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Implications of New Legislation for Recruitment |
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 When it comes to matching good candidates
to good opportunities in any business sector recruitment agencies quite rightly
have to do their homework in order to fully understand and stay abreast of
their marketplace or niche sector. This is particularly true for the Finance
sector which has witnessed some huge changes over the last few years.
Take the
Sarbanes-Oxley Act for example, now commonly referred to as SOX. When Congress
passed the Act in 2002 it had three prime objectives - to combat fraud, to
improve the reliability of financial reporting and to restore investor
confidence. Although these goals are simple enough in themselves the underlying
controls which financial institutions are obliged to implement under the Act
are often exceedingly complex and the costs of implementation can run into
millions. This is because the establishing of sound internal control structures
requires a thorough assessment of the current financial control mechanisms
followed by analysis and planning for the necessary improvements to meet the
Act's compliance targets. These changes can range from simple procedural
changes at one end of the scale to full blown IT system replacements at the
other end of the scale.
At first
the requirements of SOX compliance seemed over complex and burdensome causing
many senior executives to question the need for such expensive and bureaucratic
solutions but over time there has been a marked sea change in opinion and today
most Finance industry executives realise the huge benefits that the Act can
bring if well managed internally within the organisation.
This
realisation began to dawn not just because of the fall out from the WorldCom
and Enron scandals but also from many other factors that were weakening the
established control processes e.g. rapid mergers and acquisitions with
less-than-seamless integration, new IT systems, outsourcing, foreign expansion
and globalisation, exploitation of new markets and organisational
restructuring. All these and other smaller internal factors had led to many
financial institutions experiencing weakened or non-existent controls leaving
them exposed to both audit failures and increasing investor disquiet. In this
context the requirements of the Sarbanes-Oxley Act provided the perfect
framework within which to address all these issues and put the house back in
order.
Basel II
is another similar example of an initiative that has been steadily growing in
stature and becoming increasingly sophisticated as the whole concept of
‘lending risk' has become higher profile. Essentially the requirement is for
lending institutions to apply much more rigorous controls to their lending
policies in order to minimise risk in accordance with the stringent
requirements of the Basel II accord. It sounds simple enough in principle but
the reality is that there are huge implications in terms of changes for not
only procedures and processes but also hugely expensive changes to current IT
systems.
Achieving
compliance though is not a task that can be undertaken lightly. The reality
within most financial institutions is that the majority of staff are fully
employed on the ‘day job' and have little, if any, capacity to start
implementing the procedural and technical changes necessary to meet the demands
of SOX or Basel
compliance. This is where good recruitment agencies can really make a
difference. Traditionally Agencies would keep a list of potential candidates
with tried and trusted Finance experience that can be deployed into suitable positions
within the industry. Increasingly though financial institutions are not just
looking for mainstream banking knowledge but also the ability to adapt, manage
or drive new initiatives to meet current legislative and compliance targets.
This means that in today's competitive market place both recruitment agencies
and their candidates need to be stay abreast of all the industry initiatives
that are impacting the business. Having good ‘sector knowledge' is no longer
enough. Having an awareness and experience of the latest financial IT systems
and processes that underpin compliance targets are now equally as important -
as these are increasingly the key skills the industry is looking for.
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