The idea of job hopping, especially if money is the main motivation, is more or less the elephant in the room that nobody in China’s financial and banking industries wants to discuss. But, like their counterparts in more mature banking markets, young Chinese bankers now tend to shift jobs frequently, helped on their way by China’s rapid and robust economic growth.
The latest report from PricewaterhouseCoopers shows that most foreign banks in China expect staff turnover to increase between 10 and 20 per cent this year. This suggests that bank employees who were content to sit out the global financial crisis are starting to move again.
Meanwhile, human resource consultancy Hewitt has estimated that the average voluntary employee turnover rate for foreign companies across all sectors in China this year will return to pre-crisis levels of more than 15 per cent.
“I have bills, a mortgage and a car loan to pay. I will also have to put money aside for my kid. Why shouldn’t I shop around for the job that will give me and my family the most benefits?,” says Li, an employee of a large foreign bank in Shanghai. About a year ago, Li, who asked not to be named, left one of the big local banks after five years of service.
What motivates bankers to change companies?
As Li’s case demonstrates, salary rises top the list. In earlier years, when foreign banks were just beginning to explore Chinese markets, it made more sense for them to take trained bankers with existing knowledge from local firms, rather than train new ones from scratch. Overseas banks still poach people by offering competitive packages and successfully attract a large number of talented employees.
But money is not the only motivation – foreign banks in China generally enjoy a reputation for having a more positive corporate culture than domestic ones. They are famous for being willing to invest in their employees by providing training and development opportunities.
People from international banks sometimes move to another foreign firm for reasons of career progression. In the current employment market, if they feel their growth is stalled, they no longer feel bound to stay in a job for the sake of long-term tenure.
Moreover, it is becoming more common for bankers to go back to domestic firms, although only after having served several years at a global one. Increased competition for talent – especially people who understand both international financial markets and domestic banking practices – is creating more opportunities for bankers to switch roles.
As a result of all this expected movement, human resource costs at banks are expected to increase significantly this year. Most banks that froze salaries in 2009 might have to play catch up in the pay race just to remain competitive and retain employees.
But while banks are taking steps to protect their talents by focusing on salaries, there is only so long that they can throw money at people. Too much job hopping means the erosion of financial resources, clients, and corporate management style, which is obviously very negative for long-term growth and development at banks. Moreover, candidates must realise that too much change on their CVs will reduce rather than enhance their credibility.
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