Corporate Governance Recruitment Market Report 2016 Compliance are changing jobs and creating...

Corporate Governance Recruitment

Market Report 2016Compliance

Welcome to Barclay Simpson’s 2016 Compliance Market ReportBarclay Simpson has been producing corporate governance market reports since 1990. This year we are producing two reports. This one, summarising and analysing recruitment trends in the compliance recruitment market, includes an employer survey. Later in the year we will produce our compensation and market trends report, which will focus on remuneration and will again include a survey of compliance professionals registered with Barclay Simpson. Comparable reports exist for all other areas of corporate governance. They can be accessed in section 7 of this report (“About Barclay Simpson”) or at www.barclaysimpson.com

We place great value on the professional reaction to our reports and would appreciate your comments and any further requests for clarification or information.

BARCLAY SIMPSONMARKET REPORT

2016COMPLIANCE

01/ ExECuTIvE SuMMARY /102/ MARKET ANALYSIS /203/ MARKET COMMENTARY /304/ SECTOR ANALYSIS /405/ SALARY GuIDE /806/ EMPLOYER SuRvEY /1007/ ABOuT BARCLAY SIMPSON /21

OfficesLondonNew YorkDubaiHong KongSingapore

DisciplinesInternal AuditRiskComplianceSecurity & ResilienceLegalTreasury

CONTENTS

Strong economy aids compliance recruitment

The compliance recruitment market does not operate in a vacuum but remains substantially dependent on the economic environment within which it operates. Given this, there is much to be positive about. The uK economy presently employs 500,000 more people than it did a year ago and the financial services industry, and compliance in particular, has contributed more than other disciplines to this increase. Unemployment is now at a 10 year low and at levels last achieved before the financial crisis. Productivity and business investment are also finally increasing as the scarcity of workers focuses companies on how to use them more efficiently.

Quality the keyWith a growing and innovative financial services industry and an evolving compliance environment, where regulators are ramping up their powers and regulatory risk has cost the financial services industry billions, compliance skills should be at a premium.

This is not proving to be the case for everyone working in compliance. Regardless of the need to recruit, the financial services industry is no longer, if it ever was, simply looking to recruit additional compliance professionals. The industry’s needs are now being driven by the quality of the compliance resources it seeks to employ, not the quantity.

It’s tough to recruit This no doubt goes some way to explaining why, given increased recruitment budgets and salaries to match, 79% of compliance departments report they are finding it difficult to recruit. In our experience there is no shortage of compliance candidates per se, particularly given how the compliance recruitment market has grown. However, there is a shortage of the type of high calibre, experienced compliance candidates companies require if they are going to meet the regulatory demands being made of them.

A positive development for those working in compliance and other areas of corporate governance such as risk, audit and legal, is the way in which practitioners are increasingly able to move between disciplines. Whilst product and technical knowledge remain a key part of corporate governance recruitment, innate and therefore transferable abilities are becoming a greater part of the bargain. Judgement, communication skills and business savvy are not necessarily acquirable skills and are all the more valuable because of it.

2016 looks positive The outlook for the compliance recruitment market in 2016 is positive with only 12% of compliance departments reporting that it is unlikely that they will recruit externally. Competent compliance professionals entering the recruitment market, with realistic expectations, should not be disappointed. We should, however, point out that credit risk had also previously cost the financial services industry billions. Credit risk managers were then in the same position that regulatory risk managers are now. The world turns. There are now out of work credit risk managers.

ExECuTIvE SuMMARY01

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A positive development for those working in compliance and other areas of corporate governance such as risk, audit and legal, is the way in which practitioners are increasingly able to move between disciplines. .

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MARKET ANALYSIS02

VACANCIES

Breadth and depth of market is increasing The rate at which vacancies are being generated in compliance has started to fall as it finally had to. This is hardly a depressing development, particularly given that the number of people actually employed in compliance is still increasing. The fall in the number of vacancies simply reflects the rate at which compliance professionals are changing jobs and creating vacancies. Our survey found only 77% of departments (a still high percentage) reported they had looked to recruit externally in the last six months of 2015, against 86% in the equivalent period in 2014. Confidence going forwards appears high with 42% of departments, albeit down from 56% in 2014, reporting an increase in their recruitment budgets.

