It’s the second half of the year – typically a cost-averse period for banks as budgets dry up until bonuses are paid. If you’re negotiating pay for a new banking job in Hong Kong, you need to know what you’re up against in the current climate.
To give you a hand, we’ve asked recruiters to identify some of the key compensation trends they’re seeing in the Hong Kong banking sector.
1. Don’t get too pushy on pay
Unless you’re working in a talent short job sector (see below), this is not a good time to negotiate too hard on your base pay. “Many banks’ share prices are at the lowest level seen since before the financial crisis – Deutsche Bank, Credit Suisse, Barclays and HSBC for example – and therefore the pressure on costs will continue to be a core focus for them,” says Nick Lambe, managing director of recruiters Links International in Hong Kong.
2. The bonus pool is shrinking
“There is downward pressure on the bonus pool for 2016 given the headwinds in the global economy, although this should be partially offset by larger than average headcount trimming in the first quarter,” says Adam Jeffes, associate director of financial services at recruiters Morgan McKinley in Hong Kong.
3. And getting more spread-out
“And given these revenue challenges, I expect the bonus spread between strong and average performers to widen, as it did to some extent the previous year,” adds Jeffes.
4. Money behind the scenes at private banks
It’s not only relationship managers who are picking up good pay rises in Hong Kong private banking. The risk and compliance professionals who support them are also in demand and can secure 20% to 25% increments if they move banks, says Maggie Li, associate director of banking and financial services at recruiters Randstad in Hong Kong. “A few major private banks are expanding while Chinese firms (BOCI, CCBA, for example) are growing and attempting to attract talent with above-market increments.”
5. Good pay for travellers
An increasing number of back and middle-office jobs in Hong Kong require frequent travel to manage staff in India and other offshore locations. Candidates who are based in Hong Kong but are prepared to spend much of their lives elsewhere in Asia are in short supply and can command a pay premium, says Siddharth Suhas, regional director of recruiters Hudson in Hong Kong and Guangzhou.
6. Chinese banks paying more to get the best
Chinese investment banks are dominating revenues tables in Asia, but are still struggling to attract the best bankers. “So in Hong Kong these firms are willing to offer premium salaries to mainland Chinese professionals with international experience,” says Rebecca Chan, director of recruitment agency Michael Page in Hong Kong. “Back-office professionals moving from global to Chinese banks are also seeing pay increases of 15% to 20%.”
7. These are the well paid parts of banking compliance
If you want to work in a compliance function where large pay increases are on the cards when you change banks, try these growth sectors: financial crime, anti-bribery and anti-fraud. “Strong candidates can pick up 20% increments,” says Chan
8. Or try…insurance
“Insurance sector compliance roles with a regulatory focus are the ones to watch out for pay-wise because the Independent Insurance Authority in Hong Kong is being set up later this year,” says Suhas. “We are seeing 20% to 40% increments in this area.”
9. Good cash in Chinese credit risk
“Banks in Hong Kong are looking to increase capability in their credit risk teams, particularly to focus on Chinese clients,” says Jeffes from Morgan McKinley. “Mandarin language skills are in high demand in credit risk and these candidates can get 20% pay increases if they move banks.”
10. Pressure on equity research pay in Hong Kong
“Due to the lack of deal flow in Hong Kong this year and increased competition from Chinese firms there’s significant revenue pressure on equity research at global banks, which is likely to impact on compensation,” says Jeffes.
11. PM no longer a cash cow
Regulatory project management is no longer a ticket to riches. “A lot of project managers were hired a year ago to manage the implementation of the US tax regulation FATCA. But now these processes are in place – PM is flat,” says Chan from Michael Page.