Mohammed Khnifer wrote an article (the second in a series) that paints a disturbing picture of the job market for graduates, even as the speakers at conferences say there is a huge talent shortage in the industry as a whole. It suggests that either there is a disconnect between the skills that Islamic financial institutions want and what these programs provide, or there is not actually a shortage in the less experienced jobs available from Islamic financial institutions, and the shortage is at higher levels in management.
Neither is promising for Islamic finance graduates, but the former is more easily fixable than the latter. However, if the Islamic finance programs are in fact not offering training in the skills in demand (for which they are charging significant tuition), then a cynic would conclude that they only are involved to capture a 'hot' area of education in demand and do not have their student's best interests at heart.
I don't which one is the case, but it is in some ways a reflection of how the industry works. Most of the students or aspiring students I have talked to or received emails from are younger, less experienced people--many who recently finished their undergraduate studies--who want to work in the Islamic finance industry, but don't know how to get a foot in the door and view specialized Islamic finance training as a way to do that. However, the way the industry works, with a focus on replication of conventional financial products, this is not likely to be an easy way to break into the industry.
A far easier track is there for people with conventional financial experience who want to move horizontally within a firm or from one firm to another. Their familiarity with how financial institutions work from first hand experience makes them more appealing than someone with less experience but more training. This presents a dilemma for some people who don't want to work for conventional financial institutions because there is no substitute for the experience it provides. By recruiting people largely from within the conventional financial industry, at all levels, there will also be more likelihood that Islamic finance continues to operate in the same way it has for the past several decades and make significant changes to the mix between different products, and business models.
This is the innovation that, if done gradually to avoid disruptions and with enough care to avoid adding too much risk to the industry, will make Islamic finance evolve in a different way than conventional finance. It will strengthen the industry while at the same time providing a clearer distinction between Islamic and conventional finance. However, without providing an opportunity for younger financial professionals who are not already traveling down the well worn ruts of conventional finance, this innovation will be slowed.
Friday, June 24, 2011
Islamic finance education
Last week's newsletter (signup on the left side of the screen) was about Islamic finance education--specifically an article by Mohammed Khnifer about the challenges facing the recent graduates of Islamic finance education programs.