It is encouraging that both the breadth and depth of the recruitment market is developing. We noted in our last report that graduate recruitment and training programmes are becoming more common. Equally, the 3 lines of defence model is changing the background and experience of the type of candidates that companies are prepared to consider. Until recently the movement of people between the various disciplines that make up corporate governance was limited, it is now however steadily increasing. Potential candidate numbers are being positively influenced by the movement of people between compliance, risk, audit and legal.

RaTe of PlaCemenTs

Rate of placements has fallen back To provide a better insight into the dynamics of the compliance recruitment market, this graph plots the rate at which placements have been made across the last four years. The graph demonstrates the rate at which vacancies are being filled.

The rate of placements fell back in the second half of 2015. This might seem a little puzzling given the apparent need for companies to recruit and given the candidate pool available to companies is apparently growing. However, whilst the compliance recruitment market is buoyant, what companies expect from the compliance professionals they recruit, is also increasing. This is not unique to compliance and is apparent in other areas of corporate governance. Yes, there is pressure to recruit, but also pressure to recruit at the standard required and expected. Companies now expect more from their compliance functions and if recruitment was ever about quantity, it is now about quality. Compliance professionals who can demonstrate the necessary technical skills, career progression, stable Cvs, academic prowess and business savvy are in great demand. Those who cannot, are not. Companies are simply not prepared to compromise on the quality of compliance candidates they recruit. Given this, the recruitment market can be a frustrating place for both clients and candidates and, dare we say it, recruitment consultants.

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• Placement rate

• New vacancies• Outstanding vacancies

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MARKET COMMENTARY03

Management becoming personably liable

A particularly telling finding from our survey was that 68% of compliance departments reported that they were insufficiently resourced for the demands made upon them. This percentage has been steadily increasing. Clearly pressures are mounting and, whilst the financial services industry and particularly the banks have been beset by regulatory sanctions and fines, individual managers and decision makers have been substantially shielded from the regulatory consequences of their decisions. However, the Senior Managers Regime is shifting the responsibility on to the shoulders of those managers who make decisions. It is making them more compliance aware. They now actively look to engage and seek the support of their compliance functions.

Given they are now required to manage their regulatory risk, with the assistance of their compliance functions, their personal liability is here to stay. It might seem like an additional, and no doubt to some, an unnecessary burden for already stretched managers. However, the acknowledgement and management of personal regulatory risk is perhaps their best possible reassurance. The Senior Managers Regime is helping develop compliance from a passive to an active function. It is therefore perhaps not surprising when reviewing the results of our survey, that there is a shift in demand towards more experienced and higher quality compliance professionals.

Specific issues driving demandSpecific issues currently driving demand include MiFID II. Companies across all areas are preparing for the wide ranging impact this will have from client categorisation and conflicts of interest to recording communications and product governance. Whilst the EU had set January 2017 as the start date, given the demands it is making and the industry’s current state of readiness, it has now been delayed until 2018.

Regulatory engagement teams are continuing to grow along with fast growing regulatory developments teams. These teams are responsible for assessing the impact of upcoming regulatory initiatives and working with the affected areas to ensure they are ready. This impacts every area from policy teams to monitoring, through to the front office.

Demand for compliance expertise is being further driven by credit, debt management and payments companies as they fall under regulatory scrutiny.

Relocation to regional centres continuesCompanies are continuing in their longer term plans to relocate back office and associated compliance functions away from london and into regional centres. Whilst longer term this is no doubt sensible and will ultimately save costs, for some the immediate benefit is not quite so obvious and is proving to be a major challenge. Whereas the Central Belt in Scotland, the North West and West Yorkshire are already well established financial centres, other regions are not. Pushing into areas where there is a limited number of compliance professionals and where the

concentration of expertise simply does not currently exist, results in vacancies going unfilled or alternatively companies having to pay London equivalent salaries to attract candidates with the necessary skills and experience.

Employers promoting career progressionWe reported last year that the media inspired notion that everyone in compliance was benefiting from significantly higher salaries was somewhere wide of reality. Whilst there is no unrestrained boom in salaries, compliance candidates with in demand skills who are in short supply, continue to attract significant salary increases. Given this, there is recognition within the industry that some of the really significant increases in remuneration that attract the headlines cannot continue. Our survey found that whilst only 21% of respondents reported salaries to be excessive and beyond their budgets, just 14% reported them to be reasonable and generally affordable. In response companies are keen to sell the longer term benefits of progression, senior level engagement and the quality of work they are able to offer. In reality this is not always successful as there will usually be another company who will offer all of these things together with a higher salary.

