Taylor Root Australia - Compliance & Operational Risk Salary Survey 2011-12

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Read our latest compliance and risk salary survey for Australia.

Read our latest compliance and risk salary survey for Australia.

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  • 1. Australian compliance & operational riskMarket update & salary survey 2011/2012 In association with Risk Managementtaylorroot.com.au
  • 2. Australian compliance & operational risk: Market update & salary survey 2011/2012IntroductionWe are delighted to present the Taylor Root Australian Our survey is reflective of the quality of information that wecompliance & operational risk: Market update & salary survey are able to collect and once again input from our clients andfor the financial year 2011-2012. from the broader compliance market was excellent from both a quantitative and qualitative perspective. Data covers bothThis is our sixth annual survey and we thank Risk Management Sydney and Melbourne and the non financial services sector,magazine for their fifth year of continued support. Given our otherwise known as the “corporate compliance market”.ambition to enhance and improve the survey each year, for Compliance and risk roles in this corporate sector are almostthe first time we also include data for compliance and risk exclusively in the most heavily regulated industries such asroles outside of the banking and financial services sector. telecommunications, pharmaceuticals and energy. This is an emerging market and data, unsurprisingly, can be irregularOnce again, this year’s data and market commentary is and random.drawn from in-depth research and input from the Australiancompliance and risk community. In excess of 1,200 key We continue to receive very positive feedback from ourcontacts of Taylor Root were invited to contribute via an clients and the broader compliance and risk community to ouronline questionnaire and thanks goes to those clients and survey which, we understand, is used as a reference pointcandidates who took the time to volunteer much valued for many salary reviews and initial salary offers during theinformation. In addition, we have been able to draw from recruitment process. The survey is the only one of its kindfirst hand experience and involvement in hiring decisions, which is specific to the Australian compliance & operationalrecruitment trends and remuneration levels throughout the risk market.last 12 months when working with clients and candidatesalike. As always, feedback is welcome and will hopefully result in positive changes being made for future publications.In comparison to our previous market report, the last 12months has seen a relatively stable employment market forcompliance and risk professionals with the majority of clientorganisations returning to profitable performance, some evento near pre-GFC levels of return. This is in stark contrast tothe uncertainty hanging over the financial services sector as David Buckley Amanda Athertonwe headed out of the worldwide downturn during the latter Partner Directorhalf of 2009. Salary and recruitment data from the last 12 Taylor Root Taylor Rootmonths is discussed later in the report.David BuckleyPartnertaylorroot.com.au
  • 3. Australian compliance & operational risk: Market update & salary survey 2011/2012Market overviewTrendsThe last 12 months, as was predicted in the previous review, their compliance and risk teams which seems a more realistichas seen a steady flow of compliance and risk roles “come figure based on current hiring patterns. These organisationsto market”. Unlike the past 2 years, there has been little cite an equal mix of improved business activity and thevolatility in the numbers of open job vacancies due largely obligation to comply with specific regulatory requirements,to a healthier Australian economy and few obvious shocks as the reasons for growth.to the labour market. Many banking and financial servicescompanies took advantage of new headcount hiring approvals The balance of organisations predict “no change” in numbers.at the beginning of 2010 and recruited significantly. This,in turn, led to less frenzied hiring and more consistent andsteady recruitment throughout the remainder of 2010 andinto the first half of 2011. We do not see this changing overthe next 12 months.Whilst we saw very few compliance and risk roles disappearthrough redundancy during the financial year, there stillremains some not insignificant challenge to secure headcountapproval to recruit. This is particularly so at those organisationswith a parent company headquartered offshore and typifiedby the investment banking community. A prolonged approvalprocess is often still required before job offers are forthcomingand fixed term contracts or temporary appointments are stillbeing offered to circumvent this arduous process. As a relatedpoint, our survey reveals that during the last 12 months, justshy of 50% of clients experienced some form of headcountfreeze at some point in time.