Spring fever hits compliance hiring

Which is the most sought after skillset in finance this Easter? It would not be too far awry to say compliance.

With the European Union's Markets in Financial Instruments Directive (MiFID) around the corner, recruiters say compliance departments are engaged in frenetic hiring activity.

"Banks are all gearing up for MiFID," says Richard Aldridge, manager of the compliance team at recruiter Robert Walters in London. "The larger banks are retraining existing compliance staff. And smaller banks are paying over the odds to hire the MiFID trained staff from larger rivals."

Aldridge compares the efforts going into preparing for MiFID, due for implementation across the European Union by November 2007, with preparations for N2, the moment in 2001 when the Financial Services Authority took control of UK regulation.

"MiFID is impacting the whole market - this is the biggest overhaul of the sector for God knows how long," he says. "It underpins just about everything."

The need to address the issues thrown up by MiFID, which aims to open up capital markets across Europe and increase trade transparency, was highlighted by a recent study of 199 banks and fund managers by KPMG. 30% of respondents said they didn't know what had been done to prepare for the new regime.

Fergus Hooley, manager of Joslin Rowe's compliance division, says MiFID is compounding existing staff shortages in the compliance sector. Earlier this year, a study by Joslin Rowe, found that 75% of compliance professionals were finding it hard to recruit. "Those in the business with the necessary skills are not willing to move into compliance because the money is not good enough," says Hooley.

In the short term, Aldridge says the discrepancy is being made up with contract staff. This is particularly the case when it comes to money laundering, where he says people are being hired on six month contracts to work on client reclassification work related to MiFID.

Longer term, however, recruiters say continued hiring is likely to prompt rising pay. Compliance Reporter reports that BNP Paribas alone is hiring 13 extra compliance staff in London, and that continental European banks remain particularly understaffed in the area.

Maximilian Redolfi, a recruiter at Michael Page in Milan, says remuneration for Italian compliance professionals has risen around 15% in the past year. Nevertheless, pay in continental Europe continues to lag considerably behind pay in London. Redolfi says an Italian compliance professional with three years' experience can command a salary of just €40,000 to €55,000 (38,000), plus a bonus of no more than 15%.

Similarly experienced compliance staff in London can earn over 40% more.