Compliance Job Market: Strengths, Weakness, and Coming Changes

Posted by Jeff Pelliccio on Feb 13, 2017 9:00:00 AM

In ICS insights

What awaits the compliance job market in 2017 and the years to come? Compliance placement is particularly important for recruiters due to the importance of experience and the shifting nature of the field. So lets look at the current pressures shaping that field, and what they mean for new compliance needs and goals.

Compliance Faces an Uncertain Future

To understand where compliance is heading in the future, we need to look at the past. You see, the compliance field has had an unusual era of growth in recent years. Following the financial crisis and new regulations, there was a sudden and ubiquitous desire for more accurate compliance: in fact, it is part of the triumvirate of disciplines – compliance, risk assessment, and legal – to benefit greatly from recession conditions and new banking regulations.

But if all the recent growth and new need for compliance workers is based on a past financial crisis, the obvious question is, "Are we entering into a compliance bubble?" The answer appears to be yes, at least from a very broad perspective. That bubble comes from several sources:

  • Meeting new regulations. New regulations cause immediate, short-term growth in the compliance market as everyone scrambles to create the necessary plan to meet regulations – which may include new hires. But after new regulations are met, there is no need to keep hiring compliance people until the next regulation comes along.
  • Overhauls. The financial crisis opened a lot of eyes in legal/compliance departments when they faced sudden changes and new rules. Many compliance departments were operating with budgets and systems far out of date. A sudden need to update departments, technology, and budgets was felt by companies across the company. But once these overhauls were complete, activity decreased once again.
  • Hiring focus at the top. The focus is shifting from hiring compliance workers to more selective talent acquisition – hiring a VP or senior manager expert in compliance instead of three ground-level workers. This trend is influenced in part by new compliance technology, which has automated many processes.
  • Outsourcing. As a rule, if it can be outsourced then it will be. As compliance has grown in complexity, outsourcing has become increasingly common (in competition with automation for replacing compliance jobs). More outsourcing means less need for staff.

Riding the Wave: Where Compliance Shines

Despite what might be called a regression to the mean, compliance still has several high-growth opportunities to look forward to, thanks to newer market changes that are shifting compliance needs once again.

  1. AML: Anti-money laundering is one of those fields fraught with political implications and government intervention (more on this later), but it does appear to be on the rise. Here, the Bank Secrecy Act and other, similar requirements to make fraud and suspicious activity more apparent are yielding a new demand for compliance people trained in these areas – federal and law enforcement training are especially popular.
  2. Data Analytics: Data analytics moves so quickly – especially in recent years – that it can be difficult to pinpoint best practices. As a result, demand for compliance officers who actually understand data models and how to deal with new data is very high. What this data does can vary: Much of it is leading the way to new automation, or locating potential efficiencies in new compliance processes. It's probably a short-term bump, but it's still notable.
  3. Security: Mobile data continues to be a headache for companies – it's ubiquitous, but difficult to properly protect. Industry regulations regarding data, especially mobile data, are still trying to catch up to a world of hackers and vulnerabilities just waiting for a chance to steal information. It's no surprise that compliance growth in this area is strong, and will probably continue to be strong in the years to come.

Facing Challenges: Liability and Retention

So, where does compliance look weak? Two important challenges are liability and retention. When we mention liability, we're talking specifically about personal liability among compliance leaders. There are several reasons behind this – one of the more influential was the Yates Memo from the DOJ, which pointed out that the important of individual accountability. Compliance experts, in a move that should surprise no one, immediately took steps to diminish their own personal accountability. But the result was poor for the overall industry. More compliance experts are refusing to take on new jobs or even new responsibilities for fear of accruing personal liability in the process.

The second challenge is retention, an indication of the competition in certain areas of the market. In the active areas of compliance, there's a compensation race to retain or hunt down the most experienced and skilled compliance workers – a race that smaller companies can't really hope to win, at least in the short term. Part of the reason for this battle of retention is that compliance positions are often based in experience, and even when regulations change, past experience in dealing with compliance updates is invaluable. In other words, there's a lot of value concentrated in the average compliance employee, and companies are recognizing that.

The Relocation Trend and Why It Matters

Another trend we're seeing is the movement of compliance jobs out of larger cities and into other areas. Of course, this isn't restricted to only compliance jobs, it's part of a larger trend in the past 2-3 years of moving out of expensive cities and into smaller, growing cities and suburbs that may offer relocation benefits to both the companies and its employees...a move that is made possible by the growing amount of distance and home work possible. This is diversifying the areas where compliance jobs are available, while also making them harder to find in big cities. For example, if you live in New York, you can expect compliance jobs to be harder to find, and this is one of the reasons.

However, the trend is also global, which is yielding plenty of questioning and strategizing about regional vs. international efforts. In which country is compliance most needed? Where will the most compliance work be in the coming years? Where is the company moving, and what sort of compliance efforts will be needed in those regions? These questions need answers for the largest companies.

Growing Fields: Tech and Auditing

We've talked about current high point and ongoing trends, but what areas can we expect new growth to show up in the coming years? One option is technology, especially when it comes to skill requirements. Companies will have to decide if they want someone with the skills to help create internal solutions, or someone with experience in a vendor platform that they already use. Either way, technology is going to get even more focus in the future when it's time for new compliance hires.

Second, auditing is getting a lot of attention: We're talking about more advanced auditing models among smaller companies that can, for the first time, afford them. Thanks to growing technology and the presence of more talent in compliance, smaller companies can now consider ordering complex risk assessment, mock federal audits, real third-party or internal audits, and so on. This is helpful to both the company and newer compliance workers who need experience in this very thing. With this kind of win-win, expect new auditing goals for small-to-medium firms everywhere.

The Uncertain Future

The question remains: How will compliance regulations shift in the coming years? It's difficult to predict, traditionally, because so much depends on the political climate and what politicians think will be acceptable or have good "optics." At this point, however, we can make a few more solid predictions: One party controls Congress and has a president that has spoken out against regulation in the past. If things do change, it's likely to be toward deregulation, and less need for compliance hires.

However, how this will affect the talent acquisition market is still uncertain. It's tough to predict if this will be short term or long-term change, or if it will event happen at all. When it comes to politics, most firms have a solid "wait and see" strategy regarding any potential regulation. International compliance requirements are expected to keep on growing as well, so firms that intend to pursue global growth will need to pay attention to compliance no matter what happens.

Are you looking for AML, data, or security specialists for compliance and other efforts? Do you need developers with the skill and experience to create a compliance system tailored to your company?  Contact ICS today for a quick and easy method to tap into the best talent for the job.