“...just over 50% (of clients) ended the year with the same sized team as they started.”In comparison to previous years, approximately 40% of ourclient organisations reported a net increase in the size of theircompliance and risk teams during financial year 2010-11.Only 8% actually decreased in size compared to 60% lastyear. The majority of organisations, at just over 50%, endedthe year with the same sized team as they started with. Theseresults are reflective of the strong activity in the recruitmentmarket in early 2010 when much recruitment took place,together with a steadily improving economy resulting inconsistent levels of hiring over the last 12 months.In relation to future hiring plans (2011-12) it is interestingto review and compare last year’s results when only 28% ofclients predicted they would be increasing the headcount oftheir team. At the time, we viewed this as a very conservativefigure given the wholesale redundancies of 2008-2009 andindeed, as the figures above show, this figure was closer to50%. For the next 12 months, approximately 25% of clientorganisations predict they will increase the net headcount intaylorroot.com.au
  • 4. Australian compliance & operational risk: Market update & salary survey 2011/2012Financial services CorporatesThe continued interest in ensuring strong corporate Although small by comparison to the financial services sector,governance at Board level, particularly within the banking we have recruited for a number of non-financial servicesand financial services sector, and developments in a variety organisations i.e. corporate compliance roles. Typically theseof new financial and regulatory requirements for market roles have been newly created and either represent theparticipants has maintained the high profile position for Chief company’s first dedicated risk position or is in addition to acompliance and risk officers. Senior risk and compliance sole risk or compliance officer. Heavily regulated industries“leaders” must now be professionally qualified, highly credible such as pharmaceuticals and telecommunications haveand commercial with the ability to contribute and “hold their recruited such in-house expertise. Further, we have seenown” with the most senior of internal stakeholders. large publicly listed companies that offer financial services or financial products as an adjunct to their core business alsoThe Australian regulatory bodies recruited steadily over the recruit in the space to comply with licensing obligations.last 12 months but certainly not at the same volume aspreviously seen during and just post-GFC. As the financial Corporate compliance roles, not surprisingly, are oftenyear progressed, the majority of hiring into the regulators was secured by candidates from the banking and financial servicesreplacement recruitment where a compliance professional left sector. This reflects the lack of specific industry compliancethe regulatory body typically to take a role with a commercial experience available and the expectation that sector specificorganisation. Regulatory experience gained with ASIC, APRA “up-skilling” can be achieved quickly and relatively easily. Weand AUSTRAC is still highly regarded, as is strong product and believe that this hiring trend will continue in the corporatemarkets compliance experience gained with ASX. compliance market. “...“Big 4” accounting firms are also increasingly active” Although there remain some organisations who still attract “negative press” for their compliance culture, this figure isUndoubtedly, we have seen growth in the numbers of falling each year. In general compliance professionals, nocompliance contract staff being employed partly for reasons longer tolerate an anti or non-compliant culture and thosementioned above but also to perform specific project work. companies who suffer from this stigma do suffer in attemptsThe advisory and consulting arms of the “Big 4” accounting to attract the best candidates. Regulatory breaches can nowfirms are also increasingly active and are recruiting in be “big ticket” items and very newsworthy, with reputationalanticipation of greater levels of engagement from clients with risk increasingly being managed proactively.less cost constraints than in previous years. Amanda Atherton Directortaylorroot.com.au
