2023 Risk Salary & Recruitment Trends Guide

 

2023 Salary & Recruitment Trends Guide: Risk, Quant & Treasury

Over the past two years, demand for risk professionals has reached new heights. Employers across the board have also reported major difficulties in sourcing skilled candidates, with salary expectations continuing to be the biggest barrier to hiring. Deep industry insight and understanding is needed by both professionals and employers looking to hire to navigate the current climate for optimal partnerships. Offering competitive salaries is a must, but we’ve delved deep into what else is motivating professionals in this space to change job and employer.

We review some of the latest trends shaping the risk profession and the current market’s salary offerings.

 

Permanent recruitment trends

Over the last two years, demand for risk managers has been higher than at any point since before the Global Financial Crisis.

Hiring ramped up quickly in 2021 when the uncertainty surrounding Covid-19 began to dissipate. Banks were especially active, as they reinvested the large sums they had set aside for provisioning during the pandemic once it became clear that their losses were lower than expected.

Finding and attracting talented risk managers is never easy, but we initially saw a steady stream of candidates keen to explore new opportunities in 2021 after 18 months of relative inertia. And although many of these professionals had found jobs by 2022, underlying demand has showed no signs of slowing down.

Against this backdrop, employers of risk managers have reported major difficulties in sourcing skilled candidates. Nearly all (95%) of the organisations we recently polled are struggling to hire suitable staff. Of these, 61% described current recruitment conditions as ‘very challenging’, a significant rise from 37% the previous year.

Salary expectations continue to be the biggest barrier to hiring, with 82% of employers emphasising the challenges they have faced around compensation. Other key issues include candidates possessing insufficient technical or regulatory knowledge (62%) and dissatisfaction with remote working opportunities (38%).

While hiring activity remained buoyant across the board in 2022, demand was especially strong at the junior end of the market.

Graduates with one or two years’ experience are highly sought-after, with many employers seeking professionals who can hit the ground running without requiring extensive training.

These candidates are in short supply, particularly for more technical roles, as the STEM talent pool is already shallow and skilled graduates are often courted by multiple employers from different industries.

Talent shortages have also been exacerbated across all levels of seniority due to the perfect storm of Brexit and Covid-19. At the height of the pandemic, many foreign nationals – students, recent graduates and more experienced professionals – went back to their home countries and never returned.

"There is a huge amount of hiring at the moment. It's certainly the busiest I've seen the market in 15 years." - Josh Lawson, Associate Director of UK Risk & Treasury at Barclay Simpson.

Given the volume of vacancies being advertised, it's perhaps no surprise that candidates are optimistic about the opportunities currently available to them. An overwhelming 92% said they are confident about the job market.

When we asked candidates to rank their reasons for considering a new role, 54% chose remuneration first, nearly three times the amount that chose career development (19%). This is understandable, as there have been significant increases in starting salaries across risk management since 2021.

With the UK widely predicted to fall into recession in 2023 and a number of big banks already announcing job cuts, it's possible that salary rises will level off as the year progresses. At the time of writing, however, the risk disciplines that we recruit into have not been noticeably affected by these factors.

 

Top three factors preventing hiring

Compensation challenges

 

Contract recruitment trends

The unprecedented demand for permanent staff was not widely reflected in the interim market in 2022, with IR35 reforms making contract and temp roles less attractive.

Interim positions at the junior end of the market bucked this trend, and day rates rose significantly for contractors who have two to five years’ experience. This was nevertheless one of the few bright spots in a sluggish year for interim risk recruitment.

IR35 changes were introduced in April 2021, but the immediate impact was relatively benign. In our report last year, only 16% of organisations believed the new regulations had caused them to miss out on hiring a desired contractor.

However, nearly two-thirds of employers (63%) in our latest survey said the issues surrounding IR35 were now affecting their ability to engage interim workers. Part of the problem is that skilled contractors are increasingly seeking permanent roles.

