2010 started well in Asia. The asset price increases referred to in our Q4 2009 update have been sustained and employment growth has continued. Singapore's unemployment rate has eased to just over 2%.
Singapore is an export led economy, and as such, the health of its major trading partners is vital to its success. Intra Asian trade remains robust. Continuing growth in China is a big contributor to this. Having said that, the US and Europe also seem to have stabilised. The economy as a whole is doing well and is clearly in the upper range of our Q4 2009 expectations.
As ever, Singapore is really a tale of two (albeit closely interrelated) economies. On the one hand, it is a small open economy of 5 million people. This "economy" is all about trade. This in turn is influenced by the health of the global trading environment. This aspect of Singapore's economy was seriously affected by last year's downturn and is now coming back.
On the other hand, Singapore also plays a role as a regional hub for industries of all types. Almost all major multinationals will either have a SEA or an APAC headquarters here. Employment in this high skill / high salary "sector" is directly driven by the health of China, India and so forth and is largely divorced from the local economy.
This phenomenon is even more apparent in banking where Singapore has been extremely successful in positioning itself as both THE Asia Wealth Management hub and also as a truly global centre for many back and middle office banking activities.
The good news at the moment is that all of these sectors are doing well simultaneously.
Let's look at 2 areas more specifically.
Non Banking Executive Recruitment
The rebound in this "sector", alluded to in our Q4 2009 report, has continued. Virtually all industries are now back in "hiring mode".
In many companies the "normal" level of recruitment was synthetically depressed by blanket hiring freezes. Now that these have been lifted, a strong correction is occurring.
As ever, demand is strongest for commercially astute, solutions oriented professionals ideally with a combination of "East" and "West" experience.
Naturally, salaries are also beginning to rebound. People moving positions are generally getting 10% plus salary increases.
Investment Banks are increasing recruitment activities. Transaction and Securities Services businesses have also seen an up-tick in activity in Q1. Private Banks are still expanding particularly in the front office space.
Front office areas in high demand include:
Equities sales, Prime Broking sales, Prime Broking client services, Sales Trading, Fixed Income sales, Derivatives sales.
Custody sales, Custody client services, Portfolio risk.
Senior Relationship Managers, Senior Investment Advisors, Product Managers/ Specialists.
Back-Middle Office areas in demand include:
Risk management, compliance, financial reporting, internal audit, operations, strategic projects across operations / finance due to various integrations / offshoring / migration / efficiency efforts.
Business growth in emerging markets e.g. Indonesia, Vietnam, Thailand is also creating demand for professional staff.
Non-regional banks are significantly expanding operations in the region (Scandinavian, Middle Eastern and Australian banks in particular), with particular focus on non-balance sheet intensive activities (typically securities sales/sales trading).
Continuing trend of boutiques (External Asset Managers, Hedge Funds, Private Equity funds, etc) setting up and hiring from banks.
In summary, executive recruitment has rebounded quite strongly in 2010. We are expecting demand for quality professionals to remain strong. Having said that, this demand is ultimately predicated on the major global economies being able to sustain their recoveries as fiscal stimulation is wound back.