It's a good time to be in the compliance profession.
While many people may associate the term “hot jobs” with positions at hip Internet firms or careers as financial wizards, compliance professionals are a hot commodity. Sure, compliance may not be quite as sexy as Wall Street or Silicon Valley, but demand for experienced compliance officers, risk managers, and similar roles is heating up, particularly in the financial services and life sciences industries.
According to a survey by executive search firm CTPartners, among the twenty executive positions in high demand for 2013, several are in the compliance area. In financial services, for example, these include compliance manager (ranked 4th), chief risk officer (ranked 5th), and officer of government and regulatory affairs.
Several factors are converging to drive demand for those with compliance backgrounds. One is the increasing volume of regulations coming from the Securities and Exchange Commission, the Department of Labor, and many other government agencies. “With Dodd-Frank and everything that's happened over the past few years, it's basically the chief compliance officer employment act for the next decade,” says Glenn Buggy, a partner with executive search firm CTPartners. “You can thank—or blame—the government regulators,” he says.
And it's not just U.S. regulators that seem to have the regulation itch. “Regulators are becoming more active in many countries,” says Matt Tanzer, associate general counsel at Tyco International. News of enforcement actions now can cross the globe almost instantly, allowing regulators in one region to see and learn from the actions of their counterparts in another. Regulators at the state level have been equally busy.
Another driver is that massive penalties and fines from transgressions such as violations of the Foreign Corrupt Practices Act or anti-money laundering laws is pushing companies to beef up their compliance departments.
The upshot? Compliance officers are in demand. Membership in both the Society of Corporate Compliance and Ethics and the Health Care Compliance Association has grown at 20-plus percent annually for the past five years, says Roy Snell, chief executive officer with both organizations.
In part, that's because organizations that haven't built out a robust compliance function are now starting to, Snell says. He reports seeing demand for compliance professionals not just at large, global companies, but also at mid-sized firms.
The demand extends beyond the executive level into the mid-level ranks. Many companies start by hiring a compliance officer, and with that position filled, says Snell, they soon realize that their compliance department needs additional personnel, such as investigators and trainers. Over time, they flesh out their departments, boosting demand for compliance professionals at all levels.
“I think it's palpable. You can feel the increase,” says Sam Yoon, director of international compliance with General Dynamics, an aerospace and defense company. Yoon says he's noticed a jump in job listings for compliance professionals on compliance blogs.
The growing importance of the compliance area within many companies is influencing the skills required of potential job candidates. For starters, they need to be able to interact productively with other senior executives to influence the organization, says Paul Gibson, a partner at executive search firm Heidrick & Struggles. That requires an ability to translate technical compliance concepts and convey the business impact to colleagues in other areas of a company. Compliance professionals need to be able to say, “‘this is the regulation and this is what it means to you, the business leader,'” Gibson says.
Compliance jobs are also increasingly demanding technology know-how. Many companies also are looking for people “who can spot a problem ahead of time,” Gibson adds. In financial services, for instance, this may require knowing how to leverage systems that analyze transactions, watching for patterns that may signal inappropriate activity.
“With Dodd-Frank and everything that's happened over the past few years, it's basically the chief compliance officer employment act for the next decade.”
Yoon, for instance, tries to keep an eye on companies that are in trouble or appear to be having a problem in a specific part of the globe. His analysis can help him recognize areas on which regulators appear to be focusing and identify countries or regions in which problems might be arising.
With firms trying to figure out “how to look into the crystal ball,” they're looking for compliance experts who can add insight not only to the rules already on the books, but those that are yet to come, Buggy adds. Not surprisingly, that can translate to strong demand for individuals who've spent time within regulatory agencies, he adds. “These people have a unique skill set because they were there when the rules and regulations were being conceived.”
Compliance professionals with enforcement experience within, for instance, the U.S. Department of Justice or the Treasury Department also are in demand, Yoon adds. “Those are hot tickets.”
As the sizes of compliance teams have increased, compliance professionals with management experience can have an edge, Buggy says. “Before you could just be a smart person who knows all the rules. Now, it's a big management job.”
Another type of experience that can be critical, particularly within a compliance department, is education, Tanzer says. He adds that while most of Tyco's compliance professionals have a legal background, those with education qualifications make up a significant portion of the department. “It's so important to educate and inform employees,” he adds.
