Internal Audit Review
This document has been composed by Goodman Masson’s Financial Services Audit specialist team using data gathered throughout 2009 from Clients and Candidates across the industry covering businesses from large Investment Banks to smaller Hedge Funds and Asset Managers.
2009 saw a significant decline in the number of Internal Audit vacancies coming to the market. This was not, however, due to a decrease in the workloads of Internal Audit departments. If anything, the reverse was true with the increase in regulations and risks in the markets. Due to the Credit Crunch of 2008 and Global Recession, many Audit teams were busy battling with ad-hoc reviews, projects and FSA requirements on top of their established Audit plan as most companies belatedly turned their focus to cost-cutting.
H2 saw a rise in vacancies from H1, however, companies remained extremely cautious about investing in additional staffing resources, with only replacement headcounts being approved. Coming into 2010 Internal Audit is high up on the list in being allocated additional resources due to the nature or their work and the continuing risks and volatility in the financial markets.
One area where there was high demand was for experienced Capital Markets Auditors at the AVP and VP levels. There was a focus on hands on Auditors rather than Managers due to the increased demands on Audit as a function, but with restrictions on remuneration on offer it was difficult for companies to attract the best people in this area. There were also demands for Newly Qualified Financial Services Audit candidates straight from Practice as well as for IT Auditors.
Businesses are much more specific in their recruitment and tend now to be absolute in their requirements for things like product knowledge and their depth of appreciation of controls, which is meaning that, although there are more Internal Audit candidates on the market, the roles are still extremely specialist. Capital Markets Auditors will continue to be in demand throughout this year, also Credit Auditors will be a key area for many businesses. Candidates from a Credit Risk/Review background will be highly sought after with banks having increased pressure in this area.
Turnover expectations are higher than average due to limited bonuses, pay rises and promotions available, so replacement hiring is expected to increase vacancies at the end of Q1 and throughout Q2.
How has all this affected salaries? Despite an increase in candidates coming to the market, and a shortage of jobs for these candidates, salaries within most areas of Internal Audit remained static during 2009 due to a focus on costs. Although if demand continues to increase, salary levels are expected to rise to attract top candidates.
One potential reaction to the pressure on bonus levels across the industry is for basic salaries to be increased exponentially. We have already seen this with some banks front office staff and are increasingly aware of high level discussions to go down this route of reduced bonus and increased basic compensation for middle office and other professional support staff which would include Internal Audit.
Stephen Ingielewicz | Senior Consultant
Banking and Financial Services
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