  • 5. Australian compliance & operational risk: Market update & salary survey 2011/2012 Supply & demand It is remarkable to think that only two years ago virtually all compliance and risk recruitment ground to a standstill. In reality the lull in demand for staff really only lasted for around nine months and since September 2009, a sense of normality has returned to the recruitment market. As mentioned earlier, the last 12 months has seen a steady if unspectacular supply of roles in the compliance and risk space. The most obvious difference between the boom markets of 2005-2008 and the post-GFC period is the reduced number of job opportunities available to a candidate at any one point in time. Although candidates with strong compliance and risk experience are still in short supply, your “average” risk professional may only have one or two roles to consider compared previously with up to five or six client organisations all seeking the same skillset. Together with this more limited choice for candidates, this changed market has largely had a calming effect on salaries given clients have not needed to enter into a bidding war to secure their preferred candidate. The shortage of high calibre candidates on the open market can largely still be attributed to (i) the pre-existing chronic supply-demand imbalance created over the last 7-8 years since financial services licensing commenced (ii) the relatively small number of candidates returning from global financial markets such as London, New York and Hong Kong with relevant compliance skills. In comparison to previous years, there has been a definite lack of senior roles on the open market. This is due in part to less lateral movement at the top end and hence the limited “merry go round” effect which results, but also due to improved succession planning. Internal promotions to Head of/or equivalent positions are more common than ever before. These internal promotions simply would not have been possible seven or eight years ago given the then relatively shallow talent pool of compliance professionals and the small size of in-house teams to select from. Respondents cited the two biggest recruitment challenges to be (i) the underlying lack of quality experience at junior and mid-levels and (ii) the retention of top talent caused by willingness of compliance staff to move for financial gain. It comes as no surprise that clients see the lack of available talent as being a constraint given the general challenge of sourcing quality candidates. Perhaps, however, the willingness to move roles for a modest increase in remuneration is a reflection of the lower salary reviews seen over the past few years.taylorroot.com.au
  • 6. Australian compliance & operational risk: Market update & salary survey 2011/2012Remuneration & benefitsWith the more favourable market conditions and improved financial health of most financial services and banking organisationsover the last year, salaries and bonuses improved in line accordingly. The majority of salary increases were modest, however,and we are unlikely to see the huge annual salary increases and job offers of pre-GFC days for the foreseeable future.Headline points to note from the last 12 months can be found below: Base salary changes Base salary changes• 45% of respondents increased base salary levels by up to 4%• 25% of respondents increased base salary levels between 5-9%• Just over 15% of clients increased base salaries by more than 10%• Circa 15% of respondents did not increase base salaries at all I• In comparison to last years review when in excess of 65% of clients noted a I I “zero” increase, almost all salary freezes have been lifted and the ability to N reward has improved• Specialist roles e.g. AML and sanctions officers have attracted a small premium• Little evidence of sign-on bonuses or guaranteed bonuses• No real obvious pattern of bonus payments to report other than almost all clients Increase up to 4% now offer bonus potential to their team Increase between 5-9% Increase more than 10% No increaseAs mentioned earlier, although there is still somewhat of a supply-demand issue for talent, it is unusual for a “bidding war”to take place to secure the preferred candidate. Equally, given the fewer number of open vacancies, significant annual payincreases are no longer used as a primary retention tool.Investment banking compliance salaries and total remuneration packages continue to lead the market with asset and fundsmanagement compliance roles also rewarding well.Brian RolloManagertaylorroot.com.au
  • 7. Australian compliance & operational risk: Market update & salary survey 2011/2012 Bonuses Almost every client (just over 90%) now at least offer a discretionary bonus or capped value bonus depending on specific performance criteria. The actual monetary value of bonuses is very difficult to accurately report on as wide fluctuations do exist between subsectors and even within each team. Clients did report, however, that any bonus payment is equally dependent on company and individual performance. Traditionally, senior compliance staff at the 10+ year level expect to receive at least 50% of their base salary as bonus in investment banking, institutional funds management and some consumer/retail finance organisations. In recent years, on average we believe this figure has likely dropped to something around 