A snapshot of risk and quant jobs in 2024

As we enter the final months of 2024, now is perhaps a good time to review the current state of the market for risk and quant jobs, as well as look ahead to what the future may hold in 2025.

Overview of risk and quant jobs

It has been a relatively subdued year for risk management recruitment overall, albeit with a few bright spots in Q2. Many employers have continued to show caution in the face of slow global growth, elevated interest rates and high inflation earlier in the year. The timing of the UK’s General Election also took many people by surprise, creating uncertainty just as the economy appeared to be gaining some momentum.

This year, risk departments have become increasingly cost-conscious, which has led to hiring freezes, consolidation, redundancies and the off- and near-shoring of roles. Despite this, however, we believe there are many reasons to be positive for the recruitment outlook in 2025.

Firstly, the financial system remains relatively healthy, with banks currently well capitalised. The underlying demand for risk and quant professionals is also growing, as cost-cutting measures leave teams increasingly underresourced. Lastly, inflation now appears to be under control, interest rates have come down from their peak, and further green shoots of economic recovery may be on the horizon.

Many businesses will now be awaiting this year’s Budget on 30 October to gain more insight into what the political, economic and commercial environment is likely to be over the coming 12 months.

For a more in-depth summary regarding the outlook for risk and quant jobs, please click here to read our latest Risk Market Update.

Risk market breakdown

While risk recruitment has remained broadly flat in 2024, some areas of risk have performed better than others. Here is a breakdown of the factors and trends affecting each of the risk markets that we cover.

Credit risk

The growth of private debt over the past decade shows no sign of slowing down. And pressure on the UK Chancellor Rachel Reeves to redefine the key debt measure could see an acceleration in the growth of real assets within the private credit sector. Among pension funds and other buy-side investors, this could drive further demand for candidates with experience of real assets, especially infrastructure.

Meanwhile, Thames Water has been in the media spotlight recently due to its debt levels and refinancing issues. But the utility company’s woes are likely just the tip of the credit risk iceberg. Companies that enjoyed debt at a low cost before the pandemic now need refinancing in a much higher-cost environment. This situation is a consequence of the usual credit cycle, whereby commercial debt increases in periods of low interest rates until it forms a bubble. However, the steps taken to shore up the economy during the pandemic have delayed the bursting of this bubble, while steep increases in interest rates to tackle inflation have only compounded the problem.

These developments could have a significant impact on credit risk jobs. The most obvious outcome is an increase in demand for individuals with experience of managing credit risk through a downturn, as companies seek to refinance in a more challenging interest rate environment.

Market risk

The market risk hiring landscape has been relatively quiet over the past few years. Nevertheless, there has been a noticeable uptick for market risk jobs over the last six months, primarily driven by the commodities sector. In this space, both commodity firms and hedge funds have been actively recruiting talent from banks, which means these roles must then be backfilled.

As a result, a chain effect is being created where candidates move between firms within the same function. In some cases, demand has expanded to include candidates without specific commodities expertise, thereby organically growing the talent pool. However, we do not expect this high pace of hiring to continue at the same rate over the next six months.

First-line risk teams in banks and hedge funds continue to approach second-line market risk functions for staffing, although this trend is currently only occurring in small volumes. Hiring in other asset classes has remained comparatively subdued, with sporadic recruitment mainly occurring to replace departing staff.

More broadly, market risk is increasingly focused on automation, integration, enhanced stress testing and scenario analysis. These shifts are moving Market Risk Managers away from their traditional roles of position monitoring, risk assessment and generating business insights.

Investment risk

Demand for investment risk jobs has been relatively flat throughout 2024, with minimal hiring activity and limited movement.

Recently, three large asset managers announced redundancies, including the departure of two Heads of Investment Risk. While these restructurings may create more demand next year, the market is still expected to maintain a steady but limited flow of new positions across all levels overall.

It is also worth noting that a significant number of senior candidates are currently interested in exploring new opportunities. If even a few begin moving roles, this could trigger a surge in vacancies by the middle of next year. This potential shift may be linked to the 3-5 year tenure that is typical in such roles, coupled with the fact that the last major hiring wave in this sector occurred around three years ago.

Operational and enterprise risk

Operational risk and enterprise risk functions continue to hire across various industries at all levels. Growth has been particularly strong in sectors outside of financial services, such as pharmaceuticals, telecommunications, and utilities – industries in which risk practices have historically been slower to develop.

In contrast, there has been less organic growth within the financial services industry. Many well-established companies are opting not to replace senior-level staff when they leave, instead choosing to either hire at a more junior level or leave positions unfilled. Despite the limited number of open roles, there is a high level of interest from candidates exploring new operational risk jobs, especially at the mid-level of the market. There is less hiring activity at junior or senior levels.

