H1 Market Update 2024 - Compliance, Risk & Financial Crime

2024 H1 Overview

The first half of 2024 saw a mix of fast and slow market activity. The year began with a strong start as unfilled hires from 2023 carried over into the new year. However, as we approached bonus season, the market experienced a slowdown. Activity picked up again afterward, notably in the regulatory compliance sector. New entrants to the Irish market, and firms looking to grow their Irish presence played a part in this demand, however most of what was seen was replacement hires, indicating minimal market growth.

Compliance

The early stages of 2024 saw a significant demand in the compliance sector for PCF positions, driven by firms replacing outgoing heads in response to new market entrants. As Q1 progressed into Q2, newly hired PCFs sought to augment their teams, and the demand for both Compliance Managers and Senior Compliance Officers (in the €55,000-85,000 range) increased. Throughout Q1 and Q2, 60-70% of the opportunities presented to Coopman were at the Senior Compliance Officer level or above. The majority of these opportunities were in the asset management and insurance sectors, encompassing both life and non-life insurance.

Attracting talent at this level has proved challenging, due to full employment in the market, and what we have dubbed a ‘mismatched market’. In this environment, company and candidate expectations are often not aligned, particularly regarding salary, hybrid working policies, and career progression. This misalignment has deterred many candidates from making career moves. The mismatch has often seen clients favouring less experienced candidates, who align with their budget, rather than providing scope to bring in more experienced professionals. This trend highlights the difficulties in balancing financial constraints with the need for experienced talent in the compliance sector.

Risk

H1 in the risk market has been relatively quiet, contrasting with the significant activity we have seen in previous years, especially in operational and financial risk. Risk related roles we have seen this half account for only roughly 25% of all roles, compared to roughly 75% for compliance related roles.

Through conversations in the market with Chief Risk Officers, and Heads of Risk, it appears that most firms feel that their risk teams are well equipped, with no current need to augment or add additional resources currently.

Q1 of 2024 showed a slight increase in demand financial risk professionals, as well as third-party risk professionals, namely within the insurance sector. While firms currently feel fully equipped and are preparing for new regulations like DORA, it remains to be seen how this readiness will hold up in practice. From our market conversations, we expect to see a demand for both operational and third-party risk professionals to increase as we move further into H2 of 2024.

Financial Crime

The demand for financial crime professionals as a whole has been relatively low in H1 compared to previous years. Most activity has been seen within the web3 and crypto sectors, driven by new entrants into the Irish Market. There has also been activity within banking and payments.

Some notable large firms, especially in the payments sector, have seen redundancies or restructuring, resulting in a significant amount of talent re-entering the market. However, hiring companies are often looking for candidates with specific industry experience despite the transferable nature of AML and financial crime skills. For example, e-money institutions prefer candidates with EMI experience over those coming from banking or other sectors.

Key Themes

1.Bonus payments

Bonus season in 2024 produced a range of outcomes for employees depending on their company and sector. Generally, we witnessed bonus payments fall roughly 20-30% compared to previous years, with some firms cutting bonus payments entirely. This reduction has prompted many candidates to return to the job market in search of new opportunities that better align with their financial expectations.

2. Salaries

At the senior end of the market, salaries have remained consistent with the levels we saw in 2023. This has deterred some candidates from making what could be considered a “lateral move”, as there is no financial incentive for them to do so.

In terms of salary increases for professionals making a move in their career, we have seen salary increases of 6%-20%, with the average being about 15%. However, market conversations reveal that expectations for moving are often inflated, with candidates looking for increases of 25-35% on their current salary. This has led to a mismatch of expectations between employers and employees.

3. Hybrid Working Model

With some firms returning to a 5-day in-office week while others maintain a hybrid structure, two distinct trends have emerged regarding candidate preference. In a recent poll conducted by Coopman, 75% of employees expressed a preference for a Hybrid working structure (e.g. 3 days in office), while 25% were happy to be in the office 5 days, provided there was flexibility in their hours. Through conversations, we have found that for employees working and living in Dublin or nearby, flexible working was preferred, whereas commuting employees favoured a hybrid model. It is important for companies to align with their candidates expectations, and to provide solutions that work for both parties.

4. Incoming regulations

With new regulations, such as IAF and SEAR, market conversations reveal that candidates are more aware than ever of their defined responsibilities. While many are looking to make a move, if the defined responsibilities of a role appear unclear, or under resourced, then conversations are not being entertained at initial stages. It is important for firms to have a clear definition of the responsibilities for a given role and confidently present this to candidates to attract talent.

If you require guidance regarding your ongoing resource planning and addressing the ongoing demands, please get in touch with Consultant, Eoin Hurley at [email protected] or at +353 86-067-6377.