobs and functions most in demand come as a consequence of this greatly increased regulatory burden. Compliance and risk management professionals are in demand across all the sectors say the recruiters and headhunters. ''The ever widening compliance and regulatory landscape continues to see the demand for experienced audit and compliance professionals exceed the supply,' says Keevans.

Mia Barry, director at Paragon, says risk candidates are in short supply in particular those with market/credit/liquidity risk experience due to demand amongst asset managers, corporate/investment banks and insurance firms. Mid-level compliance professionals are also highly sought after, particularly where there is a requirement for industry specific experience, for example, fund administration or insurance.

Larry McCowen of Quest says there is a very high demand for roles dealing with AIFMD, FORM PF, OPERA and Dodd Frank. He says, 'these candidates would generally come from a Financial Reporting background within an Alternative Investment Fund Administrator, or from Big 4 Audit and would hold an appropriate accounting qualification. They would also need a thorough understanding of the NAV process as well as the aforementioned regulatory requirements.'
Simon Waddington

Erica Skelly from Careers Register says the increase in the demand for compliance, audit, risk professionals especially in the last 6 months will continue for the foreseeable future. She says, 'companies now more than ever need to ensure their systems and policies are sufficiently robust to deter the risk of fraud. The Central Bank set out a number of enforcement priority areas for 2014. These included fitness and probity obligations of the Central Bank Reform Act 2010 and Anti-Money Laundering (AML)/Counter Terrorism Financing (CTF) compliance across all sectors. The resulting impact on the industry is that organisations need to ramp up on numbers of staff in compliance, risk, audit etc.'

'There are high levels of demand for AML professionals at the junior end of the market within the funds sector,' says Donal Whelan, senior consultant for compliance in Robert Walters. 'The temporary market has been more active with many firms recruiting candidates for short term AML remediation projects resulting from increased regulatory oversight and fund migrations,' he adds.

'Mid to senior level risk and compliance roles are where we have seen most activity this year. This has been driven by increased turnover as candidates in these disciplines realise that their market value has substantially increased. Finance and audit professionals are also in demand (from newly qualified level) with niche areas such as regulatory reporting roles.' says Paul O'Reilly director at Paragon.

However, Paul Cotter of Cotter Personnel says that this demand for compliance and jobs coming from companies' regulatory requirements may be beginning to taper off in insurance, his area of specialism. He says, 'compliance within the insurance sector has seen reduction on positions last year. This was to be expected. The high demands of recent years has reduced as most companies are not building compliance teams but managing natural turnover.' Cotter's point is salient for all sectors as once some of these once off regulatory changes have been implemented the hiring spree will cease.

Growth in vacancies
Apart from compliance and 'regulatory' roles, recruiters report an increase in the number of job vacancies across a range of different sectors and functions. 'Following our bi-annual review in June within Executive Connections, say that registration of new assignments is up 14 per cent on the same time last year from graduate level to head of function,’ says Hilarie Geary from Executive Connections.
Hilarie Geary

'We are seeing a renewed confidence in the market in general: not only are clients pressing ahead with key, strategic hiring decisions, but by comparison to recent years, potential candidates are increasingly prepared to engage with a headhunter to discuss a new challenge. Between 2008 and 2013, they were more inclined to keep their heads down,' says Simon Waddington of executive search company Healy Hunt. 'At the senior levels at which we operate, demand for exceptional candidates is now outstripping supply,' he says.

Larry McCowen, Quest says 2014 began with some slight trepidation for what results Q1 would bring for agencies working with financial services clients. He says, 'those in the know, saw that there was a significant overspend on salary budgets in many organisations throughout the final 6 months of the year in 2013, and the knock on effect, although indeed present, thankfully did not carry the impact we expected.' Instead Quest have seen a 29 per cent uplift in role requisitions for Q1 and Q2 versus 2013. He also says the last 18 months has seen a shift away from permanent to temporary contract roles - a knock on effect of the overspend last year, and a trend which is expected to continue for the remainder of the year, and into 2015.