30-40% level. Some organisations, typically those larger multinational banking and finance groups, have moved away from providing this as “all cash” and have introduced cash and equity payments which vest across a number of years to encourage less perceived risk taking, greater accountability and retention. Due to significantly less demand and few senior roles on the open market, sign-on and guaranteed bonuses have become extremely rare. Our expectation is that future salary reviews will be similar to this years review. Other points to note on additional benefits: • More than 50% offer health or life insurance • Circa 70% of clients offer either free or discounted gym membership • Almost 50% of respondents offer part time or flexible working arrangements for current team members Additional points to note • Although across the broader compliance market salaries continue to increase, generally there continues to be significant discrepancies between sub-sectors and even between companies within the same specialist market. For this reason, and due to differing interpretation or definition of the same role between organisations, the salary bands can appear very wide. For example, the most senior compliance role at a large international fund manager with 10 reports, plus some regional responsibility, will be remunerated higher than the same role title in a small, domestic, single asset class manager • We assume that financial services organisations will fall into one of three categories based on size and range of operations in Australia. Large organisations will typically remunerate at the top end of the range, medium sized at the mid-point and smaller at the bottom end of the scale. However, with the growth in the “boutiques” this typical pattern can be reversed • Figures refer to salary packages inclusive of superannuation but exclude bonus and other benefits • AML roles are generally remunerated at the same levels as the equivalent compliance and risk professionals by years of experience For specific advice on salary levels and benefits or for a discussion around any of the points and figures in the survey, please contact one of our compliance teams (details at the end of this document).taylorroot.com.au
  • 8. Australian compliance & operational risk: Market update & salary survey 2011/2012The salaries - SydneyInvestment Banking Title Oganisational type Experience (typical) Salary range (AU$) Head of compliance/risk Tier 1 10+ years 315,000 - 490,000 + Tier 2 10+ years 250,000 - 325,000 Deputy head of compliance/risk or equivalent Tier 1 10+ years 260,000 - 310,000 Tier 2 10+ years 190,000 - 280,000 Senior manager Tier 1 6+ years 175,000 - 230,000 Tier 2 6+ years 135,000 - 200,000 Manager Tier 1 4+ years 125,000 - 165,000 Tier 2 4+ years 115,000 - 155,000 Analyst 0 - 4 years 75,000 - 125,000Retail Banking/Consumer Finance Title Experience (typical) Salary range (AU$) Head of compliance/risk 10+ years 290,000 - 445,000 Deputy head of compliance/risk or equivalent 10+ years 145,000 - 295,000 Senior manager 6+ years 140,000 - 195,000 Manager 4+ years 105,000 - 135,000 Analyst 0 - 4 years 65,000 - 110,000Insurance Title Experience (typical) Salary range (AU$) Head of compliance/risk 10+ years 190,000 - 240,000 Deputy head of compliance/risk or equivalent 10+ years 150,000 - 200,000 Senior manager 6+ years 120,000 - 150,000 Manager 4+ years 90,000 - 130,000 Analyst 0 - 4 years 60,000 - 95,000taylorroot.com.au
  • 9. Australian compliance & operational risk: Market update & salary survey 2011/2012Funds Management Title Oganisational type Experience (typical) Salary range (AU$) Head of compliance/risk Large, international 10+ years 275,000 - 390,000 Smaller, domestic 10+ years 195,000 - 255,000 Deputy head of compliance/risk Large, international 10+ years 175,000 - 230,000 or equivalent Smaller, domestic 10+ years 160,000 - 190,000 Senior manager Large, international 6+ years 145,000 - 185,000 Smaller, domestic 6+ years 130,000 - 175,000 Manager Large, international 4+ years 110,000 - 135,000 Smaller, domestic 4+ years 90,000 - 130,000 Analyst 0 - 4 years 65,000 - 115,000Distribution/Financial Planning Title Experience (typical) Salary range (AU$) Head of compliance/risk 10+ years 180,000 - 230,000 Deputy head of compliance/risk or equivalent 10+ years 135,000 - 175,000 Senior manager 6+ years 105,000 - 140,000 Manager 4+ years 100,000 - 125,000 Analyst 0 - 4 years 60,000 - 90,000Corporate Compliance Title Experience (typical) Salary range (AU$) Senior 8+ years 125,000 - 200,000 + Mid 4 - 8 years 130,000 - 165,000 Junior 0 - 4 years 70,000 - 125,000taylorroot.com.au
