If you want to expand your workforce in Asia, be prepared to pay for it.
Just ask Standard Chartered. Its headcount rose 9 per cent last year compared with 2009, while staff expenses grew 17 per cent to US$5,765m, according to its annual report released this week.
These statistics show the firm is starting to fulfill its recent promises to create thousands of new jobs, particularly in Asia. In May last year, for example, it trumpeted 2,000 extra Singapore hires by 2012.
But with staff costs rising even faster than headcount, the figures also mean SCB is paying top dollar to recruit and retain the talent its expansion plans demand. As is also the case with HSBC, a candidate-led job market is forcing firms to be competitive with compensation in Asia, even if they remain conservative in other regions.
As the financial review section of the SCB annual report puts it: “The change in the external environment has also resulted in greater competition for talent necessitating appropriate retention measures in our key markets.”
For “key”, read (among other countries) Singapore and Hong Kong, where employee expenses have increased in both SCB’s wholesale and consumer divisions. Wholesale banking in Singapore, for example, grew in areas such as commodities, options and interest rate derivatives.
Bad bonuses and terrible turnover
Yet despite all the other increases, the bank’s bonus pool only rose “modestly” on 2009 levels. While all employees are entitled to an element of performance-related compensation, bonuses are increasingly concentrated in the hands of top rainmakers, rather than average achievers.
“Typically, the higher the total compensation, the greater the proportion delivered in variable form (either through a cash award, deferred shares and/or performance shares),” says the remuneration section of the report.
Two recruiters with knowledge of the bank say staff retention has been a problem over the past year. While SCB has plenty of newly created jobs in functions such as relationship management, vacancies are also opening up because too many people are leaving prematurely.
What’s compensation really like at SCB? Let us know in the comments box below.