As the British compliance job market hots up, Edward Tully of the City recruitment firm of Robert Walters surveys the options for both hiring firms and candidates.

In compliance, both 'sell' and 'buy' sides of the recruitment market are very, very busy at the moment. Demand for people currently far outstrips supply. The pool of candidates is very small. The institutions that move quickly through the recruitment process therefore do better than the others – it is very rare for an applicant for a compliance job who receives an offer not to have more than one other offer coming through the pipeline.

The junior end

Where do new compliance officers come from? It is ironic that in such a frantic market the pool of candidates at the junior end is even smaller than elsewhere. Due to regulatory pressures, financial institutions cannot necessarily devote the time to give junior people on-the-job training; they usually want candidates with at least 80% of the necessary knowledge under their belts already. Young people usually come into compliance through internships. People with legal qualifications sometimes come in, as do people who have been through the Mountbatten scheme and other work experience initiatives.

Gamekeepers turning into poachers

Regulators provide another pool of new labour for the compliance job market. Reliable figures are absent, but it would not be entirely wrong to say that young regulators have often spent perhaps 3 years working for the Financial Services/Conduct Authority before leaving to earn better salaries in the private sector. Some say that the time between their joining the regulator as a recruit and the moment when the job market snatches them away is growing shorter as a result of the sheer demand for private-sector compliance officers, but this is not my experience. The difference in recent years is that the number of people in regulatory jobs who want to 'make the jump' into a financial services institution has increased. This is good in a way for the job market because it helps to raise supply.

One must remember that the regulators are recruiting more people these days as well, so the total pool of new entrants is increasing. They, too, are probing new areas in their search for competent recruits, looking especially for people from banks and asset management companies have first-hand experience of the inner workings of a bank or asset management firm from a compliance perspective.

This begs the age-old question that has bedevilled regulation since time began – how can a regulatory organisation that wants to recruit people from the financial services industry hope to compete with private-sector pay packages? The answer is that regulators are becoming more flexible, pushing pay upwards on a case-by-case basis in certain areas. This is a palliative, though, and money is typically an issue in every hire.

The joys of temping

What about temporary compliance appointments? I work on the 'permanent' desk at our firm and lack details but it is safe to say that the 'temp' area is continually busy. Contractors are paid daily and hourly rates and there is particularly big demand for such people in KYC ('know your customer' exercises) and the 'remediation' area (when a firm has to improve its compliance efforts in certain specific areas on the orders of the regulator).

Gender differences

Reliable figures about the male-female split between compliance people in the UK are not available. However, one set of figures that Robert Walters will be releasing soon shows a sample of compliance people of all ranks (including board members and CF11s) and the proportion there is 20% female to 80% male.

Crossing the Ts

Recruitment agencies such as ours do not help in the drafting-up of contracts for new compliance staff to sign – these are imposed on them by the banks they are joining. We do, of course, negotiate salaries. On occasion we negotiate other things in their pay packages such as pension benefits, the potential for bonuses and healthcare. Despite the fact that compliance people are increasingly open to prosecution or dismissal as a result of international (and especially trans-Atlantic) court cases, we have not yet been asked to negotiate D+O (directors' and officers') insurance cover for potential legal costs. This may happen in future, however.

Sectoral news

Private banking and family officers represent the quietest area for us at Robert Walters. This is true at both senior and junior ends of compliance, and so far I have not come across any explanation for it. Funds and hedge funds are the area where there is more recruitment, often at the more senior end but not necessarily involving controlled functions. Board-level compliance recruitment does not happen very often in our experience except, as we have said, in the fund area. Most board-level recruitment will be undertaken by specialist ‘search’ firms as opposed to predominantly contingent recruiters such as Robert Walters.

Aversion to risk

It is not entirely unusual for us to encounter someone who has performed a controlled function in the past, or who is qualified to do so, who would prefer a position where they are not exposed to legal liability and would prefer a job as a deputy MLRO or something of the sort. Compliance officers, after all, tend to be quite risk-averse people.

Sectoral divisions – not as rigid as you might think

Some of the lines between compliance work and other lines of work are blurred. There is a little bit of a cross-over (and quite a lot of job transfer) between compliance and risk, especially between operational risk and compliance monitoring. The skill-sets for these two areas are similar; people who are good at audit, testing processes and monitoring procedures often go from one to the other.

People who are good at audit are usually used for 'assurance' purposes – this has nothing to do with gathering evidence to satisfy a CEO that it is safe for him to sign an 'attestation letter' (an FCA initiative that began in 2013 to make top managers more accountable to the regulators); instead, such work happens at a more junior level and is primarily tasked with maintaining day to day compliance procedures within a wider compliance function. The command structure at most sizeable banks tends to go up from associate to AVP (assistant vice-president) to VP to director. Private banks and smaller funds/hedge funds in the City tend to be smaller in size and have more amorphous structures.

There is also a cross-over between compliance and legal jobs involving people who are focused heavily on regulatory rules. Legal people who work in this area are by no means necessarily formally qualified lawyers. Just a little legal experience of the financial regulatory world can allow someone to enter the world of compliance here. It is quite possible that a lawyer could make a successful cross-over into employment in compliance having only worked on one regulatory case, as long as that case was impressive.

The international market

One area in which the casual onlooker might expect to see growth is the movement of British compliance personnel overseas, especially to the common-law offshore centres in the Caribbean, the Gulf of Persia and the Far East as these centres grow and require the experties of the UK, which is the fount of so many rules, laws and compliance arrangements. Hong Kong in particular has seen a surge in compliance pay and opportunities recently. In fact this is not the case. The volume of compliance people going abroad and coming into the UK is static and always quite small. We have secured appointments for outsiders, mainly from the US, Europe and Dubai. We see the odd CV from the Caribbean, but this is rare and CVs from the Far East are even less frequent. Financial institutions tend to look for specific regional regulatory experience (e.g. SEC or FCA etc), and as such it can make it difficult for candidates when relocating globally as they can lack the required regional compliance knowledge in comparison to candidates already working within that region/market.

* Ed Tully can be reached on +44 207 509 8504