The Singapore dollar is tumbling. This is bad news for financial services professionals in the city-state, some of whom will have had just their bonuses paid into their accounts and now seem relatively poorer compared to their peers in London and New York. But Singapore’s financial centre has another problem – persuading bankers home again.
There are some 200,000 Singaporeans living abroad, and a large proportion are financial services professionals. Singapore has introduced a localisation programme that incentivises banks to hire nationals over expats – returnees are therefore a key source of talent.
“The fall of the Singapore dollar is good for when I need to wire some money home,” says one Singapore banker working in London. “It won’t have too much of an impact if I want to return home, because this is largely down to career prospects and family.”
Last week, the Monetary Authority of Singapore surprised markets by easing its monetary policy further and prompting the Singapore dollar to fall 1% against the US$. This follows an 8% drop against the US$ over the past six months. Not all potential returnees will be as sanguine about the impact of this as the banker in London.
The ideal scenario for both expat bankers going to Singapore and returnees alike is to negotiate a package that is lucrative and paid in US dollars. Unfortunately, these expat packages are no longer possible: “All of the offers that we negotiate for overseas candidates moving to Singapore, whether they are a foreigner or a returning Singaporean, are in SGD,” says Christine Wright, managing director of recruiters Hays.
Lee Quane, the regional director Asia at the global employee assignment and relocation firm ECA, hasn’t seen the currency drop crop up too much in negotiations. The more favourable income tax regime (up to 20%) coupled with the fact that most of their expenditure will be in SGD anyway, means the majority people are not being put off taking jobs in Singapore.
Karen Yap, a Singapore-based associate director at the executive search firm Profile Search & Selection sees the same. She reveals that most of the overseas Singaporeans she talks to are more interested in where the opportunities lie, and they have become more realistic about the compensation package than before.
Investment banking bonuses are likely to rise in Singapore this year – by 5-10% – but this follows a year when Asian ex-Japan revenues swelled by 28% across the region. Base salaries for directors working investment banking in Singapore peak at around $330k, according to Robert Walters. In London, this averages out at $348k, according to figures from Emolument.
Stanley Teo, Karen’s colleague at Profile Search and a director who covers financial services, says that anyone thinking of moving to Singapore “needs to understand that they should NOT use their currency and literally convert that to local currency, ” for the simple reason that overall pay scale in Asia is lower than US or Europe. In other words, lower your expectations.
Money is rarely the main motivator for bankers moving to Singapore anyway, says Toby Fowlston, managing director of recruiters Robert Walters in Singapore. “A combination of compensation, career opportunity, travel and regional opportunity, location, company performance,” are all factors that sway Singaporeans home.