The film (or at least sci-fi film) enthusiasts amongst you will no doubt be enthusing about the forthcoming Star Wars film, set for release in December 2015. Especially as I understand that a significant proportion of the film was shot in the UK.
But this week, I want to talk about a different kind of war – one which is likely to develop over the next few months and years. And the catalyst for this will be the changing face of the compliance department.
This is something that has received quite a bit of publicity recently. For instance, earlier this year, Deloitte issued its latest report into the changing role of the compliance function, in an effort to demonstrate how the challenges facing the function in a variety of corporate environments are changing.
The challenges were viewed as numerous and significant; most of all being the need to adjust to a more judgement-led regulatory approach, and the need to be a driver behind establishing a strong compliance culture within the firm.
In addition, some industry commentators (including Deloitte) are now highlighting a more “holistic” approach to compliance, to meet the demands of multiple regulators, changing regulatory approaches and ever more complex business models. However, to achieve this approach, firms need to have the right calibre of staff, something which appears to be in relatively short supply at the moment.
So, the war I’m talking about is the term that’s been used quite widely in the press – the “war for talent”.
The drivers for this “war” are numerous and diverse. Firms need people with the right skills and experience to embrace a new way of working in compliance. But sitting behind this is another very important factor – those people will be under greater pressure than before to keep their skills and knowledge up to date, given the sheer weight of regulatory change that’s taking place. And to do this requires training.
The drivers for change
So, what are these drivers? Well, the first one is how compliance is perceived by the business. There is now more of a need for compliance to become a trusted business adviser rather than a policeman or an enforcer of rules.
This won’t be particular news to anyone who has been working in compliance over the last few years; but this approach doesn’t work unless the compliance staff have the right “soft skills” including relationship management and communication skills, to back up their technical knowledge.
The second one is the changing face of regulation. In the last five years in particular, there has been a growth in the amount of regulation affecting firms directly from the EU – with Directives too numerous to mention. Couple that with an ever-increasing amount of activity generated by both the FCA and the PRA in the UK, and the compliance department’s span of control in terms of regulators and regulatory developments is increasing. The result, in layman’s terms, is a lot more plates to keep spinning at the same time.
The third driver is the need for compliance to take this more holistic approach to its relationship with the business. In its report, Deloitte particularly highlighted the fact that some compliance departments may in future restrict their activities to the core “second line of defence” role of providing assurance. The other “advisory” pieces of work (including regulatory relationships) would therefore be dealt with by other departments. The problem with this approach though, is that compliance can become too narrow in its outlook and become disconnected from what the business is trying to achieve.
However, what businesses want and need from their compliance departments is changing. As I said before, they are looking more and more for someone who is a trusted adviser, with a broad range of technical knowledge and skills, often extending beyond what would be traditionally be considered as falling within compliance’s remit. In short, the job would appear to be getting harder and the skills and knowledge needed to do it, greater.
So what does this mean for training?
It goes without saying that training is important for compliance teams – very important. Not only do the right people need to be recruited but they also have to be offered the right opportunities for training and development. These are not just so they can feel more comfortable about being able to do their jobs, but also so they can feel that they are progressing and developing in their overall skill set, and ultimately, their future careers.
All of this leads to a greater chance of retaining good staff – part of winning the war for talent is not just recruiting good people, but keeping them.
So, what does a good training programme look like for a team of compliance professionals? The answer to this will vary from firm to firm, but there are some fundamental areas of good practice that will be followed in many cases.
Teams will often consist of more experienced professionals, as well as those newer to the role. In both instances, people will have development areas, and often, firms employ tools such as skill matrices, to help them establish which skills need to be developed and with what priority.
Then programmes of training have to be devised which fit the needs of the business whilst providing the right level of benefit in terms of value for money and long-term personal development.
Some firms will no doubt take the approach suggested by Deloitte, and construct a formal, structured curriculum of activity, sometimes within an “academy” framework (an approach actually adopted by the FCA). Others may be less formal, but no less serious.
Whichever approach is taken though, there is much merit to harnessing the power of external training providers. Not just in terms of the time saved, but also the expertise and specific insight they can bring. And also, if formal examinations are considered a core part of a learning programme, the choices are now substantial.
So, with the help of Industry Events Online, the war for talent can be tackled head on – and hopefully won.
By Martyn Oughton a Professional Member of the International Compliance Association (ICA). Martyn now writes a regular blog for Industry Events Online focusing on the importance of training in all aspects of compliance. Read Martyn's other publications at Martyn's Writers' Residence website.
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