Market Update

Q4 2009

Recruitment in Asia

Asia is at a very interesting stage right now. The recovery in asset values (property, equities and commodities) has been very encouraging. This has largely been driven by:

  1. Dramatic reduction in the "fear" factor. Does anyone remember Lehman?

  2. Major fiscal stimulation in most Asian economies

  3. Nascent recovery in "export" markets, notably the US and Europe

  4. Rather more concerningly, the fact that planet earth is awash with cheap money and Asia looks good right now

The real economies have obviously fared much better than the US/Europe. This can be attributed to having avoided many of the worst excesses of the finance sector and of course the fact that in general debt levels (particularly government debt, Japan excepted) are low, allowing government a great deal of flexibility. To some degree, developing Asia is still benefitting from the policies that flowed from the 1997 crisis.

Having said all that, "decoupling" has been debunked so it seems likely that 2010, bearing in mind debt and unemployment levels in the developed world, will be a period of slowish growth (by Asian standards) with the real potential for further shocks bearing in mind that confidence is still a trifle fragile.

Still Asia will remain the place to be!

Let’s look at 3 areas more specifically:

  1. Non banking executive recruitment (Principally MNCs but also local companies)

  2. Front office banking

  3. Back and middle office banking

Non Banking Executive Recruitment

This is a vast arena encompassing all industries other than financial services. Clearly, some sectors have been more affected by the recent turmoil than others but it’s fair to say that

  • The situation has improved enormously vis a vis Q1 2009

  • It has yet to rebound to 2008 levels and probably won't

  • There is quite a lot of selective hiring in key functional areas, notably:
    • Internal audit
    • Controls
    • Risk Management

  • The general interest in bright commercially astute, solutions oriented professionals ideally with a combination of "East" and "West" experience remains strong.

  • Salaries are creeping up again but not very quickly.

Front Office Banking

  • Seeing a thaw in headcount/hiring freezes with approval being granted for strategic expansion and some tactical hires (e.g. Markets, Equities, Fixed Income, Derivatives, Prime Broking, Fund Services, some Asset Management activity). Reflective of better market sentiment, asset management growth and a focus on annuity-type businesses and those that are non-balance sheet intensive.

  • Still prioritizing internal back-fills/ replacements ahead of external hires (Seeing some Euro/US candidates moving internally as well as local moves).

  • Appetite for headcount will exist in Q1 but general reluctance to offer any guarantees will postpone some recruitment activity Q2 (post bonus-season).

  • Still seeing a growth in boutiques (specialist brokerage firms expanding or setting up in Singapore).

  • Overall market sentiment is cautious but with pockets of optimism.

Private Wealth Management

  • Significant team movements in market, creating additional appetite/ opportunities.

  • Continuing perception that European booked assets may migrate to Asia (especially Asian assets historically Swiss-booked).

  • Continuing shortage of senior private bankers in Asia.

Back/Middle Office Banking

  • Positive market sentiment (the worst is over) leading to more confidence for employers to start recruiting (although employers are still very selective in hiring process) and employees to start exploring.

  • Employer market turning to employee market (candidates have more career options to choose from).

  • Stability and career progression are prime considerations in moves.

  • Salary increments and Variable Bonus for FY2008 have been modest. Some banks have moved or are moving into deferred Variable Bonus payouts. However for FY2009 (pay out in early 2010), there is an expectation of increment and bonus (in line with improved economy, and also as part of retention efforts). Staff turnover more moderate (about 10%) but likely to move back to 10%-15% range.

  • Increasing demand in strategic projects, process reengineering, risk management, control/governance roles. Slow down in hiring for BAU back office except product control at the junior to mid level with exotic/derivatives product experience.

So overall, executive recruitment has rebounded quite strongly in Asia. Having said that, only time will tell how the employment situation will be affected by the inevitable reduction in fiscal stimuli in the region and whether external factors (developed country growth, regulation, trade issues) will prove benign or otherwise in the coming years.

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