Royal Commission Challenges Big Four Of Hiring
The impact of the royal commission is already being felt in financial services recruitment. Employers and candidates must be aware that while credentials, high-performance, track-record and likability are typically the ‘big four’ of hiring, we increasingly observe that integrity and professional principles have leapfrogged into the top criteria of hiring managers.
Now more than ever, financial institutions must employ people who intrinsically strive to do the right thing, who are easily coachable and conscientious about upholding organisational compliance policies. There is nothing ambiguous about doing the right thing. Operating in the best interest of customers must be at the core of each individual in the organisation.
Currently, we observe increasing demand in hiring senior management with stella reputations, inspiring leadership and demonstrable ethos. Additionally, we are experiencing increased demand in hiring compliance professionals both for large projects and permanent senior compliance positions.
Post the royal commission, serious attention must be given to what went wrong, the root of the issues and what must be done not only to remedy the situation but to avoid recurring misconduct. It is extremely important to Kaizen to do our part in supporting industry-wide transformation. In the last six-months, we have brought on a legal and compliance recruitment specialist, we have implemented a more rigorous line of questioning in candidate interviews and in our reference checking around proof of professional principles and ethics, and we have heightened expectations around candidate conduct from the outset.
Compliance professionals in high demand
Industry observers are expecting more stringent regulations and tougher penalties around misconduct, emphasising that compliance is a crucial part of the industry regardless of organisational size.
In years gone by, hiring compliance professionals (who sit in a non-revenue generating arm of the business) may not have been a priority for many institutions, now we have seen a shift away from this. Off the back of the commission, financial services organisations have already started undertaking large compliance projects to correct mistakes and prevent further damaging findings. With greater scrutiny and much ground to make up, organisations are compelled to invest more into internal controls, risk reduction and lowering personnel liabilities.
Reporting questionable behaviour in the workplace
An area of significant concern are the failings of governance, compliance and culture. It goes without saying, that none of these can be changed overnight.
Institutions must actively encourage and promote employees to speak up and report questionable behaviour. Ensuring the whistleblower remains anonymous and protected will give employees greater confidence to come forward. This must be reiterated to them regularly.
Educating and encouraging employees to identify issues and bring them to the attention of human resources and senior management is essential. It is also essential to support the individual at fault. Training and mentoring can often help to rectify the issue rather than firing them as a knee-jerk reaction.
Having said that, we may continue to see a reduction in headcount at certain financial services institutions as they attempt to regain consumer confidence and provide some assurance of accountability for the alarming misconduct that the royal commission uncovered.
With the volume of misconduct that went unreported through the wilful blindness of fellow employees who had the attitude of, ‘sweeping things under the rug’ something has to give if we are to raise the standards. It can be hard in Australian culture to ‘snitch’ or ‘dob’ others in, but this needs to be challenged. We must also challenge the common belief that reporting questionable activities by peers can impact negatively on one’s career growth. Even if it means rewarding people who bring forward significant information.
Looking to the future: improving internal control standards
Firing a few individuals is not enough to address industry-wide cultural problems. It can often be too late to deal with the problem once it has been exposed by regulators or retrospectively by a royal commission. Instead of taking the easy option and weeding out people that are acting outside the scope of their duty, we must look to alternate methods for eradicating this misconduct.
Some institutions already have teams of compliance professionals within their risk and compliance departments. The reality is the systems these organisations currently have in place have not worked well enough. So what is next from here?
Many firms have been proactive with the introduction of additional training and change management programs. Empowering staff members with the skills to better facilitate customer satisfaction from the top down will help re-set the tone and bring about higher standards across the industry.
I believe we must first fix the internal issues and address weaknesses of current employees before looking to bring on new people. Getting things right internally will lead to good habits which can then form part of the induction and expectations set-out to new starters.
This remediation must be orchestrated by the right people, with the right leadership and skills within each organisation. I see competition between institutions in the compliance and conduct space becoming a major selling point to both consumers and prospective employees.
We all have an obligation to ask more from industry leaders and senior risk, legal and compliance professionals to take action on this. Our industry depends on it.
Kaizen is ready to do our part in supporting industry-wide transformation.
Regards
Matt McGilton – Director
Kaizen Recruitment specialises financial services recruitment across funds management, wealth management, superannuation, investment consulting and insurance. We are based in Melbourne and Sydney. For assistance or further information please telephone our office at +61 3 9095 7157 or submit an online form.
Like what you see?
Please feel welcome to join
Kaizen Recruitment’s mailing list
