Redundancies, reduced recruitment, restructuring: Weren't risk roles supposed to be safe?

Risk jobs were a comparatively safe haven during the financial crisis and hiring was healthy last year, but that's all changing as banks reduce recruitment and even make a few layoffs.

"Vacancies are substantially lower. The number of roles with some banks has halved in the last six months. All areas of risk have been affected," says Sandra Rowlingson, divisional manager, risk management and data analytics, Bluefin Resources. Extra levels of sign-off are required to approve new jobs, she adds.

Toby Aikins, client advisor, Marshall McAdam, reckons there are about 30 to 40 per cent fewer risk openings than a year ago. Firms are dealing with regulatory changes by internally restructuring their existing teams, rather than taking on new staff, he adds. "Because of cost pressures that the banks are facing, there just isn't much hiring going on."

Cuts

Rowlingson has seen redundancies in operational risk and compliance in the last two months. Aikins agrees: "The view from banks is that there are too many overpaid risk professionals, especially in operational risk."

According to another headhunter, who asked not to be named, ANZ has made small-scale "selective" redundancies. "It's nothing very dramatic. But a few veterans are going as the bank tries to put downward pressure on compensation."

Aikins says salaries for new risk vacancies have already fallen across the banking sector. Senior management pay is down about 30 per cent on a year ago, while junior and mid-level pay has decreased by about 10 to 15 per cent. "I haven't seen any credit risk roles over $200k for a long time."

Hope for next year

Rowlingson highlights the expected forthcoming comprehensive credit reporting legislation as bringing in "huge changes from a regulatory perspective".

Aikins predicts that the rules will prompt firms to step up hiring in the second half of next year. "It won't be that easy because it's brand new legislation, so no one has the exact experience, but banks will ideally look for people with quantitative backgrounds who have worked closely with the regulators."

In the meantime, there's always...

Consulting firms, which are still hiring heavily in risk, will sometimes consider candidates from banks, says Aikins. The challenge, however, is whether these professionals can transition from steady middle-office banking workplaces into more competitive, client-facing jobs at a consultancies.

"You don't get a stack of work handed to you like at a bank. You have to be more self sufficient. Consultancy roles are only right for a certain type of candidate with a certain type of personality," adds Aikins.