We also reported in our compensation report last year that bonuses were broadly flat in 2015 when compared to previous years and this is likely to continue. Influential opinions within the industry do not view bonuses (as they are currently paid) as enhancing performance and are more likely to promote a short term view of what constitutes success.

SECTOR ANALYSIS04

BANkING

This section covers retail and wholesale banking.

Banking remains the dominant source of demand for compliance professionals given the sector perceives regulatory risk as a costly threat. Demand remains robust. The biggest challenges faced by the banks this year include structural reform and resolution; integration of new institutions; data and regulatory reporting; culture and treatment of customers; and competition and innovation.

The impact of structural reform and the necessity for increased data and regulatory reporting is having the greatest impact on big banks. A number have reorganised their risk and compliance teams and have created roles straddling both disciplines. Banks seem to be looking to create an environment where the correct frameworks and controls are in place to sit alongside their desk based monitoring teams. They need to demonstrate a cultural shift towards understanding and embracing compliance as a central pillar of how a bank operates. The right level of risk appetite is determined and then frameworks are put in place to ensure it is not exceeded. They are now actively managing risk rather than working after the fact.

new institutions are starting to have an impact. Challenger banks are the most obvious examples but the growth of consumer credit companies cannot be overlooked. These businesses are able to offer broader roles and more senior management interaction than their larger bank counterparts. Given their size, the compliance professionals they employ do not specialise in given areas.

For many compliance professionals they are offering some of the most interesting roles currently available. There is a regional bias to where these roles are based and salaries are generally lower. However, those seeking a broad role where a real impact can be made are often attracted. The regional issue is tempered by the larger established retail banks being the major proponents of the regional exodus from London. For those banks who are required to ring-fence their retail operations, there are some who are physically ring-fencing their operations and this has resulted in entire operations being relocated to the regions.

The treatment of customers continues to be a key issue. Conduct risk has become a particular focus in wholesale banking where there is a shortage of experienced compliance professionals with the necessary expertise.

Innovation has been most heavily led by transactional banking, payments and cash management. There has been a surge in demand for those who understand the products and distribution channels as well as those with an appreciation of the plethora of fin-tech driven on-line and mobile based payment methods. This spans both retail and wholesale banking.

A further development is the more centrally co-ordinated global approach from the largest banks. They are seeking a common standard and then tailoring their approach to meet the demands of specific jurisdictions. This is perceived as an efficient and cost effective method as opposed to a more expensive regime whereby compliance departments in different jurisdictions work in isolation. Whilst the overall plan is to ultimately reduce the number of compliance professionals, demand is being created as global teams are put in place.

The impact of structural reform and the necessity for increased data and regulatory reporting is having the greatest impact on the bigger banks. A number of banks have reorganised their risk and compliance teams and have created roles straddling both disciplines.

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InVesTmenT

This section covers asset management, wealth management, private equity and hedge funds.

Demand for compliance professionals from the sector remains strong given it is under increased regulatory scrutiny. As the industry has grown, there are asset managers and even funds that have become systemically important. A large fund or manager reallocating their portfolio now has a potentially destabilising effect on the wider market.

Currently, the key regulatory concerns centre on ensuring fair and orderly markets, and establishing an appropriate level of legal and regulatory protection for retail consumers. The industry is also facing value for money questions and the way it charges clients, as well as ensuring that client assets are protected against threats. Given this, those with knowledge of the Conduct of Business Sourcebook (COBS) and Client Assets Sourcebook (CASS) are well placed. The Retail Distribution Review (RDR) has continued to have an impact on charges and value for money, requiring closer scrutiny on the distribution channels for getting many products to market. Those with a good understanding of this area will also continue to be in demand.

Although the recommendation from ESMA, (the European Security and Markets Authority) that the implementation of MIFIDII should be delayed from 2017 until 2018 has been acepted, the Directive is currently at the forefront and the issue of greatest concern within the investment industry.

many investment companies do not yet have a central regulatory reporting team in place but are planning to

establish one imminently. Investment companies generally have different levels of reporting depending on their wider business model and regulatory requirements. Currently, a large proportion of asset management, private equity and hedge funds rely on their sell-side counterparts to report all trades to the FCA or other regulators. under MIFID II they will need to report their own trades, resulting in additional work for compliance and traders. Given this, we anticipate that companies with smaller compliance teams, or even standalone compliance officers, will look to expand their compliance resources.