Keevans of Morgan McKinley records a different trend. She says, 'we saw the trend of hiring more in a temporary or long term contract capacity which meant that employees did not enjoy benefits compatible with a permanent position. This trend is starting to reverse as we now see employers benchmarking and restructuring their benefits offerings to ensure they attract and retain the best talent. So while salaries overall may not have increased significantly, there has been a slight increase in total.'
McCowen, like other recruiters who spoke to Finance Dublin, has seen a drop in the demand for more junior candidates, although this has been offset by an increase in requirement for manager and senior manager roles.

Funds sector a major driver in jobs growth
While there is a general improvement in demand for candidates across many segments of international finance, the Irish funds industry remains a major driver of job growth for the IFSC and Irish economy. 'There has been increased demand for fund operation professionals and specifically fund accountants and transfer agents at the mid experience level,' says Keevans. 'Within this sector there have been increased requirement year on year for project managers and business analysts for a variety of activities including client on-boarding, process off-shoring and systems implementation. Regulatory changes within the funds industry have also led to an increase in the demand for compliance and trustee professionals.'

'The funds sector continues to demand strong profiles for financial reporting and fund accounting roles at junior to senior level,' says Erica Skelly from Careers Register.

'Due to the vast amount of live roles that need to be filled, employers are now considering Big 4/ financial services type candidates who can offer a lot of transferable skills and experience. There are increased requirements for qualified accountants in the funds sector where the role encompasses involvement in new regulatory reporting data initiatives for hedge fund clients arising from recent changes in legislation including Dodd Frank and AIFMD,' she adds.

The core of recruitment within funds has been focused on middle-office and back office roles says Mark Fallon, manager for accounting and finance in Robert Walters’ Dublin. He says, 'there is high demand for experienced fund accountants and administrators in the Dublin market.' He says that levels and trends remain constant compared with last year and finds that the challenge facing international funds is finding the talent locally.

Apart from funds, insurance is solidly creating jobs. 'Within the insurance sector we are seeing a reasonable flow of jobs across most areas. Nothing in very high demand but steady demand in some areas such as finance and underwriting.' says insurance specialist Cotter. 'The second jobber is starting to see more opportunities presented and I think this will get stronger as the year goes on. The senior end of the market has been a little slower this year despite a higher demand from people at the senior levels looking to move. This I feel is down to changes within some companies, lack of business growth for some and other locations seen as more attractive to set up.'
Paul Cotter

Aviation finance is an area that is short on experienced candidates but Mia Barry says the aircraft leasing sector is less willing to consider candidates coming from outside the industry. They say with new firms continuing to establish in Dublin, the pool of finance, taxation, legal and risk candidates is shrinking.

Given the strong demand there is in a number of areas of the job market salaries have increased for the first time in a number of years the recruiters and headhunters say.

'We have seen an increased number of counter offers in the past twelve months which has seen some companies willing to pay more to retain their top talent as market conditions and job opportunities improve. There is a more discerning job seeker in the market who now knows their value and is likely to receive more than one job offer and will be selective in choosing the right opportunity to advance their careers,' says Keevans. 'There is more of a confidence in hiring now than there was two years ago.’

Waddington sees the same trend and the return of the counter-offer as he says organisations are no longer prepared to see their top talent simply walk out the door to a competitor. 'As is always the case, market forces will influence remuneration patterns. It is no longer purely a buyer’s market, and we are seeing significant uplifts in both base salary and bonuses, which is a trend we expect to continue. We have seen in some cases long-term reward policies which have a link to turnaround, flotation or some other specified event,' he says.

'I would expect to see an increase in salary across in-demand sectors, particularly in the areas of chartered company secretarial, trustee, and private equity real estate. There has already been a significant uplift in salary level in these areas, purely due to a supply and demand correlation,' says McCowen.

'Strong trustee officers have seen salaries rise as much as 40 per cent in the last 12 months, along with an equally impressive rises of approximately 30 per cent for private equity real estate NAV predominantly at manager and senior manager level, and 25 per cent salary increases for chartered CoSecs. Salaries for the most part, excluding the above exceptions, have remained steady across all sectors over the last 12 months; though there has been a slight drop in the market rate for Mutual and Hedge Fund Accountants across all levels, as there has been a decrease in demand in the last 3 consecutive quarters,' adds McCowen.
Mia Barry

'Salaries have increased in the past 12 months, from having been very stagnant for several years following the recession. The fund administration sector continued to be busy with people moving jobs, especially at the junior to mid-level section demanding an increase in salary by €2-5K. We are now seeing more of a movement at the senior end again with growth in business and big change programmes, again candidates demand an increase when moving and generally receives ca €5-7K,' says Mia Barry. 'We saw a surge in salaries in 2013 for the mortgage arrears and distressed asset servicing with banks being forced to pay inflated salaries as talent was hard to come by and a higher salary ensured staff to manage the loan books. This has calmed in 2014 and it is back to business as usual and more realistic salary levels.'

