As predicted, the demand for internal auditors across the banking & financial services sector remained strong throughout Q3. Indeed, Q3 represented our busiest quarter of 2017. Job flow was up almost 50% on Q2, with the number of candidates actively looking up 24%. This in turn led to 78% increase in first round interviews.
As highlighted in the previous market update (Q2 report), H1 was dominated by hiring within the large British banks, with one bank in particular augmenting its audit headcount by circa 100 auditors. Perhaps, somewhat depleted in numbers the European and US institutions have reacted accordingly throughout the summer period. Equally, with the continued lack of clarity around Brexit implications, it seems these firms have now decided to press on with UK hiring regardless.
Most notable has been the shift away from bulk hiring at AVP levels to greater emphasis on recruiting VP level SMEs. The ratio of AVP to VP roles in Q3 was 2:3. Interestingly, many financial centres around the world seem to struggle attracting top SME audit talent whilst London retains its position as an SME hub.
The demand for risk & regulatory focused auditors has remained consistent throughout the year. Sought after skills in the third quarter were conduct risk, supervision, and overall regulatory expertise – be it benchmarks regulation, MiFID II and MiFIR, or even GDPR.
From a risk perspective, quant & model risk SMEs continued to be highly sought after. These roles have typically been filled with non-auditors making a first move into the 3rd line.
With continued changes in capital adequacy requirements, there has been increased volume of mandates centring on those with treasury, liquidity and ICAAP/ILAAP knowledge.
In a similar vein to H1, the focus within IT audit has been on attracting generalist IT auditors rather than separating out applications and infrastructure. Part of this has been driven by increased hiring within smaller institutions / smaller audit functions which simply don’t have the luxury of being able to separate into specialisms. This is not necessarily a bad thing as a more generalist approach can offer the opportunity for silo’d VPs in larger organisations to gain much broader experience across the technology audit domain.
When it does come down to SME knowledge, the focus areas have been cyber security & data analytics audit.
Technology risk recruitment has been focused predominately at the AVP level. Whilst this is still the case, a number of our clients have asked us to find more senior level candidates at both VP and Director levels. The reason, in part, is that many teams have now become too bottom heavy with AVPs and are lacking senior leadership.
Whilst this model is ideal for execution and delivery, many institutions are now rethinking their recruitment strategy and looking to bring more experienced hires who can provide greater strategic and leadership experience. This provides an excellent opportunity for senior manager-grade candidates who are looking to move into people management and development roles.
We are seeing ongoing requirements in niche areas such as information security risk and technology resilience which are key topics and fears at executive board Level.
The demand for IT audit professionals to move into the world of IT risk and vice versa is still an avenue that many banks are pursuing, especially at the mid-manager and AVP level. As long as the candidate has a good appreciation of risk management then the transition to IT risk is relatively straightforward.
Q3 represented Morgan McKinley’s first true quarter operating in this space. Whilst still too early to identify any discernible trends, it is clear that the investment/asset management sector has been pretty busy at all levels. The split between senior auditor and manager-grade positions was approximately 50:50.
The challenge at the more junior grades is identifying those candidates with sufficient experience and understanding of investment management processes. The senior end of the market has also seen plenty of movement with a number of recent appointments and movers at director and head of audit level.
Q4 should still see hiring across all levels, although, as we near the end of the year there will be the usual drop in volume as chief auditors firm up their 2018 audit plans, and associated staffing requirements. Indeed, in some cases these so called “freezes” already seem to be in place.