Ireland’s funds industry is one of the country’s biggest economic and employment success stories. But success brings its own challenges, creating a talent shortage gap that fund managers and their service providers are struggling to fill.
The big employment trends
Three key factors are shaping employment trends across the sector.
- Industry growth
In the five-year period ending December 2022, the number of Irish domiciled funds climbed 20% to a record 8,689. Total net assets rose 50% to approximately €3.7 trillion, making Ireland the second largest funds and asset management centre in Europe, and third largest in the world.
Growth in the number of funds being established and managed has in turn spurred strong and growing demand for skilled professionals across a variety of roles, including investment management, risk management, compliance and fund administration, with the sector now directly employing some 17,000 people.
- Regulation
The ever-evolving domestic and international regulatory environment continues to bolster demand for professionals skilled in compliance, risk management and the legal particularities surrounding fund operations. More regulation, and tightened enforcement, is forcing industry participants to recruit regulatory specialists and expand compliance teams as they strive to meet their regulatory responsibilities.
- Technology and digital transformation
Technology has filtered into all areas of the value chain, from portfolio management to investor servicing. But the pace of automation, data-driven decision making and digital transformation is accelerating, and no firm can afford to be left behind.
Job roles and the skills required to fulfil them are changing in response. Experts in areas such as data analysis, cybersecurity and digital technologies are in high demand among funds companies and their service providers. Developments in distributed ledger technologies, cryptocurrencies and artificial intelligence are also having a growing impact, affecting the skills needed and roles employees perform.
Cost pressures in a tight labour market
The sum impact has been a need for greater numbers of more specialised staff. That demand is pushing up competition for the right talent, with an inevitable knock-on effect on employment costs. Resurgent inflation is further fuelling wage growth, exacerbating the cost and margin pressures the fund administration industry has been wrestling with for years.
And even if administrators could afford to throw bodies at processes to meet their client and regulatory obligations, there aren’t the bodies available in the most critical areas.
All of which is bringing fund administrators back to that perennial issue: how to maximise end-to-end automation of their operations and so optimise output per employee?
Talent shortage solutions
Artificial intelligence and machine learning (as we’ll investigate further in a future blog) offer one solution. By taking on mundane tasks such as data entry-heavy transfer agency processes, AI can free staff to focus on more complex, creative activities that add real value to the firm and its clients.
Less sexy but equally impactful is workflow management. Discussions about workflow improvement came up repeatedly at the Adminovate 2023 and Irish Funds Global Funds conferences we attended recently. While firms may have introduced technology solutions around their transfer agency and NAV processes, integrating and controlling all the flows remains problematic. Which is where an intelligent, customisable business process management tool can be transformative.
Automating ad hoc workflows
Better managing and automating ad hoc tasks is a particular issue.
Changes we’re seeing in the industry – not least the shift towards private asset investing – are creating more ad hoc tasks for asset managers. There is more cash floating around, more payments, more esoteric performance calculations, more transactions falling out of workflows. A raft of processes now need to be managed separately, but they must still all be accounted for.
Any exceptions often require manual resolution, further straining staff workloads. Establishing automated workflows to deal with such ad hoc processes can therefore provide a major efficiency boon.
Finding automation wins in areas like this may not eliminate firms’ staff and cost strains, but they will go a long way to easing them.
ABOUT DEEP POOL
Deep Pool is the #1 investor servicing and compliance solutions supplier, providing cutting-edge software and consulting services to the world’s leading fund administrators and asset managers. Our flexible solution suite, developed by an experienced team of accountants, business analysts and software engineers, supports offshore and onshore hedge funds, partnerships, private equity vehicles, retail funds and regulated financial firms. Deep Pool is a global organisation with offices in Dublin, Ireland, the United States, the Cayman Islands and Slovakia. For more information, visit: www.deep-pool.com.