Compliance professionals who possess the necessary combination of soft skills, technical expertise and the ability to engender the right compliance culture are widely sought. Larger companies in the sector continue to mimic banks in terms of specialism and in adopting the 3 lines of defence model. However, given the high number of smaller companies operating in the sector, they are most likely to recruit ‘generalists’ who can take on multiple responsibilities. It makes these roles attractive to compliance professionals who enjoy variety.

maRKeTs

Accountability and transparency are currently driving recruitment. Reputations are vital and companies in the sector wish to demonstrate that they are serious about regulation and compliance. This has resulted in an increase in Compliance Advisory and Transaction Reporting / Trade Surveillance roles. Demand for candidates is often product sensitive and sourcing candidates with the necessary level of product experience and soft skills can be problematic. Fx and rates have been two

of the most in demand product areas.

Smaller trading companies and market facing banking compliance teams appear to have a significant appetite for compliance professionals with prior front office experience and a ‘poacher turned game keeper’ mentality. This is driven by a culture where compliance is expected to build effective working relationships with front office brokers / traders and really understand the pressures and issues they face. Compliance candidates with that background understand the environment and have the necessary product knowledge.

There is also currently demand for compliance professionals with knowledge of FCA and PRA reporting e.g. EMIR, CRD Iv, COREP. Candidates with a good understanding of both sides are rare, but it is a model many companies are moving towards.

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Compliance professionals who possess the necessary combination of soft skills, technical expertise and the ability to engender the right compliance culture are widely sought.

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INSURANCE

Demand from the insurance sector continues to be steady. Mergers and acquisitions within the sector have prompted some moves, but generally these have not been too disruptive.

As compliance becomes more well established within the sector, companies are becoming more likely to structure their compliance on traditional 1st and 2nd lines of defence. This has resulted in many companies splitting existing teams into Advisory and Monitoring sub teams. This can be problematic and many insurance companies appear to be recruiting at more junior levels and adding to existing teams.

as regulation is becoming more specific, there is also demand for experienced 1st line compliance advisory professionals to support specific lines of business. At this level companies are more likely to focus on softer skills than specific knowledge of business lines, allowing compliance professionals to move across businesses.

There is also a push within the sector to focus on conduct risk and conduct of business. As this is a fairly new area, companies are often more open-minded with regard to the backgrounds of candidates they will consider. This currently includes those from other areas of the financial services industry and the consultancy sector.

fInanCIal CRIme

The recently released 2015/16 FCA Business Plan has pinpointed Financial Crime as one of its five “forward looking

areas of focus” for 2016. It is the only new area of focus for the FCA and therefore it is not unreasonable to assume there will be continued pressure on the banks to ensure that financial crime functions and controls are fit for purpose.

As a result of the increased levels of regulatory scrutiny, financial penalties and resulting high workloads, financial crime teams continue to grow. New roles are being created across the financial services industry. Specifically, many small / mid-size companies are now looking to recruit dedicated financial crime specialists, rather than have their existing compliance generalists cover the AML, Sanctions & ABC issues and controls.

There has been a noticeable pattern of demand for candidates who have both subject matter expertise and additional complimentary skills. Strong IT implementation, system improvement and even auditing skills, together with the necessary technical knowledge and understanding of financial crime are highly sought after. Candidates with specific financial crime qualifications are at an advantage in the recruitment market, with the ICA Diplomas and certificates in AML & Financial Crime the most highly regarded.

We are also seeing a greater need for experienced financial crime professionals to sit in first line of defence roles. These individuals are conducting vigorous, enhanced due diligence on more complex structures to ensure PEPs are identified, SARS are reported and full sanctions screening is completed. Findings are then passed on to be investigated further.

Given that terrorist financing has become a pivotal area of financial crime, we anticipate the recent terror attacks and resulting political pressure will only further enhance the efforts put into counter-terrorist

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As a result of the increased levels of regulatory scrutiny, financial penalties and resulting high workloads, financial crime teams continue to grow. New roles are being created across the financial services industry.