“A number of organisations took quite a risk-averse approach to IR35 reforms, with many choosing not to hire any contractors on ‘outside IR35’ arrangements,” says Chloe Bailey, Principal Consultant of Interim Risk at Barclay Simpson.

“The attraction of carving out a career as a contractor has therefore dissipated somewhat, with people flowing back into the permanent market as a result.”

This situation could reverse in 2023 if economic headwinds continue to pick up. It’s common for firms to rely more on temporary resources in periods of uncertainty, and contractors could be enticed back into the market if organisations choose to relax their policies regarding outside IR35 roles.

Despite a slowdown within the market, interim staff remain a valuable resource for the majority of organisations, with 63% of risk management departments utilising contract or temporary workers.

Specific project work (53% of organisations) and absence cover (16%) are the most common reason for hiring within the space. Notably, 16% of our respondents said they currently use contractors because they are simply unable to source permanent candidates – this is up from 9% who said the same in 2021.

 

Top reasons to engage interim, contract and co-source professionals from 2022 and 2021

 

 

Key factors affecting risk in 2023

Over the next 12 months, we expect various political, economic and social factors to have an impact on permanent and contract risk management hiring levels.

New regulations

The regulatory burden for financial services organisations continues to rise, driving strong demand for risk professionals across multiple disciplines throughout 2023 and beyond.

Within prudential risk, for example, firms have been hiring to support their transition from the Internal Capital Adequacy Assessment Process (ICAAP) to the new internal Capital and Risk Assessment (ICARA). Meanwhile, the implementation of new international standards for bank capital requirements is creating opportunities for market risk professionals. The Basel 3.1 changes include key FRTB proposals, and organisations now have until January 2025 to prepare for the reforms after a two-year delay was announced.

The PRA has also recently outlined its expectations for banks regarding improvements to model risk management (MRM) practices. The CP6/22 principles, which resemble existing SR 11-7 rules in the US, represent a major step-change for MRM and are due to be implemented in the first quarter of 2024.

Furthermore, the PRA is working alongside the European Banking Authority to repair IBA models within credit risk, resulting in increased demand within this space.

 

Brexit

In last year's report, we highlighted Brexit as a key contributor to talent shortages across risk management in the UK. This continued to be the case in 2022 and will likely be an ongoing issue for employers.

Prior to Brexit, many UK-based risk professionals were originally from continental Europe. Now, EU candidates must apply for a Skilled Worker Visa and possess a certificate of sponsorship from an approved employer before being able to settle in the UK.

We are beginning to see a number of emerging trends as a result, including more organisations being willing to consider sponsorships than ever before. There has also been a marked increase in the number of applications received from overseas candidates based outside of the EU, particularly in locations such as Africa and Asia.

 

Inclusion and diversity

In July 2021, the PRA/Bank of England and the FCA published a discussion paper regarding inclusion and diversity across financial services.

Since then, the FCA has released a review into the strategies of 12 firms, and alongside the PRA, will be finalising its position on inclusion and diversity later this year. As such, we expect to see more focus on these issues in 2023 than perhaps in any other
year in recent memory.

It is therefore encouraging that our research indicates a considerable increase in the number of firms that believe their organisation has a diverse and inclusive culture (94% in 2022 versus 76% in 2021). Our consultants are also reporting a rise
in employers asking for more diverse candidate shortlists, with many keen to address current imbalances within their organisations.

There is still room for improvement, however, with less than two-thirds (64%) of employers agreeing their HR processes are completely effective at ensuring equality of progression and reward for those with protected characteristics, such as disability, ethnicity and age.

 

Post-pandemic attitudes to flexible working

Our market reports have tracked the rising importance of flexible working among candidates over the last ten years, and the Covid-19 pandemic has certainly
accelerated this trend.

At the height of the crisis, organisations had to pivot quickly to ensure entire workforces could work from home safely and effectively. The majority achieved this transition remarkably well, protecting the health of their staff while remaining operational during a difficult time.

These remote working changes often provided candidates with a better worklife balance, which many are subsequently reluctant to give up. More than two-thirds (67%) of risk professionals now prefer to work from home at least three days a week.

