As the first quarter of 2021 comes to a close, we reflect on what has overall been a very busy hiring market for Risk professionals. With the Brexit deal concluded, and uncertainty around hiring in the context of the global pandemic seemingly now a thing of the past for many firms, January saw a blistering pace set in the Risk jobs market, across all levels of seniority and industry types within Financial Services. As such, candidates have had an abundance of roles to consider when they have made themselves active.
One particular hiring trend of note in Q1, across both buy and sell side firms, has been an appetite to bring on board Climate Risk and ESG skillsets.
Given the issues caused by the pandemic to the financial services markets, and the continuing desire for sustainable and ethical investments from investors, sell-side firms and investment vehicles must incorporate this as part of their risk framework. Candidates are keen to understand how they can transition in this space, and we have been advising on the desired skillsets required to make the move. We are investigating the possibility of building on the successful ESG series of industry forums Bruin ran in late 2020 by running a webinar focusing on climate risk – please get in touch if this topic could be of interest to you.
Bonuses, as always, have dominated the Q1 candidate agenda. There have been some big names, particularly on the sell-side, in the past few months which have disappointed in terms of variable comp paid to Risk professionals, who themselves have been stretched to the hilt in the last 12 months.
Whilst there was only ever likely to be a detrimental impact to bonuses as a result of the pandemic, there is a feeling in some quarters that firms have used this as an excuse to cut costs in spite of strong performances overall. Invariably, this will lead to an increased hiring appetite in Q2. We have a salary survey document which can be shared on request if you’d like to compare your compensation with the industry benchmarks.
Buy Side Risk
There was a strong appetite across both asset managers and hedge funds to hire fixed income focused Investment Risk professionals in Q1, particularly at the junior/mid-level. It was not uncommon to see candidates involved in multiple hiring processes at the same time, especially those with strong coding abilities. Firms certainly had to move processes forward quickly to secure individuals from this background.
From an Operational Risk perspective, there was a continued demand to hire candidates for ICAAP/reporting focused positions due to regulatory demand. One challenge in recruiting for such positions has been a perception from the candidate field that the roles are quite narrow in scope, and so we have been advising firms to consider adding stakeholder management and RCSA responsibilities to these. We are also seeing a desire for candidates who come from technology/information security risk backgrounds to come into the more traditional Operational Risk world.
Sell Side Risk
Q1 saw a strong appetite to hire in the Market Risk space, with a particular focus in fixed income, credit and macro focused roles at the mid/senior level. There has been a more active candidate market in this sector than in previous years, as a number of banks have decided to relocate their trading desks away from London post-Brexit, and there has been fierce competition on both client and candidate side of the hiring market. We have also seen a significant amount of hiring in the Liquidity Risk space, particularly within the T1 banks.
From an Operational Risk perspective, there has been a significant trend to hire candidates with business continuity and operational resilience experience, particularly within smaller international subsidiary banks. Candidates with experience of dealing with third party vendors are also in high demand. Most of these roles have been for candidates at the junior/mid level, and have come about as resilience responsibilities have been moved under the risk umbrella and need to have people dedicated to this on a full time basis.
We have also seen demand from a number of trading firms to hire at the CRO/Head of Risk level recently, and with mandates having been completed we expect this to continue into Q2 as the candidates move firms.
Hiring on the buy in the Credit space tended to be concentrated across the infrastructure and project finance space, with a strong appetite to hire senior professionals who are used to measuring potential risks in such endeavours. We have also seen a trend for Credit Research professionals in demand to be those who have diversified into a particular sector (EM/HY/IG etc) rather than a generalist coverage.
On the sell side, roles have tended to be concentrated more on the retail side of Credit Risk, and candidates with experience of managing Risk inherent with credit cards/payments and mortgage products in high demand. We have also seen increased demand for candidates with experience measuring Credit risk in the Real Estate markets.
Diversity in Risk – Hiring Diverse Talent in Candidate-Short Markets
Over the course of the first quarter, we have taken on a number of mandates where clients have specified a diversity requirement in the candidate shortlists. The benefits to this request are clear; the hiring managers and company will get the chance to see candidates from a broad spectrum of backgrounds, who will approach challenges and business objectives in different ways, thus allowing for the firm to hire the best candidate for both the job at hand and the growth and development of the organization.
Providing diverse shortlists for roles is not always an easy task, particularly in more niche markets where there are less applicable candidates with the essential experience required to perform in the jobs straight away (roles concentrated at the more senior and technical ends of the Risk market tend to be of this nature). It is therefore very important that firms are mindful of the approaches made to candidates in these areas, many of whom will likely know each other through industry dealings, as getting this wrong can be catastrophic for the reputation of the business and the potential for attracting diverse talent in the short and long term.
Engaging with a sole agency on hires with a diverse shortlisting requirement will allow firms to keep control of the narrative that goes out to the candidate market, and ensure that the candidate ecosystem isn’t potentially damaged. We have observed a number of examples over the years of candidates being approached about the same positions on multiple occasions by a variety of agencies, often with very different stories about the provenance, seniority, progression potential and compensation on offer. You also risk getting into agencies fighting for ownership of the same candidates, which puts the candidates under unnecessary pressure over the role before an interview has even been arranged. This reflects extremely poorly on the hiring firm, as the opportunity loses its scarcity appeal and becomes confused. Where one agency is engaged, you keep control of who gets approached, the nature of the approaches and the narrative of the role.
Bruin’s Risk team have helped a number of our clients complete senior diverse hires on an exclusive or retained basis, and are an award-winning agency for our work in Diversity and Inclusion in Financial Services. We would be delighted to discuss with you how we can facilitate hiring for you in Risk Management and other verticals on this basis.