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financing across the financial services industry during 2016.

Consultancies are continuing to grow their financial crime advisory and assurance practice areas. The FCA has also been active, recruiting a number of experienced and graduate level professionals into their growing financial crime functions, focussing on the FCA’s enhanced AML supervision strategy.

THe ConTRaCT maRKeT

We reported last year that the compliance contract recruitment market was slower than we had anticipated and the results of our survey suggest that overall companies are becoming marginally less reliant on contractors. However, our present experience is that the level of demand for contractors remains buoyant.

Financial crime continues (together with cyber security) to represent a major concern and is driving demand for compliance contractors with AML and associated experience, from contract KYC analysts to senior advisory and interim MLRO roles.

The Lloyd’s insurance market, both syndicates and agents, is currently providing a number of contract opportunities. This is a positive for those working in the sector, although we are uncertain whether this is the result of regulatory demand or simply a need to maintain compliance delivery.

Smaller retail financial services groups have looked to recruit senior compliance contractors with FCA authorisation experience. This appears in some cases to be providing assistance with post-submission

questions following unexpected resignations or other absences in compliance teams.

Although most companies have carried out their policy and process work in relation to the Senior Managers Regime (SMR), the additional monitoring and reporting burden, as well as the continued defining and embedding of conduct risk, is likely to increase work for compliance teams and lead to additional resourcing requirements.

one consequence of the smR is that, for some senior compliance professionals, the increased risks and responsibilities involved is making their positions less attractive. It is a contributory reason why some Heads of Compliance are choosing to give up permanent positions and looking to work as contractors.

Given that it has, up until recently, been a major source of contract roles, the asset management sector has been subdued other than for niche ad-hoc roles focussing on approved persons and financial promotion review.

Most compliance contractors work on a daily rate basis via limited companies. However, more companies are seemingly looking to engage contractors on a PAYE fixed-term basis. This may be driven by their desire to reduce costs. It is not popular with contractors. The most sought after ones will decline to work under such terms and it will therefore reduce the pool of contractors that will consider such opportunities.

The outlook for the contract compliance recruitment market in 2016 currently looks positive.

“One consequence of the Senior Managers Regime (SMR) is that... the increased risks and responsibilities involved is making their positions less attractive. It is a contributory reason why some Heads of Compliance are choosing to give up permanent positions and looking to work as contractors.

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SALARY GuIDE05We reported in our Salary Guide and Compensation Survey six months ago that the average salary increase achieved by compliance professionals changing jobs and those staying with their existing employer had both increased. Salary increases from changing jobs were up from 20% to 21% and up from 7.3% to 8.3% for those staying with their existing employer.

The 8.3% increase for those who stayed is flattered by promotions or buy-backs; where those who hand in their notice are counter offered with a higher salary to stay.

Both percentages are high in relation to other areas of corporate governance. as we have previously made clear, averages hide a wide range of outcomes. There are compliance professionals who in some circumstances move for little or no increase and others who in any given year receive no increase from their existing employer. However, there are examples, which unfortunately some in the industry and media then assume to be the norm, of very significant increases.

Given that only 21% of respondents to our survey found salary demands to be excessive, there is no unrestrained boom in compliance salaries. However, there is a focus on the quality of compliance professionals who are recruited. Although they still expect value for money, many companies are prepared to

accept that recruiting high quality compliance professionals will be expensive. In our experience, if they are prepared to compromise on the suite of experience and abilities they are seeking, they are unlikely to pay for the privilege. The compliance professional concerned may simply be pleased to receive an offer.

In 2016 we anticipate that compliance professionals with in-demand skills will remain in a strong bargaining position. Some individuals will achieve significant salary increases. However, as the compliance and wider corporate governance recruitment markets continue to grow and regulatory fatigue eventually sets in, they may well become less common.

Salary guidanceBarclay Simpson analyses the salary data that accumulates from the placements we make in the uK. This provides a guide to salaries for compliance professionals.

The salary ranges quoted are for good, rather than exceptional individuals and take no account of other benefits in addition to the salary that usually accrue in the compliance market.

Barclay simpson will release a Compensation and market Trends Report in July that will include more detailed information on salaries.