The most popular set-up is three days at home and two in the office, and nearly seven out of 10 professionals said they would consider leaving their job if it didn’t offer their preferred hybrid working model.

 

 

Indeed, our consultants are already experiencing a rise in the number of candidates who are unhappy with their employer's flexible working policies. Nearly one in five (19%) candidates chose either remote working or a better work-life balance as their primary motivator for seeking a new role.

On the whole, employers’ attitudes towards flexible working are aligned with their staff. The vast majority (94%) offer hybrid or remote working, with more than three-quarters allowing employees to work from home either two or three days a week.

Less flexible organisations may wish to consider relaxing their policies if they are struggling to source the right people at a time when skilled candidates are in short supply.

Fortunately, it appears employers recognise that a lack of flexible working is quickly becoming a deal-breaker for many candidates, with 31% of firms telling us their current policies are causing recruitment and retention problems.

"Some firms have been quite rigid about bringing people back to the office full-time. I've had candidates willing to take a significant pay cut if it means they can work from home two or three days a week." - Antony Berou, UK Head of Risk Recruitment at Barclay Simpson

 

Salary and bonus trends

 

 

“More businesses are now willing to buy out bonuses automatically, which was not always the case. We’re also seeing improved parental leave, as well as benefits kicking in on day one of an employee starting, rather than after a certain period,” says Scott Nye, Executive Consultant at Barclay Simpson.

“A few employers are starting to offer four-day working weeks too, with recent research and trials suggesting that this increases retention, engagement, productivity and staff wellbeing.”

Given that 41% of firms already believe candidates’ salary expectations are not at all aligned with what employers can offer, we predict that creative bonus and benefits packages will become more common if wages continue to rise at current rates.

This is especially true now that flexible working, which has traditionally been an attractive perk in years past, is increasingly considered a standard offering.

 

Risk Salaries

These salary guide tables provide indicative base salary ranges for positions in specialist areas across locations which provide enough data to give meaningful figures. They are not comprehensive.

 

Retail Banking - Credit Risk

Area	Junior Analyst (0-12 mths)	Analyst (2-3 yrs)	Senior Analyst (3-6 yrs)	Manager (6-9 yrs)
London	£30,000 - £35,000	£40,000 - £55,000	£55,000 - £70,000	£70,000 - £85,000
South East	£30,000 - £35,000	£40,000 - £55,000	£55,000 - £70,000	£70,000 - £85,000
Regional	£25,000 - £30,000	£30,000 - £35,000	£35,000 - £55,000	£55,000 - £75,000
Contract day rate	£200 - £250	£250 - £350	£350 - £500	£500 - £650

 

Retail Banking - Credit Risk continued...

Area	Senior Manager (9-12 yrs)	Director (12+ yrs)	Head of Credit Risk
London	£85,000 - £100,000	£100,000 - £120,000	£120,000+
South East	£85,000 - £100,000	£100,000 - £120,000	£120,000+
Regional	£70,000 - £90,000	£90,000 - £110,000	£110,000+
Contract day rate	£650 - £750	£750 - £900	£900 - £1,300

 

 

Retail Banking - Operational Risk

Area	Analyst	Manager	Senior Manager
London	£40,000 - £50,000	£50,000 - £80,000	£60,000 - £95,000
South East	£35,000 - £45,000	£45,000 - £75,000	£55,000 - £80,000
Regional	£35,000 - £45,000	£45,000 - £75,000	£55,000 - £80,000
Contract day rate	£200 - £250	£250 - £350	£350 - £500

 

Retail Banking - Operational Risk continued...

