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| Overall the outlook for recruitment in the financial services sector is promising writes Aileen Reede and she predicts healthy recruiting activity for 2003. |
Recruitment in 2002 began within a climate of caution in the aftermath of September 11th and the corporate scandals of 2001. However, the recruitment freezes and air of caution that followed were lifted in early 2002 allowing financial services recruitment to flourish at a steady pace throughout the year.
Confidence was regained as the year progressed despite severe strain on the global financial markets and overall global economic negativity. We witnessed constant recruitment throughout the year with the peak in quarter three continuing well into quarter four.
In particular, the funds industry has sustained its growth irrespective of the turmoil in financial markets. In Ireland, funds domiciled grew by 35 per cent and brought with it constant demand for professionals with experience in fund accounting, fund administration, transfer agency, trust & custody and related support staff. This trend is set to continue with projections for 2003 much healthier than 2002. The fund sector accounts for approximately 50 per cent of the employment in the IFSC.
Funds managed from the IFSC will continue to benefit from a complete exemption from tax on income and gains, which will no doubt contrive to attract fund administration companies to Ireland. The Central Bank of Ireland has also been streamlining the authorisation process to facilitate companies.
Within the investment banking sector, front office roles were practically non-existent in the first part of the year but we have seen activity in the smaller houses in the latter half. Fund managers and analysts, both quantitative and equity, have seen some market activity. We have also noted some solid activity by global private equity firms within the Irish private equity market. Redundancies within this area in London have ensured a constant flow of skilled candidates eager to return to Ireland with the necessary skills set. Some of the larger investment banks have plans to relocate more mid and back office functions to Dublin.
The IDA have also adopted a strategy to develop Dublin as a location for international asset management to attract more investment management front offices, moving away from the traditional association of back office business with Dublin.
The global insurance and reinsurance markets have been trying to recover after the devastating effect of September 11 which saw the worst ever year for underwriting losses in property and casualty insurance. The overall economic slowdown and dramatic falls in equity values have also had their toll. As a result of the above, the industry has seen huge investments of capital into insurance hubs such as Bermuda and the IFSC witnessing a growth in the insurance sector with more captive insurance companies locating to Dublin as a base to enable European penetration.
The number of captives setting up here has trebled this year bringing with it ever increasing demand for experienced professionals and support staff. The increase in migrants returning to Ireland with experience in international insurance hubs has been servicing these requirements. The IDA is committed to attracting pan-European life insurance companies to Ireland, particularly pensions, and it has been estimated that long-term it could create up to 6000 jobs domestically.
Dublin has also proven popular for issuers of asset-backed securities. Asset backed listings continued to show growth and the securitisation issuance market was on target to make 20 per cent growth this year.
Retail banks, both European and domestic, have gone through a period of restructuring and cost cutting and have been primarily recruiting in administration, support and sales. Risk, both market and operational, internal audit and compliance experience were also in demand in light of accounting scandals and new regulations within financial services and this is set to continue with the introduction of a new single financial services regulator. The stockbroking area has mirrored these recruitment patterns.
Within professional services, the accountancy profession has been the focus of a lot of unwelcome attention in
relation to accounting malpractice. There has been a slower, more cautious approach to recruitment. After a trend of consolidation and internal reorganisation, many of our clients in the professional services sector have adopted a ‘wait and see’ approach, while overall recruitment levels have risen it seems that professional and trainee recruitment levels have dropped.
The outlook
Recruitment in 2003 holds a considerable air of optimism for the financial services sector. Of all the industry sectors that were surveyed in the quarter four QSEP report, the financial services sector remained most optimistic with 37 per cent of companies expecting to recruit in the coming year.
Candidate expectations have also lowered to more realistic levels in relation to salary expectations and roles. The overall recruitment process is taking longer as our clients are spending more time and effort in selecting the right candidate. Graduates are finding it tougher and on average it is taking them three to four months to secure a job.
However, competition is tough and the skills’ pool is being continually nourished with candidates returning home from a variety of destinations with excellent international experience. Exposure to reinsurance and hedge/mutual fund administration is required and more specific product knowledge in areas such as special purpose vehicles, derivatives and asset-backed securities.
An attractive location
Ireland still remains an attractive location for companies in all areas of the financial services sector. Skilled human resources, lenient tax and now the introduction of the Irish Financial Services Regulatory Authority (IFSRA), which will centralise all financial services regulation, will be viewed in a very positive light from an overseas perspective. The outlook is promising with a small corporate tax rate increase to 12.5 per cent.
Fiscal incentives, having been approved by the EU, will continue until 2005 in the case of projects approved before 31 December 1999. Some operations will be eligible for the 10 per cent rate consistent until 2005. Overall the outlook is promising and most of our clients are predicting healthy recruiting activity in 2003. |
Aileen Reede is senior recruitment consultant at Robert Walters.
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| Article appeared in the January 2003 issue.
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