Under Cover of Darkness....

It's interesting times in our industry...

In the last quarter of 2008 and the first half of 2009, most of the big players in administration have been shedding jobs, cutting pay and reducing hours. From what we hear, 10% job cuts and a similar number in staffing cuts seem to be fairly normal. And the rationale makes perfect sense - the value of assets under administration have been tumbling with a resultant drop in fee revenue. Perfectly logical...

Except it's not. While a number of funds have announced they are closing up (and even then a fund closing needs just as much, if not more, attention than a "live" one) in reality the amount of work which is required hasn't dropped much. So this means either (a) the level of service is being dropped significantly by the major houses, (b) they are requiring staff to fill in the gaps or (c) they were running a sloppy operation to begin with. Hiring all sorts of people while times were good and never tackling fundamental probelms. Who needs to worry about things when business is walking in the door.

What has been happening in the IFSC for years is HR management by revenue budget - if I can grow my income by €100k I can hire another person. And now that times are tougher, the senior management are hidden in the staionery cupboard counting the pens... rumour has it that at least one big operation has a "procedure" for obtaining pens !!!

So now the very "management talent" who didn't know how to build a viable business in the first place are taking their revenge and have the perfect cover - the global economy is forcing our hand. It's the old carnival trick of having the punter look one way while they pocket playing card.

Normally I wouldn't be bothered because this is just an opportunity for those operations that are properly managed to build their business. But these are the guys who are trying to develop the strategy for the IFIA to get us out of this mess. Except none of them have ever managed through the tough times.

Maybe we should be calling back some of the old timers who setup the IFSC and built it up during the really hard times. They can take over.... under the cover of darkness