Don’t expect a flood of high-level resignations now that China has followed countries like the UK and France in curbing bankers’ bonuses.
Chinese banks, trust companies and financial units of other government-owned enterprises must withhold at least 40 per cent of bonuses for top executives for a minimum of three years and can recover payments if poor performance causes losses, under the new regulations from the China Banking Regulatory Commission.
While some mid to senior-level bankers will now be more tempted to apply to Western banks in China, the impact is diluted because bonuses at foreign firms haven’t been brilliant this year either, comments Eunice Ng, director of search firm Avanza Consulting.
Moreover, sending your CV to Citi or Standard Chartered is a lot different to actually landing a job there. Historically, not many experienced professionals have joined international institutions directly from the state-owned banks.
“I don’t anticipate a massive senior movement now either. Foreign firms mainly look to hire from themselves. The product knowledge they require and their culture are very different to a Chinese bank,” says Jason Tan, manager of banking, commerce and finance at Robert Walters.
Stephen He, senior consultant, banking and finance division, Randstad, says it’s too early to judge how the bonus regulation will affect recruitment. “But my initial impression is that it won’t be easy for the Western banks to import the ideal candidates from local competitors.”
Underlying the whole employment market is the large gulf which already exists between compensation at Chinese and Western banks. This means the new rules, which deal only with bonuses, are unlikely to have a major impact on candidate movement. Senior banking executives are often appointed by the ruling Communist Party and most won’t suddenly quit their posts because of the CBRC regulation.