  • 10. Australian compliance & operational risk: Market update & salary survey 2011/2012The salaries - MelbourneInvestment Banking Title Oganisational type Experience (typical) Salary range (AU$) Head of compliance/risk Tier 1 10+ years 290,000 - 300,000 + Tier 2 10+ years 200,000 - 250,000 Deputy head of compliance/risk or equivalent Tier 1 10+ years 205,000 - 245,000 Tier 2 10+ years 175,000 - 210,000 Senior manager Tier 1 6+ years 145,000 - 195,000 Tier 2 6+ years 120,000 - 155,000 Manager Tier 1 4+ years 115,000 - 140,000 Tier 2 4+ years 95,000 - 135,000 Analyst 0 - 4 years 70,000 - 110,000Retail Banking/Consumer Finance Title Experience (typical) Salary range (AU$) Head of compliance/risk 10+ years 220,000 - 305,000+ Deputy head of compliance/risk or equivalent 10+ years 170,000 - 220,000 Senior manager 6+ years 140,000 - 175,000 Manager 4+ years 105,000 - 125,000 Analyst 0 - 4 years 60,000 - 85,000Insurance Title Experience (typical) Salary range (AU$) Head of compliance/risk 10+ years 180,000 - 230,000 Deputy head of compliance/risk or equivalent 10+ years 145,000 - 180,000 Senior manager 6+ years 110,000 - 135,000 Manager 4+ years 95,000 - 105,000 Analyst 0 - 4 years 55,000 - 90,000taylorroot.com.au
  • 11. Australian compliance & operational risk: Market update & salary survey 2011/2012Funds Management Title Oganisational type Experience (typical) Salary range (AU$) Head of compliance/risk Large, international 10+ years 195,000 - 240,000 Smaller, domestic 10+ years 175,000 - 225,000 Deputy head of compliance/risk Large, international 10+ years 155,000 - 190,000 or equivalent Smaller, domestic 10+ years 135,000 - 180,000 Senior manager Large, international 6+ years 130,000 - 150,000 Smaller, domestic 6+ years 110,000 - 135,000 Manager Large, international 4+ years 105,000 - 135,000 Smaller, domestic 4+ years 95,000 - 125,000 Analyst 0 - 4 years 55,000 - 85,000Distribution/Financial Planning Title Experience (typical) Salary range (AU$) Head of compliance/risk 10+ years 165,000 - 210,000 Deputy head of compliance/risk or equivalent 10+ years 130,000 - 140,000 Senior manager 6+ years 110,000 - 130,000 Manager 4+ years 95,000 - 115,000 Analyst 0 - 4 years 50,000 - 85,000Corporate Compliance Title Experience (typical) Salary range (AU$) Senior 8+ years 130,000 - 215,000 Mid 4 - 8 years 100,000 - 180,000 Junior 0 - 4 years 55,000 - 90,000taylorroot.com.au
  • 12. For more information on the compliance & operational risk recruitment market please contact amember of our team on:+ 612 9236 9000 (Sydney) or + 613 8610 8400 (Melbourne):David Buckley Amanda AthertonPartner Directordavidbuckley@taylorroot.com.au amandaatherton@taylorroot.com.auEstablished in the 1980s, Taylor Root is now widely recognised as being one of the world’s leadinglegal & compliance recruiters. Operating out of offices in the UK, Dubai, Singapore, Hong Kong, Sydneyand Melbourne, we are ideally placed to assist legal & compliance recruitment on an international basis.Taylor Root has a strong track record in the recruitment of: Heads of legal and Legal advisers; law firmassociates and partners; contract/locum lawyers; paralegals; company secretaries and compliance andrisk professionals.Taylor Root is a member of The SR Group. The SR Group is a specialist recruitment consultancy dedicatedto raising standards in the business environments that we serve. The sectors we cover include tax, legal,human resources, marketing, professional support and executive search, dealing with a substantialnumber of the world’s leading professional partnerships, multi-national corporations and internationalbanking groups as well as small to medium sized developing organisations.Risk Management Magazine has established itself as the most authoritative source of news, analysis,opinion and practical advice for business leaders and risk professionals in Australia. Published monthlyin a news magazine format, Risk Management magazine is succinct and easy to read.It provides readers with independent, timely and practical advice that enables senior and executivemanagement and boards of directors to make informed business decisions.Risk Management Magazine has an audited monthly circulation exceeding 6,220 copies. It is deliveredby name to key C-level business decision makers, directors, senior executive management and seniorrisk professionals in the fields of financial services, banking, regulation, internal audit, informationtechnology, compliance, health and safety, business continuity and corporate governance.Visit www.riskmanagementmagazine.com.auFor information on Risk Management please contact:Paul Desmond - Paul.Desmond@keymedia.com.au London Dubai Hong Kong 95 Queen Victoria Street Suite 614, Liberty House DIFC 1918 Hutchinson House London EC4V 4HN PO Box 506739 10 Harcourt Road , Central, Hong Kong T: +44 (0)20 7415 2828 T: +9714 448 7770 T: +852 2973 6333 Singapore Melbourne Sydney 30 Cecil Street Level 2, Rialto North Tower Level 12, 25 Bligh Street #21-03/04 Prudential Tower 525 Collins Street Sydney Singapore 049712 Melbourne, VIC 3000 NSW 2000 T: +65 6420 0500 T: +61 (0)3 8610 8400 T: +61 (0)2 9236 9000 Taylor Root is a member of The SR Group taylorroot.com.au