WHolesale BanKInG & CaPITal maRKeTs RANGE AVERAGE

Compliance or Financial Crime Assistant £40 – 55,000 £50,000

Compliance or Financial Crime AvP £50 – 80,000 £65,000

Compliance or Financial Crime vP £85 – 130,000 £100,000

Compliance or Financial Crime Director £100 – 170,000 £130,000

Head of Compliance or MLRO £140 – 250,000 £190,000

Global Head of Compliance / Financial Crime £190 – 300,000 £250,000

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asseT manaGemenT, HedGe fUnds oR PRIVaTe eqUITy RANGE AVERAGE

Compliance or Financial Crime Assistant £30 – 50,000 £40,000

Compliance or Financial Crime AvP £50 – 70,000 £60,000

Compliance or Financial Crime vP £65 – 95,000 £80,000

Compliance or Financial Crime Director £95 – 140,000 £120,000

Head of Compliance or MLRO £110 - 160,000 £130,000

Global Head of Compliance / Financial Crime £120 - 250,000 £180,000

WealTH manaGeRs oR PRIVaTe BanKs RANGE AVERAGE

Compliance or Financial Crime Assistant £30 - 45,000 £40,000

Compliance or Financial Crime AvP £45 - 65,000 £60,000

Compliance or Financial Crime vP £60 - 90,000 £75,000

Compliance or Financial Crime Director £90 - 140,000 £120,000



GeneRal InsURanCe RANGE AVERAGE







ReTaIl BanKInG, lIfe & PensIons and moRTGaGes - ReGIonal RANGE AVERAGE






ReTaIl BanKInG, lIfe & PensIons and moRTGaGes - london RANGE AVERAGE






As we did last year, we have included the results of our recently completed employer survey in this, our 2016 Market Report.

The results include some interesting conclusions and cover:

uRecruitment budgets

uCurrent recruitment needs

uskills / qualities / experience most in demand

uViews on availability and salary expectations of candidates

uKey recruitment drivers in 2016

uRecruitment intentions for 2016

Our survey of employers covered not only compliance but also internal and IT audit, risk management, security and legal. Respondents were individuals with responsibility for recruitment who were asked questions designed to elicit their perspective on the recruitment market.

As a result, in addition to providing specific findings for compliance, we are also able to make comparisons with the broader picture across corporate governance.

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Contents1. Key conclusions from compliance employer survey

2. Compliance survey results

3. Broader context – (comparison with other areas of corporate governance)

EMPLOYER SuRvEY 2016COMPLIANCE

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key conclusions

The demand for compliance professionals remains robust and it is clear that companies are determined to recruit against higher standards than ever before. This is perhaps not surprising given the demands that are now being made by companies on their compliance departments. Competition for staff is intense and companies report broadly based difficulties in attracting and recruiting compliance professionals at the standards they require.

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Pressure on resources mountingu68% of managers report their compliance department is

“insufficiently resourced for the demands made on it” (up from 55% )

Increase in recruitment budgets stalling u42% of managers report an increase in their recruitment

budget (down from 56%)uAsset and wealth managers most likely to have reported

an increase in their budgets

Level of activity remains high u77% of compliance departments recruited or attempted to

recruit in the last 6 months of 2015 (down from 86%) uRecruitment broadly based across all sectors

Market conditions remain challenging u75% of managers report compliance professionals difficult to

find (up from 71%)u79% of managers report they are finding it difficult to recruit

(down from 81%)

Required technical skills the most difficult to find u62% of managers report that finding compliance

professionals with the required technical skills is the greatest challenge, against 38% reporting interpersonal skills

uBoth technical and interpersonal skills remain vitally important

Salary expectations high but generally affordable u21% of managers report salary expectations excessive and

beyond their budget (down from 24%), with 79% considering expectations affordable or within their budget

More experienced compliance professionals are being sought u45% of managers are likely to recruit compliance

professionals with over 5 years’ experience (up from 27%) uOnly 11% are likely to recruit compliance professionals with

less than 2 years’ experience

Recruitment industry remains principal source of candidates u75% of managers report that recruitment consultancies are

their principal source of candidatesu13% of managers are now reporting internal recruitment is

their principal source of candidates.

External resources remain widely used u18% of departments report routinely using external

resources to help achieve their departmental objectives (up from 17%)

u52% will use for specialist skills uOn balance no evidence that departments will become

more reliant on external resources

No let-up in demand for 2016 uOnly 12% of managers report they are unlikely to recruit in

2015 (down from 13%)

successful recruitment is a major challenge

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Employer survey results

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Increased pressure on resources

Q - Do you feel your department is sufficiently resourced for the demands that are made on it?

