Irish financial services: What was hot, and what was not, in 2010?

With the Irish government eventually accepting a humbling €85bn rescue package from the EU-IMF in November to support its stricken banking sector, it's safe to say that - generally speaking - 2010 has been something of a bleak year.

Employment prospects now look decidedly shakier in the domestic institutions, leading some to make broad brush assumptions about the country's financial sector.

But, as we point out below, some facets of the financial services industry in Ireland have fared well this year, while others have been particularly badly hit.

2010 has been a good year for....

Ireland's funds industry

If 2009 was all about consolidation, the story of 2010 has been about improving confidence within Ireland's funds industry.

In recruitment terms, expansion has not been rapid, but most fund administrators - including State Street, BNY Mellon and JP Morgan - were hiring in the first quarter, and most firms have been adding to their ranks throughout the year.

The drivers for hiring were numerous - assets under administration reached a record high of €1.8 trillion in the second quarter; the rise in Newcits and other regulatory-driven products created a raft of new work, and the implementation of The Companies (Miscellaneous Provisions) Act 2009 is encouraging more hedge funds to domicile in Ireland, and has the knock-on effect of creating a greater volume of work for fund administrators.

To October this year, 9,017 people were employed in Ireland's funds industry - the highest figure since 2007.

Compliance professionals

At best, financial services professionals in Ireland have seen their salaries stagnate this year. At worst, within certain sectors such as corporate banking, pay packets have shrunk by up to €18k.

Which is why it must feel pretty good to work in compliance. According to recruitment sources, pay has increased by around 15% this year.

It's easy to see why - insurers continue to hire compliance staff as they battle with EU regulations such as Solvency II, while banks have been keen to add to their ranks despite ostensibly still enacting hiring freezes across the organisations.

There was also demand coming from the public sector, as the Central Bank of Ireland revealing plans to add 160 this year, including compliance staff.

According to recruiters, it's been offering some competitive packages to get the right people on board.

Loan workout specialists

Yes, new lending has largely ground to a halt this year, but let's not forget that AIB and Bank of Ireland already have a combined loan book of around €200bn.

The bulk of their commercial property assets have been shifted across to NAMA, a task which in itself has required decent sized teams on both sides of the fence.

Even Anglo Irish Bank, for instance, has a 92-strong NAMA team, while the 'bad bank' itself has set its sights on a headcount of 100 by year-end, largely to manage the huge portfolios the body has taken on.

Step forward the new hot skill-set - loan workout specialists. Despite overriding recruitment freezes, all of the Irish banks with a commercial loan book have been forced to recruit these people. This is largely on an interim basis, but with contracts of up to 24 months being offered, and the potential to earn €110k pro rata, it still seems like a good proposition.

And 2010 has been a bad year for....

Employment prospects in the banking sector...

With the City recruitment market indulged in vociferous recruitment in the first quarter of this year, having emerged bleary-eyed from a torrid 2009, banks in Ireland set the tone for how 2010 was set to play out.

Redundancy announcements from Royal Bank of Scotland and Bank of Ireland (Scotland) - which later retreated from Ireland entirely - preceded the implementation of Anglo's cuts.

Even before the EU-IMF bailout, rumours were circulating about the possibility of thousands of job cuts at Irish banks as they restructured in return for accepting state aid.

Bank of Ireland's 750 announced job cuts could be the tip of the iceberg, with the latest rescue plan destined to require significant downsizing within all domestic institutions. AIB has yet to roll out a redundancy plan, but is expected to do so before the end of the first quarter next year.

Migrating accountants

With Big Four accountancy firms in Ireland failing to offer roles to newly-qualified accountants in Ireland last year, and few firms willing or able to pick up the slack, they were always going to be relatively easy pickings for firms recruiting in the City - where there's an acute shortage of accountants.

Many UK recruitment firms have realised this, and have been luring Ireland's junior accountants across the Irish Sea with (shock) permanent job offers and more lucrative salaries.

Unfortunately, when firms in Ireland began recruiting accountants again in Q3, there were scarce supplies of talent available for these roles.

Of course, accountants are not alone in this idea - emigration has skyrocketed in 2010.

Corporate and commercial bankers

So, muted levels of new lending in the banking sector have, of course, meant that demand for corporate bankers remained in the doldrums. With most simply re-cooking existing loans, salaries (as we mentioned above), shrunk alongside new job opportunities.

Moreover, as we've alluded to, the skills being demanded are changing, with banks expecting a higher degree of analytical and quantitative skills, rather than it simply being about who you know.

There have been some signs of optimism, however. With international banks looking to fill the void left by domestic lenders, the latter had been taking people on to maintain their market presence.