The international financial services (IFS) sector, which originated with the creation of the IFSC in 1987, now employs almost 20,000 people, according to the latest statistics derived from the Finance Dublin Yearbook 2006.
Overall, employment in the sector grew by over 8 per cent to top 19,000 by the end of last year. Most of the jobs in what were formerly known as ‘IFSC companies’ were created in funds, which employed 8,144 at end December, and banking and related activities, where employment grew in the twelve months by 437 to 8,008 (see Figure 1). The figures are compiled annually in a survey conducted online by Finance Dublin amongst all Irish international financial services (IFS) companies.
Commenting on the survey results, Aileen O’Donoghue, director of Financial Services Ireland, said they were ‘fantastic news’. ‘The continuing job creation in the international financial sector in Ireland is a testament to the hard work, innovation and skill of the people working in the sector. FSI is hopeful that the pending Government strategy for the development of the sector will provide an additional catalyst for further growth,’ she added.
As in 2004, there was extremely strong employment activity in the funds industry, with significant employment gains by the leading firms, with State Street International and its sister company IFS adding some 200 during the year, and with other significant players figuring, such as Bank of Ireland Securities Services, BISYS, Investors Fund Services, Daiwa Securities, GAM, Fund Management Limited Fortis, CITCO, Northern Trust, Dexia, and Mellon all featuring as expanding employers in 2005.
According to Deirdre Norris, director of marketing and communications of the Dublin Funds Industry Association, the growth in the funds industry is reflective of the growth in the number of assets being serviced by the industry in Ireland. She says that these figures now stand at €642 billion in Irish domiciled funds as at April 2006, and over €400 billion in non-Irish domiciled funds, having grown by 35 per cent in 2005, adding, ‘early indications at the start of the second quarter in 2006 show that the number of assets serviced by the industry in Ireland look set to continue to grow, and as such the numbers employed by the industry should continue to increase also’.
On the banking and allied activities side, 437 net jobs were created, with employment in the sector up 5.8 per cent to 8008. Employment size in a median IFS company is between 30 and 50, and most companies in the past year grew their employment numbers by two or three in this context. That said, there is evidence on the other hand of significant scaling down by a significant number of companies in banking and insurance in particular in response to both cost pressures, and global consolidation. Significant growers in the past year were Hewlett Packard International Bank, AIB Treasury and International Financial Services, KBC, Orix, and among smaller niche players Irish collateral manager Harbourmaster Capital Management.
Insurance, while smaller than the other two sectors in employment terms, showed an overall growth in employment of 8.1 per cent to register a net increase of 221 jobs to 2943. A big contributor here was the new European HQ of Hartford Life, while other contributors were Allianz Worldwide Care and Capita.