Level of activity remains high

Q - Have you recruited, or attempted to recruit, externally in the last 6 months?

demand

Recruitment budgets now less likely to increaseQ - Has your recruitment budget increased in the last year?

(Question not asked in 2013)

Just 12% unlikely to recruit in 2016Q - What are your recruitment plans for 2016?

Candidate availability

Good candidates hard to findQ - How would you rate the availability of candidates?

Increasing demand for higher levels of experienceQ - When recruiting, what level of experience are you most likely to request?

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Real difficulty in recruitingQ - Overall, have you found it difficult to recruit?

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Q - What has been the greatest challenge?

Q - In order of significance, what are the key considerations when deciding to progress a candidate to offer stage?

Consideration Weighted average 2013

Weighted average 2014


Technical suitability 5.0 4.6 5.1

Interpersonal skills 5.1 4.8 5.0

Cultural fit 4.5 4.3 4.1

Perceived desire to work for the Company / Department 2.8 3.7 3.1

Professional & educational qualifications 2.2 2.7 2.7

Input from HR 1.4 1.4 1.5

Technical skills hardest to find

Recruitment resourcesMore departments recruiting internally

Q - What is your principal source of candidates?

Q - To what extent do you rely on external resources to achieve your departmental objectives?

External resources remain important

Q - Do you anticipate your reliance on external resources changing?



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It is encouraging that both the breadth and depth of the recruitment market is developing.

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other findings

Sector experience still keyQ - In your experience, where are you most likely to recruit from?

Salary expectations high but affordableQ - What has been your perception of candidate salary expectations?

Business growth likely to be key recruitment driver

Q - In order of significance, which will be the most important recruitment drivers in 2016?

Factor Weighted average 2013



Business growth / development 3.8 3.5 3.6

Replacement recruitment 4.1 3.7 3.5

New regulation 2.6 3.2 3.4

New products 2.0 2.1 2.5

Business as usual 2.5 2.6 2.1

Diversity and inclusion targets rareQ - Do you have any diversity and inclusion targets that may influence your recruitment decisions?


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3Broader context Rest of results

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The following tables compare the results from compliance departments with those from internal audit, risk, security & resilience and legal. Certain figures have been highlighted to make it quicker and easier to spot key differences.

Departments generally under-resourced

p As was the case last year, a high percentage of companies in all disciplines report being under-resourced

p Resourcing problems highest in Compliance and Security

p With the exception of risk, where more budgets are decreasing than increasing, budgets are increasing in all other disciplines

p The most significant increases are in Compliance and Internal Audit

Q - Do you feel your department is sufficiently resourced for the demands that are made on it?

Recruitment budgets increasing in most areas

p Around three quarters of companies across all disciplines have recruited or tried to recruit in the last six months

p Highest level of recruitment in Compliance

High level of recruitment across all disciplines

Q - Have you recruited, or attempted to recruit, externally in the last 6 months?

Q - Has your recruitment budget increased in the last year?

demand

Area yes it has increased

No, it remains the

same

No, it has decreased

Compliance 42% 49% 9%Risk 21% 56% 23%Internal Audit 40% 51% 9%Security 33% 58% 9%Legal 41% 43% 16%

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Candidate availability

p Candidates difficult to find in all disciplines

p Greatest pressure in Compliance

p Least pressure in Risk and Security

p Around 70% of all companies found it difficult to recruit in 2015

p This figure rises to nearly 80% in Compliance

Good candidates remain difficult to find

Successful recruitment even more difficult

Q - How would you rate the availability of candidates?

Q - Overall, have you found it difficult to recruit?

Area Plentiful Generally available

difficult to find


p Whether for replacement, or newly created positions, a high level of activity is planned for 2016

p In Security and Legal, 91% of respondents expect to recruit in 2016

High level of activity planned for 2016

Q - What are your recruitment plans for 2016?

Area likely Replacement UnlikelyCompliance 48% 40% 12%Risk 24% 59% 17%Internal Audit 36% 49% 15%Security 59% 32% 9%Legal 45% 46% 9%

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p 3 or more years’ experience is key in all disciplines

Experience remains major factor in recruitment

Q - When recruiting, what level of experience are you most likely to request?

