Risk Management

1. How would you describe the current recruitment market? How has this impacted on compensation?

Risk has continued to be a constant area of activity – across credit, market and financial risk management.

As Funds start to ‘act like banks’ in terms of loans/investing in debt, the need for additional credit risk staff is relevant. The source of which is clearly the banks. Whilst not to the same extent, market risk will follow the same path as funds continue to become more involved in market based products that require active risk management of their exposures. This also includes financial risk, as evidenced by government hiring in recent times.

As always, risk hiring generally reflects any upticks in business flows from the front office, so candidates will then require specific product and/or sector knowledge to mirror those requirements.
Despite the constant demand, compensation levels haven’t moved a lot – primarily driven by risk being a non-revenue generating discipline.

2. Any client or candidate trends observed over the last 12 months?

As has been the case for the past 10 years, at mid level, the question is always: “Do I want to go to front office or do I stay in risk?” At senior level, it is more a case of “How do I apply my skills in a different way? Do I move from banking to funds, from banking to a corporate, from a local bank to a global, or from banking to government?”

There is an increasing amount of activity within the international banks, with more banks setting up and / or bringing their risk teams on-shore from Asia as they expand and grow, in order to execute transactions locally.

There is ever increasing management of risk in banks across all disciplines. As such, the specialisation requirements will dictate activity.

We do sense there will continue to be a solid level of activity across risk management areas this year.

3. Predictions:

We sense more activity in funds with respect to risk management. Selective hiring we expect to continue based on deal activity and growth plans.

As has been building in recent years will be the request from [ex] front office staff to move to risk – especially those ‘free agents’ given the perceived security/stability/growth in risk when compared to some other areas.

In terms of the domestic banks (where credit teams are top heavy and not growing), there will be movement into funds or international banks. This offers clearer promotional opportunities, chances to up-skill, strengthen teams and receive higher remuneration packages.

Opportunity for career progression for the millennial population has been highlighted as an area of great importance and will continue to be important not only for attracting bright junior candidates, but equally as important for retaining those candidates.

Work balance, learning opportunities, career progression and salary adjustments have been the main focal point for the last few years. We have also seen a larger number of candidates move from domestic banks to international banks for the above reasons, offering interesting roles with growing organisations.

4. Any interesting case studies?

One client (bank) recently hired a local risk Director, in a bid to build a credit function (hybrid role) on-shore as the bank grows. Ultimately, this role is responsible for credit risk but with an overview of market and operational risk matters as the bank continues to grow in size and revenue.

Client side: Wanted someone with strong credit skills, can adapt and build a broader risk management function and senior enough to run solo for the next 12-18 months.

Candidate side: Challenging to find someone with credit, market and operational risk experience suitable for a CRO style role that would see the longer term prospects of the role and the firm. Risk professionals generally don’t like to take chances (surprise) and given the ‘safety’ of a larger bank, unsure when the timing / opportunity was right.

Patrick Everest
02 9235 9440

Rob Hockedy
02 9235 9470