The growing demand for compliance professionals with top-notch skills and experience has several ramifications. For starters, the breadth of candidate searches has widened considerably, Gibson says. Few companies can expect to simply recruit a compliance leader from a competitor.
TOP FINANCIAL SERVICES JOBS
Below is a list of top jobs in the financial services sector, according to CTPartners.
Today's strong regulatory environment means that companies need compliance teams capable of protecting their alignment with complex laws, including Dodd-Frank Wall Street Reform & Consumer Protection Act and ObamaCare. Infrastructure hiring–of risk, financial, audit, compliance, legal, technology and operational executives–will continue in 2013 in response to regulatory requirements.
Officer, Government and Regulatory Affairs
Companies and trade associations in highly regulated industries, such as pharmaceuticals, medical devices, energy and financial services continue to search for top leadership to navigate complex regulations. Technical knowledge of product life cycle to assure safe and effective products in healthcare, for example, or accounting and investment practices within regulations in financial services to avoid global economic crises continue to make these positions priority hires.
Chief Risk Officer
A critical role since the upheaval caused by the 2008 financial crisis, CROs are responsible for protecting and managing all types of risk, from enterprise risk to market credit and operational risk. Dodd-Frank and Basel III added another layer of legislation and compliance, keeping control functions in demand across sectors.
Investment executives with asset allocation and macro strategy skills are in demand, as global economic pressures continue and regulatory demands and operating and technology changes impact key decisions.
Wealth Management Professional
Wealthy Baby Boomers, along with other high net worth investors, need advice in the face of tax changes, complicated market opportunities and a cloudy future for global investments. Executives with experience offering financial and investment advice, accounting and tax services and legal/estate planning will be in demand as the economy improves in 2013 as anticipated.
Emerging Payments Officer and Payments Executive
The interconnection between payments and the consumer relationship has gained momentum that shocked even the most prepared financial services companies. The payment stream contains a treasure trove of big data that will lead a decade worth of consumer strategy, and financial institutions that miss the opportunity to link with the world's leading retailers will be left behind. Banks have extraordinary access to knowledge of consumer behavior, so for payments executives who can leverage it, the sky's the limit.
Anecdotal evidence also suggests that searches for talent are taking longer, Buggy says. While most companies want to fill any openings as efficiently as possible, they also need to get the right person. “If they don't get it right, they may be on the front page of the paper,” and not for positive news, he adds.
Higher Pay, Too
Perhaps not surprisingly, salaries also appear to be heading higher, although only slightly. “The demand is enormous and the supply is tiny,” Snell says. The SCCE's Cross Industry 2012 Chief Compliance Officer Survey—the first such survey by SCCE, Snell says—shows average salaries ranging from $119,000 for those managing one employee, to just under $202,000 for those managing more than twenty people. By industry, compliance officers within biotechnical and pharmaceutical firms topped the salary scales, at an average of $227,000. Manufacturing and energy firms round out the top three. The lowest paid sector was government or policy at $109,000.
While salaries are heading up, few can expect a windfall. “The true industry leaders can try to command premiums,” Gibson says. However, some compliance professionals assume they'll capture an outsize pay increase by moving from one company to another. “In some cases, the expectations are a little unrealistic,” he adds.
The most significant growth in compliance salaries is yet to come, Snell predicts. “As people figure out how hard the job is and how much responsibility it carries, everything will get driven up.”
Yet another indication of corporate America's growing need for qualified compliance professionals is the small, but increasing number of universities that are adding compliance programs to their curriculum. For instance, George Washington University offers a graduate certificate in healthcare corporate compliance, while Quinnipiac University in Connecticut offers a healthcare compliance certificate. Gibson says he's also observed a greater number of compliance courses within the curriculums at law schools.
The demand for highly qualified compliance professionals shows no signs of letting up, say executive recruiters. As Buggy points out, “the world is not going to get less regulated.”
In fact, Tanzer identifies several segments within compliance that are becoming even more critical, such as data privacy. “Many other countries are more focused than the U.S. [on data privacy] and are passing laws that are very stringent,” he notes. Another area is international trade restrictions. “There are a lot of restrictions on different products and where they can be sold or shipped,” Tanzer says.
The continued demand for compliance professionals, as well as their expanding role within many firms, makes for an exciting time, Buggy says. “Compliance has a huge impact on the success or failure of a business,” he says. “Nothing can bring a company down quicker than messing up.”