The latest market overview, role profiles and predictions for the Irish financial services sector...
The ‘Ireland Market Commentary Q1 2019’ looks at the latest market overview, role profiles and predictions for the Irish financial services sector.
The Irish financial services sector continues to go from strength to strength. Dozens of companies have made Dublin their EU hub as the UK prepares to leave the bloc, and this shows no sign of slowing down. Data from IDA Ireland, the state investment agency, suggest Brexit-related projects will create more than 5,000 jobs in an already accelerating economy and EY recently reported that 28 financial services groups have committed to relocate staff or operations to Dublin since the 2016 referendum, with Citigroup, Bank of America, Barclays, Legal & General and AXA among them.
Ireland’s central bank has also forecast an unemployment rate of 4.9% for 2019, approaching the level economists equate with full employment, but as a result, there is a growing skills shortage in a labour market transformed since the crash. Against this backdrop it is very much a candidate driven market and salaries are on the increase to attract top talent. IBEC, a business lobbyist, says employee turnover has returned to levels not seen since 2007 and the Government has forecast that wage inflation will accelerate to 3% this year from 2.4% in 2018.
However, Ireland’s central bank has also warned of “immense” economic threats from a no-deal Brexit, saying the “worst-case” scenario for Dublin was a disorderly UK departure from the EU. The bank said it foresaw huge damage to Ireland’s economy should political talks fail in coming months, adding that immediate turmoil in financial markets would come
in conjunction with a drop in consumer spending, disruption in ports and airports, and lower exports.
This has come alongside a stark warning to financial businesses from Michael Hodson, Director of Asset Management and Investment Banking at The Central Bank of Ireland, saying it will not provide an insurance policy to firms for “inadequate” Brexit planning. This seems to be a pointed observation to the substantial number of smaller financial services organisations who have yet to decide whether to just have skeleton staff on the ground in Dublin or if they need to bring across other functions.
Demand over the last 18 months has been consistent across compliance and distribution as newly established firms strive to demonstrate that they have substantive operations in Ireland ahead of Brexit. But we have also noted increased demand for roles across risk, investment analysis and portfolio management as the regulator continues to increase requirements for more robust risk frameworks and deeper regulatory expertise.
One of the biggest challenges new asset management entrants to the Irish market are exposed to when trying to build out their functions is attempting to mirror their UK structure for roles that are almost always in-house in the UK, but are performed by custodians or third party administrators in Ireland. For example, in the UK most performance analysts and client reporters work in asset management, typically in Ireland this is outsourced to the likes of
Northern Trust or State Street. This lack of in-house asset management experience further heightens an already competitive market.
Demand for PCF roles in compliance and risk has also been acute, with pre-approved candidates often able to choose from 4 or 5 options. To compound this, 3 months’ notice is standard at the senior end and with bonus season still in play, start dates are inevitably at risk of being pushed back until the summer. And the longer the process, the harder it is to keep candidates engaged and the greater the threat of counter-offers. As a result, organisations are under pressure to move increasingly quickly and become more competitive, not just in terms of remuneration, but focusing on other incentives such as flexibility, work environment and opportunities for career progression.
As the on-going Brexit negotiations continue to leave the majority of the financial services sector in uncertainty, many of the smaller asset managers and hedge funds have chosen to hold off making any firm choices and instead remain in this state of limbo, relying on Paris or London to pick up the slack before they are forced to make a decision.
But regardless of the outcome of Brexit, Dublin is going to experience substantial growth in the next 6 -12 months. Looking ahead, for any candidates thinking of returning home to Ireland, now is definitely the time to do so, especially across Risk or Compliance. In particular, candidates currently based in Edinburgh and Manchester looking for opportunities in Ireland will be able to capitalise on a significant increase in salary for comparative work. There is also movement in other spaces with fund administration in high demand as ever, which is set to continue as more fund administrators continue to expand their service offering in Dublin.
The latest review from The Central Bank of Ireland has shown an improvement in the number of female candidates for senior roles in financial services but acknowledges this is coming from a very low base, and more needs to be done. Data collected from the so-called “Fitness and Probity Regime”, which assesses potential candidates for senior roles to see if they are professionally competent and honest enough to hold such jobs, shows that overall, there has been an improvement in the number of female applicants for these senior roles, rising from 22% in 2017 to 24% in 2018.
Ed Sibley, deputy governor has announced the regulator is pressing bank boards to outline a “clear path” to improving diversity levels. Adding that “if diversity does not improve at senior levels, the Central Bank will have to consider whether further specific requirements should be introduced”.
BRUIN regularly assists clients with their gender diversity objectives and was recently awarded ‘Recruiter of the Year’ in the 2018 Women in Finance Awards. For more information on how we can assist in this area, please contact your consultant.
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Thanks to Stephen McManus of our partner firm BRUIN Financial (Ireland) for this excellent Ireland Market Commentary for the financial services sector for Q1 2019. For more market commentaries and insights visit www.bruinfinancial.com/insights.
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