Our Observations – change creates opportunities
The last 10 years in risk and compliance has been relatively stable at the senior levels with limited change in leadership. However, over the last 12 months, the Royal Commission along with the gaps appearing in risk and compliance practices has created change at the highest levels in organisations.
Rightly or wrongly, the initial drivers for change may have come from the dissatisfaction at board level. This has triggered a number of changes at the senior end of the market which in turn is driving recruitment activity through to the lower levels. In addition to this, organisations are realising that they are not adequately resourced. Some organisations are throwing money at the problem, however, there is little confidence that this will fix the root cause.
We would anticipate this momentum in the market to continue for the next 18 months to 2 years.
Candidates are aware of their demand and along with the potential increases in remuneration, they have a greater appetite to move. The better candidates are being recognised and rewarded and there is a greater effort to retain them.
Outside of remuneration, candidates are looking for flexibility, work life balance, good leaders and a commitment to risk and compliance from the top. They are being drawn towards customer centric organisations.
When sourcing candidates, traditional recruitment tools such as Seek and LinkedIn are becoming less effective in this market. For example, advertisements don’t differentiate and LinkedIn is reaching saturation. People are not paying attention to ads that do not differentiate. Given the demand for candidates in the current market, these ads are not engaging candidates as they use to.
We can provide a different angle to sourcing with over 70,000 hours of research and networking amongst the risk and compliance professions.
Commentary based on conversations with Chief Risk Officers and Heads of Risk & Compliance
We are constantly out there talking to CRO’s and Head’s of Risk and Compliance and these are some of their thoughts:
- There is still plenty of lip service for risk and compliance from the top and limited commitment to change from the broader leadership teams.
- There has been a call for diversity in backgrounds of candidates including engineers, change mangers, business exposure, cross-sector, industry experience, etc.
- Further down the track, data analytics may be the skillset in demand. This will develop a new breed of risk manager with a focus on systems and analytics. We would anticipate the mix of the team changing towards data analytics combined with fewer, highly skilled risk managers with a commercial bent.
- A number of CRO’s have nominated the following skills as essential
- Commercial acumen
- Ability to influence
- Business knowledge or curiosity
- Relationship building skills
- Technical skills seem to be a given
- Risk professionals should be able to articulate the vision and potential of good risk management to stakeholders. This is getting lost in all of the noise.
- There is a lack of depth of experience with candidates as everyone is accelerating up the ladder. As a response to the supply and demand imbalance, there is a greater appreciation for the more experienced candidate with energy as long as they will roll up their sleeves.
- As the accountability regime intensifies, there will be more senior risk and compliance executives considering to reposition or retire.
- There continues to be ongoing poaching of candidates out of the Big 4 and smaller firms using money as a driver. We have had reports of premiums of up to 30% for high calibre candidates.
- At the $100K to $130K level, the majority of hiring managers prefer candidates out of the Big 4. This is creating a mismatch in expectations as demand significantly outweighs supply. Also, a mismatch on the skills and capabilities.
- $220K to $250K – candidates are hitting a ceiling at this level as there is limited room to break through. We put this down the size of the market, volume of candidates, availability of roles and the relatively low turnover at the top.
- The Royal Commission has led to some of the larger institutions “indiscriminately” recruiting heavily. This demand has been another catalyst for inflation. Candidates’ expectations have risen and the rest are being forced to respond to match expectations.
- In the current environment, bonuses have taken a hit. However, the base packages of risk and compliance professionals have gone up. Salaries are trending upwards, bonuses are coming down. Our advice to candidates is to prioritise “positioning” over remuneration.
As the market is on the move, it is necessary to keep a closer eye on the remuneration of your valuable candidates relative to the market.
Paying at the midpoint is no longer working! If you aim for mid-point, be ready to compromise on quality!