International investment banks are starting to boost their front-office recruitment in China as M&A and IPO activity picks up.
“The i-banking employment market was stagnant until July, but then picked up by about 30 per cent in August, all be it from a very low base,” says Kensy Sy, head of banking & finance at Talent2 Beijing.
Established global players like Goldman Sachs and Morgan Stanley have made selective high-level hires on the back of rising deal-flow. In September, Deutsche Bank strengthened its institutional sales capabilities with four new senior recruits.
And emerging trio Standard Chartered, Barclays and Nomura all plan to expand their equities platforms in the PRC.
Sy estimates that about 30 per cent of the current hiring is for new roles, while the rest is for replacing staff who have resigned or been retrenched.
Hiring is focused on front-office revenue generators – especially those in hot coverage sectors like natural resources and energy – with not so much demand for research analysts, adds Sy.
But, according to another headhunter who asked not to be named, there is also some activity in compliance – especially at BoA-Merrill Lynch – which is reorganising its merged middle office.
For i-banking roles, foreign firms prefer Chinese nationals with an overseas education and multinational experience, but who also have the local networks needed to carry out M&A deals, adds Sy.
There aren’t too many people who tick all these boxes and this talent shortage has helped China avoid i-banking redundancies on the same scale as Singapore or Hong Kong, not to mention New York or London
“It’s difficult to recruit good people in China, plus salary increments have stayed very high – 30 to 100 per cent,” says Sy. With hiring so hard and so expensive, banks in the mainland had a greater incentive than in easy-hire-easy-fire Hong Kong to retain talent, even during the worst days of the financial crisis.
As well as recruiting, firms are also re-assigning senior staff to i-banking jobs. JPMorgan, for example, recently moved Frank Gong, chief China economist, to an investment banking role.