New York starts to shed sector jobs as post-crisis regulatory drive peaks.
A golden era for Wall Street careers in compliance is drawing to a close as the wave of regulations introduced after the crisis reaches a peak, say financial recruiters.
While sometimes dismissed as box tickers or even “business prevention officers” by colleagues, compliance staff have been valued highly by employers since the financial crisis.
New York attracted a net 13,600 finance and insurance jobs in 2014 and 2015, in part because a compliance hiring surge offset employment losses in other departments as the industry pushed to cut costs.
The city shed a net 1,400 jobs in the sector between January and October, according to the Bureau of Labor Statistics and the New York Independent Budget Office. A net 900 jobs in legal services also left.
The figures were a sign, recruiters say, that demand for compliance specialists has cooled — even before the incoming Trump administration gets a chance to cut red tape.
Mike Karp, chief executive of the search firm Options Group, said: “Headcount cuts are just a part of life on Wall Street, but this time around it’s being driven by massive structural changes.
“Post-crisis it was all about compliance. We’ve seen that trend reversing.”
Financial employers still need armies of staff to monitor transactions and to prevent them — and their employees — falling foul of a wide range of rules from anti-money laundering to bribery.
Headhunters said experienced practitioners — typically with legal or accounting backgrounds — could still command pay bumps by changing employers.
However, banks have come under pressure to control soaring regulatory costs, and Ms Down said the salary uplifts were far short of the 30-50 per cent levels seen during the compliance boom years.
“We can’t just keep throwing heads at the problem,” she said of banks’ attitude to compliance spending. “Legal and compliance has been a significant line item.”
Lloyd Blankfein, chairman and chief executive of Goldman Sachs, said earlier this year that most of the bank’s 11 per cent headcount rise since the start of 2012 was explained by “heightened compliance efforts”.
“A lot of this has a Y2K feel about it — that is, we have to hire additional people because we have to get ourselves up to speed,” he said. “I think once we catch up and once automated, we probably will be able to reduce that headcount in some of these costs.”
Goldman is among several banks that has cut staffing in New York this year. It has made several rounds of reductions, totalling 486 positions, according to notices filed with state authorities. The types of jobs to go were not disclosed, however.
A person familiar with the matter said the reductions were in a range of areas and Goldman was not cutting a disproportionate amount of jobs in New York compared with other financial centres.
Source: The Financial Times