With the depth of AML/CFT regulations and federal legislation seen today largely governing the day-to-day workflows of American financial institutions small and large, the amount of moving parts making up compliance departments continues to evolve. As such, regulatory compliance jobs are currently in higher demand than ever before. Since the passing of the Dodd-Frank Act of 2010, the total number of compliance officer jobs in the U.S. has risen by greater than 30%, far eclipsing that of the average line of occupation. With the Biden administration recently announcing its comprehensive U.S. Strategy on Countering Corruption – an initiative emphasizing key enforcement priorities that include anti-corruption and anti-money laundering – this demand is expected to further increase in the year to come. While there are growing risks associated with jobs in the compliance field, the salary these positions command can be quite lucrative, specifically as competition for capable officials continues to heat up. Analysts have begun to speculate about the effects of these hiring developments and the potential bottleneck that such fierce competition could create however.
Compliance departments of American financial service providers have been hit hard since the start of the Covid-19 pandemic. With work from home ordinances and changing workspace dynamics varying from firm to firm even until today, human resource departments have struggled to both keep and acquire talent. Many compliance officials have opted to remain at home despite many companies attempting to promote a gradual return to the office, leaving their respective institutions in the difficult position of either accommodating them or replacing them. And with true face-to-face interaction still limited, many institutions have also failed to develop in-house alternatives to address their limitations in this regard. To further compound matters, the employment boom that was expected in 2021 failed to take place. With the relaxation of Covid restrictions, many expected a significant leap forward with respect to employment figures last year, somewhat by default. In fact it looks as though the end of the more-than-generous federal jobless benefit period has largely failed to bring Americans back into the labor force.
This employment squeeze of course extends to regulatory compliance personnel. Financial institutions are so desperate to attract compliance officers that many are trying to lure them by giving into demands of remote work, salary increases, and company equity. “It’s all hands on deck for corporations to attract the talent,” said Paul C. McDonald, a senior executive director at human resources consulting firm Robert Half International Inc. “They are looking to pay the most they can, and with benefits and in perks the best they can.” 1 Other institutions have turned their sights to new college graduates, most with little-to-no relevant professional experience under their belts, to fill the gaps. However, the learning curve associated with hiring practices of this variety can translate to multi-million dollar regulatory penalties for even the most minor of slip-ups, so FI’s have had to tread lightly in this regard to date. As such, most of America’s high-powered banking staples have begun chumming the sector’s waters so to speak in search of veteran compliance officers and personnel, creating an increased amount of competition for firms to be able to even keep their own employees – this given that the vast majority of compliance officers are currently employed. The employment rate specifically for compliance officials in the United States decreased from 3.5% in 2020 to 2.4% in 20211, a figure that is significantly lower than the national unemployment average of 5.3%.
Salaries also increased, supporting the assertion that financial institutions are trying their best to acquire regulatory compliance talent by any means necessary. Annual salary guides for compliance staff showed increases for all sectors and levels from 2021 to 2022. Compliance chiefs in the 75th percentile – meaning above average skillset and experience – alone saw a 1.5% salary increase (to approximately $209,000 USD) in 2022.1 While the rapidly increasing rate of inflation under the Biden administration should be taken into consideration, these salary gains are still relatively notable in the grand scheme of things. It seems that with the slow job growth figures seen since 2020 combined with the high employment rate of compliance officers has culminated in financial institutions having their backs against the wall when it comes to acquiring skilled personnel and keeping up with the ever-complex and expanding regulatory requirements by which they are bound down. This means that those seeking employment in financial compliance are currently in the drivers seat. Instead of the general status quo of candidates competing with each other for work, financial institutions are now fighting with each other to stay above water with respect to compliance. For those seeking roles in compliance, your time has come!
- Sun, Mengqi. “Competition for Compliance Officers Intensifies amid Regulatory Pressures.” The Wall Street Journal, Dow Jones & Company, 19 Jan. 2022.