Job market still poor for risk professionals

Redundancies, mergers and a shift away from complex structured products meanthe job market in risk management is still tough, with little hope for improvement.

"There's been no great change since 2008," said Dean Spencer, a recruiter with the London-based headhunting firm Barclay Simpson. "We are seeing more candidates than ever before, and there is little sign of the market loosening; some employers are hiring, but it's too early to say whether that's significant."

The number of new risk management vacancies has fallen 60% since 2007, according to a report published earlier this year by Barclay Simpson, and new posts are attracting crowds of applicants: "We had 85 CVs for two risk management jobs recently," commented Oliver Ottey, a manager at the London recruitment consultancy Goodman Masson.

It's no surprise, recruiters say, that investment banking is a particularly dry well for jobseekers. "We expect investment banks will be quiet for the rest of the year. They've been virtually at zero since last summer," Spencer says. "Fund managers are doing a bit better, but some of the big fund managers are losing a lot of business and are cutting headcount in risk." Despite this, a small minority of banks - those least affected by the crisis - are still hiring aggressively, however, including Barclays Capital and HSBC, according to Ottey.

In particular, the collapse of the structured product market means risk managers and derivatives professionals in this area are having to move to the flow business or leave - RBS is one of many banks cutting jobs in structured products, following its strategic review earlier this year, which recommended it leave several of the more dangerous product areas.

Salaries have also been hit. Ottey said: "Two years ago, you would expect 20% or 30% increases [on changing jobs]. Some people are still able to get pay rises, but there has been an overall reduction - now we're seeing 10% or 20% for strong candidates, or even zero." The Barclay Simpson report says the average increase has fallen steadily from 24% in mid-2007 to 15% at the end of 2008.

Many employers are also cutting bonuses and raising base salaries in an attempt to retain staff - a move that, in the case of UBS, has "priced some people out of the market", Ottey added. With low expectations of bonuses, too, many banks find they no longer have to offer a bonus to secure the candidates they want - while the salary bands are the same as a year or two ago, new hires are now further down the bands, or are better qualified, than would have been the case in 2007 or 2008.

However, the picture is not completely bleak for risk managers planning to change jobs: the imminent introduction of the European Solvency II regulations means insurance providers and accounting firms will be keen to hire risk managers with the right experience, recruiters say. Brokers, too, are continuing to hire risk managers: "It's better than it was 12 months ago," said Neil Dunnigan, a senior consultant at City recruitment company Hays. "Brokers are seeing higher volumes and they are paying more attention to their hedging strategy."

Are there signs of recovery in the hiring business? Not so far, most recruiters believe. "We might look for an improvement in the second quarter... some banks have conservative hiring plans for Q2, but nothing rash," Dunnigan commented. Ottey added: "We've seen a slight increase in the past few weeks, but it could easily be a false bottom."