Risk Management Today
Market insights
Credit Risk:
· Credit has slowed significantly, but there are still roles being advertised. There are a few roles available in counterparty credit, corporate credit and some roles in the restructuring space.
· The feeling is the longer this downturn lasts, the greater the impact will be in the credit space as defaults rise. This is likely to lead to increased demand for credit risk managers, but this is yet to materialise.
· Candidate availability remains good in some areas and more challenging in others, particularly at the AVP level where there have been shortages for some time.
· Credit risk quants remain in relatively high demand and the number of roles in the market has held up well. Candidates remain in short supply.
Operational Risk:
· Many of the new roles being advertised are the first line of defence. Market volatility is testing control processes and systems, business facing risk managers with an asset management background and strong product knowledge have remained in relatively strong demand compared to other parts of the market,
· Post Covid-19, we anticipate a growth in demand for operational risk managers with business resilience experience.
· Candidates who have broad experience across Operational and Enterprise Risk, combined with both 1st and 2nd LOD experience continue to remain attractive to employers.
· Effective monitoring and controlling of business risks presents a major challenge for risk managers who are working from home during the Covid-19 Lockdown. Many risk managers are also involved in the planning for the eventual returning to office based work.
Liquidity Risk / Treasury
· Treasury functions are very busy.
· September regulatory deadlines for Resolution Directive pushed back a year meaning some reduction in number of contractors working within this space.
· Particular hiring focus around liquidity and markets.
· Despite high workflows, several banks have placed live roles on hold (due mainly to cost pressures and logistical challenges of interviewing and onboarding). Regional roles seem to have been affected.
Market/Investment Risk
· 50% Reduction on roles due directly to Covid-19
· Coding skills becoming more important; Python is fast becoming a pre-requisite on coding experience rather than VBA
· Clients are moving faster on recruitment processes to snap up the strongest candidates
Contract/Interim
· Contract demand has slowed significantly, with a number of firms pressing pause on their projects and analysing who they currently have, who they are likely to need in the future and for how long.
· This could mean that when firms are ready to hire contractors, they will have done a comprehensive review of their hiring needs and will be going to the market for the right people at the right time. This could create future demand for certain SME contractors all at once (eg. to conduct work place risk assessments, beef up operational resilience frameworks or work on credit restructuring).
· The usual churn that we see this time of year after bonus pay outs has not really happened. This has caused a reduced demand for contractors to replace in the short term. This could change quickly further down the line.
· IR35 deferral at this point in time has done little to increase demand for contractors. If permanent roles continue to go unfilled because of logistical issues, combined with uncertainty in the market then firms may look to harness a short term contractor via the traditional route.
Challenges in a Covid-19 environment
· Almost half the global workforce – 1.6 billion people – are in “immediate danger of having their livelihoods destroyed” by the economic impact of Covid-19, the International Labour Organization has warned.[1]
· The latest official figures show that 950,000 people applied for the main income support benefit – universal credit – between March 16 and March 31, up from the 100,000 applications typically made in any two-week period. To put that into perspective, applications for jobseeker’s allowance rose from 46,000 in February 2008 to 82,000 in the following year. [2]
· Despite the lower number of roles in the market, our clients are still interviewing; We have seen a steady stream within a 5% margin quarter on quarter for the last year. Anecdotally, our clients that need to hire, are hiring successfully. Companies are coping logistically with the challenges of hiring remotely and onboarding remotely. Since Lockdown has began our company has seen 36 individuals successfully start in their new roles albeit remotely. Onboarding process have been created using primarily digital tools and remote collaboration.
· Q1 is traditionally the quarter with the largest number of new candidates registered due to bonuses being paid. Similar to every first quarter of the year, the company has registered a large number of new candidates in Q1 2020, however only 6% more than the average for the last 5 years. Candidates are not flooding the market desperate for jobs.
· Interestingly one of the most affected areas of the market is recruitment itself. Whilst Barclay Simpson find itself with less volume than we have had in past quarters, we still have our experts in place to support our clients rather than generalists trying to cover multiple markets offering clients less value.
· The new normal: As a result of; Video Conference, interviews and more flexible diaries, we have found that interview processes have sped up and become more efficient. Companies no longer have to adhere to booking schedules for meeting rooms and candidates who are not on the trading floor are far more capable of taking our calls. Barclay Simpson has retained our experts in your markets to ensure we are the best governance recruitment firm to support you in your hiring needs.
For further insights please contact:
Interim, Risk & Treasury
Chloe Bailey
Market, Credit, Operational & Quant Risk
Antony Berou
Liquidity Risk & Treasury
Katy Quicke
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