Area < 2 years 3-5 years 5-7 years 7-10 years > 10 yearsCompliance 11% 44% 26% 10% 9%Risk 5% 32% 41% 18% 4%Internal Audit 6% 62% 19% 11% 2%Security 5% 32% 31% 26% 6%Legal 7% 59% 17% 15% 2%

Key requirements

p As was the case last year, technical skills are the greatest challenge in recruitment across all disciplines

p Interpersonal skills remain important, particularly in Internal Audit and Security

Technical skills still most important

Interpersonal skills key to making offers

Q - What has been the greatest challenge?

Q - In order of significance, what are the key considerations when deciding to progress a candidate to offer stage?

(Please note that the legal results have been adjusted to match other figures as the legal survey didn’t include the HR option.)

Area Technical suitability

Interpersonal skills

Cultural fit keenness qualifications HR input

Compliance 5.1 5.0 4.1 3.1 2.7 1.5Risk 4.6 4.4 4.0 3.3 3.0 1.6Internal Audit 4.5 4.6 3.7 3.1 3.2 1.8Security 4.9 5.4 4.2 2.8 2.8 1.4Legal 4.9 3.7 3.6 3.0 2.8 -

p When it comes to progressing to offer stage, interpersonal skills become more important in all areas apart from Legal

p They are now more important than technical skills in Internal Audit and Security

p Technical suitability is the key in Legal

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p With the exception of Security, recruitment consultancies are the main source of candidates

p The use of recruitment consultancies is highest in Compliance, possibly a reflection of the recruitment pressures departments are facing

Salaries generally affordable

Recruitment consultancies still main source of candidates

Q - What has been your perception of candidate salary expectations?

Q - What is your principal source of candidates?

Area excessive more than anticipated

Reasonable


Area Internal recruits

direct advertising /

referrals

Internal team / direct

sourcing

Psl of RECs

Range of consultancies

Compliance 13% 3% 9% 53% 22%Risk 30% 3% 13% 46% 8%Internal Audit 10% 8% 13% 51% 18%Security 23% 4% 24% 42% 7%Legal 6% 7% 19% 53% 15%

Recruitment resources

Salaries

p Broad agreement that salary expectations are generally affordable

p Least concern in Risk and Internal Audit

p Greatest concern in Compliance and Security

ABOuT BARCLAY SIMPSON07Barclay SimpsonBridewell Gate, 9 Bridewell PlaceLondon EC4V 6AWTel: 44 (0)20 7936 2601Email: [email protected]

If you would like to discuss any aspect of the reports please contact the following divisional heads:

Corporate Governance Adrian Simpson [email protected] & IT Audit Daniel Flynn [email protected] Matt Brown [email protected] Tom Boulderstone [email protected] Mark Ampleford [email protected] Jane Fry [email protected]

To discuss our international services please contact:Europe Tim Sandwell [email protected] East Chris L’Amie [email protected] Pacific Russell Bunker [email protected] America Daniel Close [email protected]

Barclay Simpson is an international corporate governance recruitment consultancy specialising in internal audit, risk, compliance, security & resilience, business continuity, legal and treasury appointments. established in 1989, Barclay simpson works with clients in all sectors throughout the UK, europe, middle east, north america and asia-Pacific from our offices in london, new york, dubai, Hong Kong and singapore.

We add value by using our unique focus on corporate governance, our highly experienced specialist consultants and access to both the local and international pools of corporate governance talent. our strength lies in our ability to understand client and candidate needs and then to use this insight to ensure our candidates are introduced to positions they want and our clients to the candidates they wish to recruit.

for more in-depth coverage, comprehensive reports and compensation guides exist for the Internal audit, Risk, security & Resilience, Compliance and legal recruitment markets. These can be accessed from the links below. We also produce other specialist reports, each of which can be accessed for free on our website: www.barclaysimpson.com

www.barclaysimpson.com/internal-audit-market-report-2016www.barclaysimpson.com/risk-management-market-report-2016www.barclaysimpson.com/compliance-market-report-2016www.barclaysimpson.com/security-and-resilience-market-report-2016www.barclaysimpson.com/legal-market-report-2016

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Corporate Governance Recruitment Market Report 2016 Compliance are changing jobs and creating...

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