Although there are few signs of imminent regulatory changes, third-party risk management appears to be an area of focus. Additionally, ESG (environmental, social, and governance) and climate risk remain central to client hiring discussions.

Over the past six months, several smaller organisations – which have often lagged in developing their operational risk functions – have brought in external experts to guide best practices as an interim measure. This trend is expected to continue as these smaller firms increasingly recognise the value of robust operational risk management.

Asset management in Europe

Over the past six months, hiring appetite among European asset managers has been somewhat reduced, but this trend is expected to shift in the coming six months. The demand for talent, particularly in operational risk, is rising, driven by regulations such as DORA (Digital Operational Resilience Act) and Solvency II. Additionally, ESG remains a key priority, with firms seeking candidates skilled in stress testing and scenario analysis, especially in Luxembourg, which has seen more activity than other regions.

There is a growing interest from candidates, particularly at the senior level, with more Heads of Risk exploring alternative roles for growth and career advancement. The urgency to hire also appears to be increasing, likely due to the need to fill positions before the end of the year to align with the 2024 budget.

Looking ahead to 2025, clients indicate they have hiring budgets in place, suggesting a positive outlook for the start of the year. Countries like Ireland, Luxembourg, the Netherlands and Switzerland are offering higher compensation packages compared to other European locations – and with rising demand for staff across these nations, this trend is expected to persist.

Quantitative/Model risk

Quantitative risk has been relatively quiet over the past six months, but the need for hiring is starting to increase, primarily driven by regulatory requirements, specifically Basel 3.1 and SS 1/23.

Basel 3.1 is likely to have a major impact on hiring. The regulation, which aims to enhance capital requirements and risk frameworks, will require existing IRB banks to do significant amounts of work to be compliant. Some of this work will already be underway, however, the publication of the PRA’s ‘near final’ supervisory statement and final timeline for implementation (July 2025) should result in an increase in demand for credit risk modellers and related quant jobs.

Within model risk management (MRM) specifically, the new SS 1/23 regulation came into force in May 2024, and all banks in scope had to ensure their compliance. In reality, there is still much work to be done and there remain people and skills gaps in most firms. AI model risk is a particularly challenging area, as model risk is becoming responsible for overarching AI governance in many firms. As such, existing model risk managers are being retrained and re-tooled to be able to effectively manage AI model risk. This is more challenging when LLM (large language model) type models are involved, and we expect some specialist hiring in this space.

Ultimately, we expect SS 1/23 and Basel 3.1 to result in the need for additional people resources. The full impact on hiring will likely become more pronounced in 2025 as firms finalise their new headcount plans/budgets and location strategies. Overall, however, the level of recruitment into MRM since May 2024 has been lower than expected, mainly due to budget constraints. Indeed, a shift towards cost efficiency has been a key theme within the MRM space this year.

To manage the costs associated with regulatory implementations, many banks are exploring offshoring and nearshoring strategies. We expect this trend to create opportunities both in established financial hubs like London and in offshore locations where firms look to optimise their workforce​ costs.

Heightened regulatory demand has also led to an uptick in hiring by consulting firms as they support banks in managing compliance with the various new regulatory requirements in the meantime. This indicates a broader growth in the market and creates additional vacancies as firms seek specialised expertise to help navigate new regulations​.

Front office quantitative analytics

Throughout 2024, the hiring landscape for pricing quants has been shaped by several key trends, many of which we expect to continue affecting quant recruitment next year.

• Increased competition and compensation: The market for pricing quants remains highly competitive, with firms across both the sell side and buy side raising base salaries and offering substantial bonuses to attract and retain talent. The focus is on building teams that can handle complex derivatives and commodities pricing, with an emphasis on adapting to high-volatility markets.
• Tech skill integration: As financial institutions automate and digitise pricing models, they need quants who can bridge traditional mathematical techniques with modern tech skills. Demand is therefore rising for quants with expertise in emerging technologies like machine learning, AI and blockchain.
• Flexible and hybrid working: While quants have traditionally worked in office-centric environments, the growing acceptance of remote and hybrid working models is becoming a significant draw for top talent, especially as it enhances work-life balance and access to global talent pools. We are also seeing a reverse shift from the buy side back to the sell side in pursuit of a better work-life balance.
• Diversity and inclusion: Many firms are keen to diversify their quant teams, so there is a clear focus on hiring a broader range of candidates, including women and underrepresented minorities. As a result, specialised recruitment initiatives and flexible hiring processes are being developed to make the field more inclusive and appealing.

Thinking of making a change?

Whether you’re a business looking to expand your risk management team, or a professional seeking a new role within the industry, Barclay Simpson is here to help.

Please contact us today to set up a call with a specialist consultant, or click here to review our current job opportunities.