By Paul O’Donoghue
WITH 2023 being a year of widespread cutbacks, it is perhaps unsurprising that the knock-on impact has echoed into 2024.
In many firms, compliance was one of the areas which escaped major cuts – easier to trim areas such as recruitment or marketing. However, a significant hiring pause is being reported in the sector, mainly among more junior roles.
Recruitment firm Barclay Simpson has said vacancies for City compliance roles more than halved between early 2022 and late 2023, while Morgan McKinley has also reported a major pullback following a compliance hiring “boom” in 2022.
“2022 was a very buoyant year in City compliance hiring with the pandemic,” Tracy Keevans, the company’s director of global FDI, told AML Intelligence.
She said that 2024 has proved to be “slower” with compliance hiring. For those UK firms which are taking on extra staff, the close monitoring of costs at finance firms has caused them to cast a wider net than just the City.
“Now, we’re seeing that (new) compliance roles are moving out of London to Bermingham, Manchester and even to Dublin as well,” she said.
In the cases of other locations, this has been driven by the availability of a better talent pool which relocated to lower cost of living areas in the wake of the pandemic.
Overall, recruiters said the effect has been something of a net zero in the UK. While there may be fewer firms hiring for compliance roles in the City, hiring in other regions has somewhat made up for this.
“Our expectation would be that the overall number of workers is about the same. It’s displacement, something we saw from the beginning of Covid,” she said.
Malwina King, a director at Sigmar Recruitment, said while the Dublin compliance sector may have benefitted at the City’s expense to some extent, demand for new staff tends to be in more senior roles, with fewer opportunities for juniors.
Two of Ireland’s five main retail banks, Ulster and KBC, recently exited the market, meaning that what demand exists for more compliance staff tends to be concentrated among international companies.
“The demand would mostly be in fund services, regulatory compliance and oversight of governance,” she told AML Intelligence.
“But they would be on the more senior end, with some junior roles being offshored.”
King said this raises an obvious concern – in four, five years when the current senior hires look to move further up the chain, who will replace them?
John Paul Eaton, the head of UK at tech recruiter Needl, said the picture is relatively similar in fintech.
While deep cuts in compliance are relatively uncommon, he said hiring is still slow.
“Compliance teams weren’t cut because there was no meat,” he told AML Intelligence.
“They were already under-resourced, as they’re not revenue generating areas of the business, they’re a revenue saving area.
“The reason they weren’t touched is because if you want to wave a flag at the regulator, getting rid of compliance staff is one way to put yourself on their radar very quickly. And you don’t want to be giving the regulator an excuse to knock at your door.”
Eaton said this under-resourcing and unwillingness to buff up compliance teams could come back to bite firms if their workers end up over-worked and more likely to leave.
“The bigger effect is how much the restriction on resources will increase the pace of burnout in the space, because that’s how you will lose talented compliance people,” he said.
“It’s just the cumulative effect of everything that’s been thrown at compliance teams over the last two years. The big increase in fraud, Russia invading Ukraine and the push to be aligned on sanctions, Israel-Hamas and terrorism being on the radar, (etc). Compliance professionals haven’t been able to come up for air in a long time.”
With hiring slow in junior roles and the pressure high on existing staff, Malwina King said the best advice for workers in the compliance space is to make sure they continually upskill.
“Employees have to stay up to date and should be looking to progress their careers into more advanced areas,” she said.
“Those who are staying in the area should be trying to add more strings to their bow, particularly in the area of oversight.
“Compliance will always be crucial, it’s just at the minute that the balance of vacancies are being tipped towards the more senior positions.”
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