Standard Chartered is paying a lot for its senior back and middle-office employees in Singapore, whose earnings can eclipse those of counterparts at rival firms by up to $150k (US$112k). But the bank’s generosity, in particular its targeted bonus programme, is now helping new CEO Bill Winters ward off a potential exodus of risk, compliance, audit and operations staff.
Recruiters tell us that enquires from Standard Chartered’s back and middle-office employees in Singapore have been rising during a traumatic past six months, which have seen the bank announce a major restructuring plan – including the closure of its equities business – in a bid to combat tumbling profits.
But when these same job seekers find out the compensation on offer elsewhere many decide to stay put. “SCB overpays, which makes leaving difficult as it’s very hard to get a similar-paid role at Citi, HSBC or anywhere else,” says one of the recruiters who spoke to in Singapore, all of whom asked not to be named because of client confidentiality.
Unlike all its major competitors in Singapore, Stan Chart gives guaranteed “targeted bonuses” to most back and middle-office employees from VP level and above. If they reach a minimum of level three on a five-level performance scale (ie they hit their annual target), they get the bonus previously agreed, or more. “I know someone senior in operations at SCB in Singapore whose salary is S$250k [US$186k] and whose target bonus is S$150k [US$112k], so really his basic compensation is S$400k [US$298k] because like most people there he at least meets his minimum target and always gets his bonus,” says the recruiter.
He adds that most senior back and middle-office managers would need to take a compensation cut of S$50k (US$36k) to S$150k (US$112k) when joining a new bank – mid-ranking staff would need to sacrifice at least S$25k ($US18k). “No other bank in Singapore is paying over S$400k [US$298k] for senior managers – it’s ridiculous money,” he says.
Stan Chart’s lavish pay policies were first introduced around 10 years ago to enable it to recruit employees in the face of stiff competition from larger rivals such as Citi, Barclays and HSBC who were also expanding their support centres in Singapore at the time, says another Singapore-based headhunter. “They weren’t as big a brand then – to grow their support headcount they had to pay more than the others did, at all levels.”
In the past year, however, the bank’s compensation advantage has helped it retain support staff who might otherwise have been spooked by layoffs in other departments and enabled it to hire in compliance, a competitive sector where salary rises are reaching 30%. “I also think the good comp has been needed for retention to counter the more ‘political’ culture there that has developed recently and which Mr Winters will look to change,” says a third recruiter in Singapore. “When I began recruiting for the bank it was known as a very friendly, non-ego based, inclusive place to work.”
Charged with reducing costs, it remains to be seen whether CEO Winters will take the axe to targeted bonuses. Doing so in the short term seems unlikely because it may trigger an exodus of senior staff from vital risk and compliance functions. “I’ve already been approach by people – up to MD level – about leaving Stand Chart. Singaporean banks like DBS would be circling if the pay gap narrowed too soon,” says the third recruiter we spoke with. “But longer term, the days of throwing excessive cash at people will be over.”
“Stan Chart’s now on equal footing with the likes of Citi and HSBC in Singapore. It’s huge here and very committed to the country, so in the longer run once its business picks up it should be able to bring pay in line with the market and keep people on board,” adds the second headhunter.
Standard Chartered in Singapore has not yet responded to a request for comment.