Area	Director	Head of Operational Risk
London	£90,000 - £120,000	£115,000 - £165,000
South East	£65,000 - £110,000	£100,000 - £140,000
Regional	£65,000 - £110,000	£100,000 - £140,000
Contract day rate	£500 - £650	£650 - £750

 

 

Corporate Banking - Credit Risk

Area	Graduate/Junior Analyst (0-12 mths)	Analyst (2-3 yrs)	Associate Vice President (3-6 yrs)	Vice President (6-9 yrs)
London	£35,000 - £40,000	£40,000 - £50,000	£50,000 - £70,000	£70,000 - £90,000
South East	£35,000 - £40,000	£40,000 - £50,000	£50,000 - £70,000	£70,000 - £90,000
Regional	£25,000 - £30,000	£30,000 - £35,000	£35,000 - £50,000	£50,000 - £75,000
Contract day rate	£200 - £300	£300 - £400	£400 - £500	£500 - £650

 

Corporate Banking - Credit Risk continued...

Area	Director (10+ yrs)	Managing Director	Chief Credit Officer
London	£100,000 - £150,000	£180,000 - £250,000	£250,000+
South East	£100,000 - £150,000	£180,000 - £250,000	£250,000+
Regional	£75,000 - £95,000	£100,000 - £130,000	£110,000+
Contract day rate	£650 - £750	£750 - £1,000	£1,000+

 

 

Corporate Investment Banking - Operational Risk

Area	Graduate/Junior Analyst (0-12 mths)	Analyst (2-3 yrs)	Associate Vice President (3-6 yrs)	Vice President (6-9 yrs)
London	£35,000 - £45,000	£45,000 - £60,000	£60,000 - £80,000	£75,000 - £110,000
South East	£25,000 - £35,000	£35,000 - £45,000	£45,000 - £70,000	£70,000 - £90,000
Regional	£25,000 - £35,000	£35,000 - £45,000	£45,000 - £70,000	£70,000 - £90,000
Contract day rate	£200 - £250	£250 - £300	£300 - £400	£400 - £600

 

Corporate Investment Banking - Operational Risk continued...

Area	Executive Director/ Senior Vice President (10+ yrs)	Head of Operational Risk/Managing Director	Chief Credit Officer
London	£100,000 - £145,000	£140,000+	£250,000+
South East	£80,000 - £100,000	£100,000+	£250,000+
Regional	£80,000 - £100,000	£100,000+	£110,000+
Contract day rate	£600 - £800	£800+	£1,000+

 

 

Private Banking - Operational Risk 

Area	Junior Analyst (0-12 mths)	Analyst (2-3 yrs)	Associate Vice President (3-6 yrs)
London	£35,000 - £45,000	£45,000 - £60,000	£60,000 - £80,000
South East	£25,000 - £35,000	£35,000 - £45,000	£45,000 - £70,000
Regional	£25,000 - £35,000	£35,000 - £45,000	£45,000 - £70,000
Contract day rate	£200 - £250	£250 - £300	£300 - £400

 

Private Banking - Operational Risk continued...

Area	Vice President (6-9 yrs)	Director (10+ yrs)	Head of Operational Risk
London	£75,000 - £110,000	£100,000 - £145,000	£140,000+
South East	£70,000 - £90,000	£80,000 - £100,000	£100,000+
Regional	£70,000 - £90,000	£80,000 - £100,000	£100,000+
Contract day rate	£400 - £600	£600 - £800	£800+

 

 

Asset Management - Operational Risk

Area	Junior Associate (2-3 yrs)	Associate Vice President (3-6 yrs)	Vice President (6-9 yrs)
London	£35,000 - £45,000	£45,000 - £60,000	£60,000 - £80,000
South East	£25,000 - £35,000	£35,000 - £45,000	£45,000 - £70,000
Regional	£25,000 - £35,000	£35,000 - £45,000	£45,000 - £70,000
Contract day rate	£200 - £250	£250 - £300	£300 - £500

 

Asset Management - Operational Risk continued...

