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Japan: preview of 2009

Good(ish) year

Risk management and compliance

With the financial crisis showing no sign of ending, regulatory gurus will remain in demand in 2009. “We see a fundamental shift to less risk in the investment assets that financial institutions take on their books,” says Gregory Toole, a director at Hudson. “We also see repercussions of the current financial meltdown resulting in the mandatory strengthening of risk management functions.” Jivago Matsuoka, account executive at Robert Half, says an increase in financial regulations will further increase the already strong demand for compliance and legal experts.

Financial control and internal audit

It has traditionally been difficult to hire bi-lingual financial controllers and internal auditors in Japan due to the dearth of qualified Japanese CPAs, says David Swan, director financial services, Robert Walters. “Because of this and the current need for improved internal controls and risk management, we expect demand for good candidates in this area to remain steady throughout 2009,” he adds.

M&A and private equity?

Japan saw the lowest number of IPOs in a decade in 2008, yet Japanese companies are still comparatively cash rich. A lot of money is sitting and waiting around for good investment and acquisition opportunities both at home and abroad. Companies and private equity funds might be set for a bit of bargain hunting in 2009. “Funds will also invest to fix portfolio companies by bringing in executives fit for CEO and CFO positions when funds become aggressive again in segments like alternative energy, healthcare, social media and retirement services. This will result in an increasing demand for M&A and due diligence experts,” says Matsuoka.

Contractors

Continuing budget constraints and headcount restrictions are likely to result in an increase in professional contract and temporary recruitment solutions for 2009. “In times like these, we tend to see hiring managers also taking a more risk averse approach to permanent hiring and opting for temp-to-perm arrangements,” says Swan.

Personal financial advisors

More and more people will be looking for financial advisers to manage their accounts through the downturn, says Matsuoka. And with Japan holding over a third of the world’s savings, a lot of households are considering investments in higher-yield financial products due to the low domestic and foreign equity valuations. “The need for personal financial advisors will be strong. Also, a growing numbers of advisors will be needed to assist the millions of workers expected to retire in the next five to 10 years,” adds Matsuoka.

Bad year

Getting a pay rise

Base salaries for most mid to senior level positions across the finance industry in Japan have remained largely unchanged for the last few years and with a recession looming, there’s no reason to predict any improvement in 2009. “Any variations in base salaries have been generally related to individual skill sets and roles where there has been particularly high demand. Most people working in banking in Tokyo are expecting little to no bonus for 2008,” says Swan.

Job losses at Nomura

Integrating a failed US bank into a Japanese firm would never be easy at the best of times, never mind trying to do it in the midst of a global recession. Nomura began slicing its Tokyo headcount in late 2008, and expect more layoffs in 2009. As Azuma Ohno, a Tokyo-based analyst at Credit Suisse Group AG, told Bloomberg: “Nomura is on course to post a big loss if they won’t do any restructuring. Nomura should do more job cuts, including its own employees.”

Fancy financial products

The massive decline in popularity of many credit and exotic derivatives, and securitized financial products means there will be little demand for skill sets in these areas. The slump will affect positions from sales and trading to IT, operations and product control.

HR

Recruiters will feel the pinch in ’09 too, as Swan explains: “ongoing focus on reducing costs, hiring slowdowns and fewer strategic HR initiatives are likely to result in a cooling in HR hiring requirements across most areas of the finance industry for 2009.”

Hedge funds and prime brokers

“Without question 2008 will be remembered as the downfall of hedge funds,” says Toole. In 2009 rising redemptions will lead to more funds failing and fewer jobs in the industry. Prime brokers will be hit too. Morgan Stanley, one of the world’s two biggest prime brokers, has already trimmed its PB team in Tokyo.

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