With financial institutions expanding their European operations following Brexit, the market for risk managers has become highly competitive.
Faced with an increased likelihood of financial companies exiting Britain, regulators in Europe have begun hiring risk specialists to prepare for the influx and have started stretching staff budgets and salaries.
Financial giants, including Citigroup, Goldman Sachs and Morgan Stanley, all of who have sizezable operations in London, intend to expand their European operations following Brexit. According to officials, Germany’s financial regulator, Bafin, as well as the French and Irish central banks, intend to hire dozens of new recruits in the coming year.
Similarly, the European Central Bank, which has an overall responsibility for supervising banks, is also on a hiring spree.
“We are seeing a lot more competition in hiring people for risk, in both the public sector and the private sector,” said Nigel David, a head-hunter at Charles Levick in London. “You are seeing salaries shoot up.”
As per Ireland’s central bank, it has set a target of boosting the number of its employees by by nearly 10% this year, this relates to hiring 170 more people.
Earlier in July, Philip Lane, the governor of the central bank, spoke of hiring challenges in an interview to a newspaper.
“Any regulator in a major financial center, I‘m sure the Bank of England or the New York Fed have similar challenges, there is always going to be the issue of how to compete with the other opportunities,” said Lane.
The majority of its employees earn in the range of 25,000 euros and 75,000 euros ($90,400), with the starting salaries for risk managers being around $52,600.
The central bank recently approved the creation of 26 new posts to deal with the “increased workload post the Brexit referendum”.
With Britain set to depart by April 2019, banks are on a clock and are beginning to migrate from London.
This is hugely significant, since it will provide European regulators greater say over global financial matters and are still dealing with the fallout from the 2007-2009 financial crisis.
As per a survey conducted by Barclay Simpson, a recruiter, salaries for European market risk specialists start at a modest $52,600 (40,000 pounds) and peak above 400,000 pounds for top managers.
In comparison, Daniele Nouy, the ECB’s top regulator, earned just $335,300 (278,000 euros) last year.
As per a headhunter, the typical candidate, for a risk management job, would have a degree in maths or physics to help spot the risk in a mortgage default, for example. An experience in retail banking is also a big plus.
“Risk is a very competitive market,” said Liam O‘Mahoney, of head-hunter Eames Consulting in London. “It’s going to be very difficult for a central bank to attract people.”
The ECB, which has an annual budget for policing banks of more than 400 million euros, is seeking to hire contractor risk specialists at daily rates of 1,000 euros – plus expenses, said people familiar with the program.
A spokeswoman for the ECB declined to comment.
“It’s international,” said one employee. “The work is interesting. And unlike the private sector, people here work 41 hours a week.”