Area	Director (9-12 yrs)	Head of Operational Risk
London	£75,000 - £120,000	£110,000 - £160,000
South East	£70,000 - £90,000	£80,000 - £100,000
Regional	£70,000 - £90,000	£80,000 - £100,000
Contract day rate	£500 - £700	£700 - £900

 

 

Asset Management - Market/Investment Risk

Area	Associate	Vice President	Director
London	£40,000 - £80,000	£60,000 - £130,000	£110,000 - £250,000
South East	£40,000 - £80,000	£60,000 - £130,000	£110,000 - £250,000
Regional	£40,000 - £80,000	£60,000 - £130,000	£110,000 - £250,000
Contract day rate	£250 - £400	£400 - £650	£650 - £800

 

Asset Management - Market/Investment Risk continued...

Area	Head of Investment Risk	Chief Risk Officer	Head of Operational Risk
London	£110,000 - £250,000	£130,000 - £500,000	£140,000+
South East	£110,000 - £250,000	£130,000 - £500,000	£100,000+
Regional	£110,000 - £250,000	£130,000 - £500,000	£100,000+
Contract day rate	£800 - £1,250	£1,500+	£800+

 

 

Retail Banking - Quant Risk

Area	Graduate/Junior Analyst (0-12 mths)	Analyst (2-3 yrs)	Associate Vice President (3-6 yrs)
London	£40,000 - £45,000	£45,000 - £60,000	£65,000 - £85,000
South East	£40,000 - £45,000	£45,000 - £55,000	£60,000 - £80,000
Regional	£25,000 - £35,000	£35,000 - £45,000	£45,000 - £65,000
Contract day rate	£200 - £300	£300 - £350	£350 - £550

 

Retail Banking - Quant Risk continued...

Area	Vice President (6-9 yrs)	Director (9-12 yrs)	Managing Director
London	£90,000 - £125,000	£125,000 - £180,000	£180,000+
South East	£90,000 - £110,000	£120,000 - £180,000	£180,000+
Regional	£65,000 - £90,000	£90,000 - £150,000	£150,000+
Contract day rate	£550 - £800	£800 - £1,000	£1000+

 

 

Corporate Banking - Quant Risk

Area	Graduate/Junior Analyst (0-12 mths)	Analyst (2-3 yrs)	Associate Vice President (3-6 yrs)
London	£40,000 - £45,000	£45,000 - £60,000	£65,000 - £85,000
South East	£40,000 - £45,000	£45,000 - £55,000	£60,000 - £80,000
Regional	£25,000 - £35,000	£35,000 - £45,000	£45,000 - £65,000
Contract day rate	£200 - £300	£300 - £350	£350 - £600

 

Corporate Banking - Quant Risk continued...

Area	Vice President (6-9 yrs)	Director (9-12 yrs)	Managing Director
London	£90,000 - £130,000	£130,000 - £190,000	£190,000+
South East	£90,000 - £110,000	£120,000 - £180,000	£180,000+
Regional	£65,000 - £90,000	£90,000 - £150,000	£150,000+
Contract day rate	£600 - £850	£850 - £1,200	£1,200+

 

 

Investment Banking - Quant Risk

Area	Graduate/Junior Analyst (0-12 mths)	Analyst (2-3 yrs)	Associate Vice President (3-6 yrs)	Vice President (6-9 yrs)
London	£50,000 - £55,000	£55,000 - £65,000	£65,000 - £90,000	£90,000 - £140,000
South East	£40,000 - £45,000	£45,000 - £55,000	£60,000 - £80,000	£90,000 - £110,000
Regional	£25,000 - £35,000	£35,000 - £45,000	£45,000 - £65,000	£65,000 - £90,000
Contract day rate	£200 - £300	£300 - £400	£400 - £650	£650 - £900

 

Investment Banking - Quant Risk continued...

Area	Director (9-12 yrs)	Managing Director	Head of Credit Risk
London	£140,000 - £200,000	£200,000+	£120,000+
South East	£120,000 - £180,000	£180,000+	£120,000+
Regional	£90,000 - £150,000	£150,000+	£110,000+
Contract day rate	£900 - £1,250	£1,250+	£900 - 1,300

 

Based on research published by Barclay Simpson, an international company in internal audit and corporate governance recruitment.