Tough regulations could affect recruitment of senior financial services staff
9 October 2014
New rules that could see senior bankers jailed for ‘reckless’ misconduct could have an impact on the recruitment and retention of senior directors.
Thu, 9 Oct 2014 | By Nicola Sullivan
New rules that could see senior bankers jailed for ‘reckless’ misconduct could have an impact on the recruitment and retention of senior directors.
An article in the Financial Times this week revealed that two board members from HSBC are preparing to quit in response to new regulations that could make senior managers accountable for misconduct and make reckless misconduct that causes a financial institution fail a criminal offence.
The article also highlighted the regime is much tougher than rules in the US or Europe.
Recruiter reported on the new expectations of financial services executives and other employees in the September issue of the magazine.
Joss Collins, a senior manager at Venn Group, told Recruiter said: “What is obviously daunting about this for these directors is that they can be responsible for their own day-to-day work but they are also going to be held accountable for people who work with them as well. That’s quite a scary proposition I think.”
Collins said that the main “danger” was the potential drain on talent with financial services professionals moving to New York or Singapore or “anywhere” in the world where they are not going to be so “heavily scrutinised” to make money “without the worry”.
He added: “We just don’t know what’s going to happen with that and whether people will to stay here to probably still get paid pretty well but be under much more scrutiny.”
However, Jo Sellick, managing director of recruitment specialist Sellick Partnership, said that fears the sector may lose its best talent to other countries were unfounded. “The media may jump on this as a concern,” he said, and say [we] “are losing talented people who could impact on the economy”. He added: “I don’t think it will – it will be a flash in pan.”
When asked to comment on the potential impact of the regulations could have on recruitment Sellick, told Recruiter: “If you are asking for my opinion whether this could be a problem in the future I would say ‘absolutely’.” He added: “It is horses for courses; some people won’t have a problem with it… while others might not touch [these roles] with a barge pole.”
Collins also said the regulations were also affecting people “behind the scenes” who are “baying for increases in salary” and some of the “juicy bonuses that the dealmakers get”. He said: “People have got a lot more work to do, a lot more reporting to do and are under lot more scrutiny. These banks are having to report in a lot more detail and a lot more regularly on their exposure and what they are doing.”
However, Mike Hammond, chief executive of global executive search firm Sheffield Haworth, told Recruiter recently that London would remain an attractive location to work. “London has an uncanny ability to reinvent itself and attract talent. In reality, people still want to work in London.”
The UK’s Banking Reforms, brought in towards the end of 2013, bring in a number of changes, including the requirement for banks to ring-fence their retail operations from higher risk investment banking arms and make senior managers liable for criminal prosecution for reckless misconduct.
New rules that could see senior bankers jailed for ‘reckless’ misconduct could have an impact on the recruitment and retention of senior directors.
An article in the Financial Times this week revealed that two board members from HSBC are preparing to quit in response to new regulations that could make senior managers accountable for misconduct and make reckless misconduct that causes a financial institution fail a criminal offence.
The article also highlighted the regime is much tougher than rules in the US or Europe.
Recruiter reported on the new expectations of financial services executives and other employees in the September issue of the magazine.
Joss Collins, a senior manager at Venn Group, told Recruiter said: “What is obviously daunting about this for these directors is that they can be responsible for their own day-to-day work but they are also going to be held accountable for people who work with them as well. That’s quite a scary proposition I think.”
Collins said that the main “danger” was the potential drain on talent with financial services professionals moving to New York or Singapore or “anywhere” in the world where they are not going to be so “heavily scrutinised” to make money “without the worry”.
He added: “We just don’t know what’s going to happen with that and whether people will to stay here to probably still get paid pretty well but be under much more scrutiny.”
However, Jo Sellick, managing director of recruitment specialist Sellick Partnership, said that fears the sector may lose its best talent to other countries were unfounded. “The media may jump on this as a concern,” he said, and say [we] “are losing talented people who could impact on the economy”. He added: “I don’t think it will – it will be a flash in pan.”
When asked to comment on the potential impact of the regulations could have on recruitment Sellick, told Recruiter: “If you are asking for my opinion whether this could be a problem in the future I would say ‘absolutely’.” He added: “It is horses for courses; some people won’t have a problem with it… while others might not touch [these roles] with a barge pole.”
Collins also said the regulations were also affecting people “behind the scenes” who are “baying for increases in salary” and some of the “juicy bonuses that the dealmakers get”. He said: “People have got a lot more work to do, a lot more reporting to do and are under lot more scrutiny. These banks are having to report in a lot more detail and a lot more regularly on their exposure and what they are doing.”
However, Mike Hammond, chief executive of global executive search firm Sheffield Haworth, told Recruiter recently that London would remain an attractive location to work. “London has an uncanny ability to reinvent itself and attract talent. In reality, people still want to work in London.”
The UK’s Banking Reforms, brought in towards the end of 2013, bring in a number of changes, including the requirement for banks to ring-fence their retail operations from higher risk investment banking arms and make senior managers liable for criminal prosecution for reckless misconduct.
• Look out for the Sector Analysis on the Banking & Financial sector in October's Recruiter magazine, out next week.
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