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The importance of a strong employee value proposition in risk and compliance

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As a recruiter specialised in placement of legal, HR and compliance professionals, we experience the tight labour market, especially for compliance and risk professionals, on a daily basis. I read with great interest the article "Addressing the revolving door in risk” published by the Mc Kinsey Global Institute, and would like to share hereafter the authors’ ideas on how companies can create a stronger employee value proposition for risk and compliance talent.

Mc Kinsey’s research, zooming in on a data set of 17,000 risk and compliance professionals, reveals “that companies are already hiring people into these roles from an extraordinarily wide range of backgrounds. They looked at which industries and occupations compliance and risk workers are coming from—and whether they’re staying to build careers in risk”.

According to the authors, the talent scarcity that has prompted organizations to hire candidates having a wide range of backgrounds may be due to risk and compliance being relatively new as a formal profession, while it may also be due to difficulties in retention. Their research indicates that only a small percentage of professionals stay in the field long-term.

Indeed, due to the talent scarcity, companies are encouraged to recruit from a broader range of backgrounds rather than waiting for candidates who perfectly match all job specs. Irrespective of their initial professional roles, individuals transitioning into the field of risk and compliance typically carry with them an array of transversal skills from their previous work experiences. “These include information processing (the ability to compile, categorize, tabulate, audit, and verify data quickly and accurately), inductive reasoning (the ability to combine pieces of information and form general conclusions), the ability to navigate a complex organization and influence others”.

As risk and compliance become increasingly essential functions, it is imperative for businesses to position these areas as appealing career options, to attract more entry-level talent and ensure that a growing number of individuals stay within the sector to progressively build and enhance their expertise.

To enhance retention, the article discusses strategies for companies to improve their employee value proposition in the field of risk and compliance. It emphasizes the increasing importance of risk management due to a volatile and interconnected world and provides the following recommendations:

  1. Articulate purpose: Define the purpose of risk roles, emphasizing their contribution to organizational stability, customer safety, and adherence to the rule of law. This purpose can be especially appealing to younger generations, like Gen Z.
  2. Rethink role responsibilities: Reevaluate specific roles, especially junior-level compliance positions, to make them more appealing by reducing administrative burdens, hereby paving the way for enriching compliance positions, which allow workers to exercise more judgment.
  3. Provide learning and advancement tracks: Offer clear pathways for junior-level professionals to become senior risk leaders, including coaching and learning opportunities in predictive analytics and scenario modelling.
  4. Encourage lateral rotations: Promote cross-functional experiences to break down silos and provide employees from various functions with a better understanding of risk management. Beyond merely rotating roles, integrating risk and compliance staff in diverse cross-functional projects could enhance their connectivity with the broader organization.
  5. Review compensation: Ensure competitive compensation to attract and retain talent in the risk field, especially as demand increases.
  6. Elevate the function: Transform risk management from a back-office function into an integrated part of the organization, similar to the evolution of technology professionals.

Dilber, F., White, O., Madgavkar, A., & Kristensen, I. (2022, 6 december). Addressing the revolving door in risk. McKinsey & Company. https://www.mckinsey.com/capab...

Authored by Ilse Tack - 15 Mar 2024

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