Risk is not impervious to the recruitment slowdown
With most investment banks now taking stock of front office hiring until earnings become less precarious, is the supposedly buoyant recruitment within risk management likely to follow suit?
In 2009 the theory was that, as heads rolled in the post-Lehman landscape throughout the investment banking industry, risk was a relative recruitment sanctuary as firms looked to bolster this function to appease rising public and political anger.
In reality, hiring in risk was also almost non-existent at the height of the crisis, suggest recruiters, and it's not excluded from the slow-down now.
"In the second half of last year, and first part of 2010, banks were focusing on replacement hires and expansion, and this includes risk," says Adrian Marples, director in the risk practice at Kinsey Allen. "But recently, ambitious expansion plans have been thwarted by market conditions and this, combined with the time of year, have meant banks have largely put brakes on headcount additions."
This is not to say that hiring in risk is dead entirely. Recruiters point to numerous roles within Bank of America Merrill Lynch, Deutsche Bank, HSBC and RBS, as well as within asset managers.
The type of roles, however, has changed: "This year we've seen a strong increase in the number of operational risk positions, where as the focus in 2009 was very much around credit risk," says Priya Mariannie, senior consultant, risk at PSD Group. "Banks are organising themselves to absorb a highly regulated environment."
She says that a number of banks are chasing a small pool of candidates, particularly at the senior end, and that salaries are being pushed up by 20-30% as a result. Similarly, Robert Walters' research suggests that base pay has risen by an average of 30%.
Unfortunately, according to Marples, this doesn't necessarily suggest a candidate-driven market, but more compensation for lost bonus accrual for moving at this point in the year.
"Some banks have aggressively re-marked risk salaries, while others have largely kept them static," he says. "Therefore, the banks that are recruiting are offering a 30% uplift from this low base to encourage candidates to move, while admitting that a bonus is unlikely for this year."
