NAV employees prove hard to hold onto

To the uninitiated, a NAV may sound like a piece of exciting new getting-directions technology for the car or an emergent social phenomenon, but the reality is more mundane. Recruiters say it's one reason for Ireland's current skills shortage.

Ireland's financial services sector is focused on the business of fund administration, and to a large degree, funds administration is about calculating Net Asset Valuations (NAVs). Calculated on a daily basis, NAVs are the total value of a fund's portfolio, minus the value of its liabilities.

By nature, calculating NAVs is a repetitive and sometimes monotonous task, and after a few years of doing it, recruiters say employees will often leave in search of a change. The trouble is that Ireland's fund administrators are in desperate need of their experience.

"An experienced fund administrator can expect to have between six and ten interviews [at different firms]," says Kate Thomas, manager of the finance team at Dublin-based Premier Recruitment. "There's a real shortage of experienced candidates."

The head of recruitment at one Dublin fund administrator confirms the experience gap. "The difficulty comes when we want to hire senior people with fund accounting or compliance experience," he says. "The nature of this business is that unless you're a manager, the jobs can be repetitive. There are a lot of people who've been in the industry for seven or ten years and are looking to move on."

He adds that difficulties filling vacant positions and the departure of some experienced staff are increasing the pressure on existing staff and making it harder still to retain them: "Staff shortages create overtime, which then encourages people to leave in search of shorter hours."

Worse before better?

It's a problem that needs to be addressed. The recently published R&M Dublin Trustee Survey 2005 found average client satisfaction with Dublin's fund administrators declined last year. Richard Hogflesh, chief executive of R&M Surveys attributed the fall to the lack of skilled staff. The problem has the potential to worsen: organisations like State Street plan to expand their Irish presence in 2006.

Gary Palmer, chief executive of the Dublin Funds Industry Association (DFIA), says the industry is adequately managing the challenges posed by its rapid expansion: "Ireland has had inward migration of more than 100,000 in the last year (mostly from EU accession states), and the education programmes offered by the DFIA and other educational institutions continue to produce top quality graduates."

But recruiters say immigration and university graduates are doing little to alleviate the need for staff with prior experience and that Ireland's fund administrators are creating their own solutions.

Financial incentives are inevitably one of them. A recent survey by recruiter Joslin Rowe suggests pay rose more than 16% in the first half of 2005 alone. "Sign-on bonuses of 5% to 10% of salary are becoming more and more common," says Thomas at Premier Recruitment. She adds: "Firms are also looking at offering other benefits like mortgage subsidies or rent payments, and luncheon vouchers so that staff don't have to use the money in their pockets at all until they leave work."

And there's the little issue of on-the-job monotony. Thomas says companies like Goldman Sachs, which runs a fund administration office in Dublin, are addressing this by combining departments and varying roles, so that employees get more client exposure and work on corporate actions as well as NAVs.

If others follow in their footsteps, Ireland's fund administration industry may find it easier to recruit, and then keep hold of, staff in future.