'We have seen an increase on the base salaries paid in capital markets and bonuses paid out. Generally speaking anyone moving roles in 2014 will see an increase in salary of 5-10 per cent.'

Staff retention
As there is an increased confidence in the markets and people are keen to look at new opportunities, HR has looked at retaining people for 2014 and we are seeing an increase in counter offers, again driving up the salaries. However, companies still have tight budgets and the focus is on ensuring people are happy in their jobs for other reasons than money, ensuring good training is offered and good work environment.' says Paul O'Reilly.

Donal Whelan of Robert Walters says 'salaries have not moved significantly over the past 12 months in compliance based roles. However, in recent times bonus payments have become more frequent and are being offered to retain key talent in organisations. In compliance, the greatest room for movement in salary is in the 1-5 years’ range as candidates have a number of opportunities available to them. At a senior level, salaries have remained stagnant and recruitment budgets continue to offer little scope for bargaining at final stages. There has been limited change to salary levels in the last 2 years but the increased volume of recruitment is creating counter offer situations, resulting in salaries being driven upwards internally in many organisations.'
Donal Whelan

Hilarie Geary of Executive Connections says, her company sees an average increase of 5 per cent on fixed salary levels when compared against this time last year. She says, international financial services companies have reinstated full benefits packages with bonus’ very much on the rise. 'With regard to some functional disciplines, we have seen bonuses increase by as much as 15 per cent in a 12 month period,' she says.

'In the main, salaries have remained very static in the insurance sector over the last number of years and I would expect this to continue,' says Paul Cotter. 'There are always some positions that will see a higher increase than others such as finance with industry experience. The other area that could see the possibility of above average increases is the second jobber graduate who has industry experience. As we start to see more of a recovery then firms will increase hiring. They do not tend to hire senior people to start with nor do they want raw trainees. As so few companies hired trainees between 2008 and 2012 there is a limited number available. Therefore this person has become more valuable and in short supply. The benefits offered have remained very much as before. Health and pensions are standard with most companies with some still offering bonuses but not yet back at Tiger amounts,' he says.

Getting a qualification from the Association of Compliance Officers in Ireland (ACOI) is a major asset to job seekers say contributors. 'ACOI is a key requirement for compliance professionals and is usually a requirement for candidates to meet the CBI’s Fitness & Probity requirements. However we are not seeing clients asking for these qualifications as a must,' says Paragon's Paul O'Reilly.

Careers Register's Erica Skelly says, 'in relation to Compliance the ACOI qualification is usually required for roles but we would say that most candidates who are a few years working in Compliance would have already pursued the qualification. Again the same with audit, candidates working in this space will already hold the required qualifications.'
Paul O'Reilly

In terms of qualifications in demand McCowen says the market is experiencing a particular shortage for ICSA (Institute of Chartered Secretaries and Administrators).

He says Computational and Quantitative Finance degrees are incredibly important for Risk and Valuations roles, which are becoming more important to the Dublin financial services market. There is a distinct lack of candidates with experience in customised portfolio risk reports and risk measures for financial derivatives (Exotic Options, IR structured products, CDS, Volatility products), VaR and risk modeling experience such as Black Scholes, stochastic volatility among others. Considering the shortage, these candidates are more often than not sourced from London, or we would find our clients making exceptions, and making hiring decisions based upon candidate aptitude rather than experience, he says.

'We are seeing an increase in the retail banks with new lending and targeting fully qualified financial analysts,' says Erica Skelly. 'This would be one area we won’t see as many. The APA qualification brought in over recent years is an interim qualification so candidates need to ensure they still go ahead and complete the full QFA qualification. Any sales or advisory role must hold this qualification. On the insurance side, the demand for CIP and APA candidates is still strong as well as the Diploma in Loss Adjusting which is relative to the more complex claims type roles,' she says.
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