DBS’s workforce has surged over the past year, but it is becoming a less generous paymaster. The bank’s average employee now earns 5% less than in 2016, according to its full-year financial results.
Headcount stands at a record 24,174, up by almost 2,000 (9%) year on year. Singapore’s largest local bank has not been on a hiring frenzy, however.
The rise was partly fuelled by the integration of ANZ staff into its business. In 2016, DBS acquired the Australian bank’s retail and wealth units in Singapore, Hong Kong, China, Taiwan and Indonesia. Staff in the former three markets joined DBS is 2017.
Technology “insourcing” (as DBS calls it) also explains some of the headcount increase. As we reported last year, the bank has been moving development jobs in-house, having previously used third-party IT vendors.
DBS’ results show that it has 1,837 more insourced and ANZ-integration staff than in 2016, although it doesn’t split out the two employee categories.
The firm has also been recruiting, albeit on a smaller scale. It plans to add 200 people to its technology team and some of this new talent came on board last year, which helped bolster its 2017 headcount.
But while onboarding all these new employees has obviously increased staff costs at DBS (they are up 3% year on year), costs per head – total employee expenses (such as salaries and bonuses) divided by total headcount – are down 5%.
DBS spent S$116,034k on its average employee in 2017, down from $122,781k the previous year. What explains this fairly significant decrease? DBS has successfully retained many of ANZ’s well-paid private bankers and priority bankers, but the bulk of the transitioning ANZ staff work in less lucrative retail and support roles. Moreover, the ex-ANZ workforce also includes staff in China, not just people in the high-cost markets of Singapore and Hong Kong.
In technology, some of DBS’s new staff are based in India, where salaries are lower than in Singapore. The firm opened DBS Asia Hub 2, its largest IT centre outside Singapore, in Hyderabad in 2016 and was aiming to hire 100 developers there last year. It also added both tech and non-tech employees in Mumbai, after opening its new India headquarters there last September. DBS has been granted in-principle approval for local incorporation in India and plans further expansion this year.
Don’t feel too sorry for DBS staff. They still comfortably out-earn their peers at Singaporean rivals OCBC and UOB, according to our November analysis of pay per head across the three banks.
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