Here’s our look at the year that was in Hong Kong.
Layoffs loomed large in late 2011
The rate of redundancies in the Hong Kong banking sector gathered pace in the final months of the year, says Jared Ng, regional consulting director, PeopleSearch. “We do feel the nervousness when talking to people in the market, and job security has indeed become a main concern for banking professionals.”
Ng says compared with 2008, a larger proportion of the recent retrenchments are happening at the top of organisations, so savings can be more substantial. “Since August, we have come to know of many positions that were made redundant at the regional level in various MNC banks and these jobs tend to be more strategic in nature.”
Bonus pools took a big dip
Bonuses have been hit by a drop in market revenues, and even accrued bonus pools may not be fully distributed because of press and political scrutiny, says Paul Aldrich, managing partner, CTPartners. Although the structure of incentive compensation – such as deferral and claw-back periods, and the mix between cash and stock – is unlikely to be any more onerous than in 2010, this is a minor consolation when absolute levels have reduced so significantly.
“The black humour of 2010 regarding expected bonuses among investments bankers gave rise to the term ‘flat is the new up’. For 2011, this has now turned to gallows humour with ‘down is the new flat’,” adds Aldrich.
Firms found creative ways to cut hiring costs
During the second half of the year financial institutions had to be more creative with their hiring to fit fresh headcount into their newly constrained budgets, says James Incles, head of Asia Pacific, Wilbury Stratton.
He describes the example of an investment bank that wanted to hire clean-tech equity research analysts in Hong Kong. Such candidates would traditionally need three to four years’ experience and would be sourced on expensive guaranteed bonuses from other leading banks. “However, the firm targeted Chinese candidates with engineering degrees who were working in the renewable energy corporate sector. This not only reduced costs but also brought a different perspective and skill set to the team,” says Incles.
Approvals became annoyingly long
Economic uncertainty meant banks faced tougher in-house justification on every hire, says Andrew Oliver, managing director, Profile Asia. “This can make the interview process longer and in many cases it can seem quite disjointed because various boxes need to be ticked and approvals gained internally.”
Oliver says candidates find stop-start recruitment frustrating, so the onus is on banks to properly manage expectations. “On the whole employers are moving as fast as they can, but right now the corporate machine moves slowly and we are in a difficult environment. Patience is the key as nine times out of ten we simply cannot force the issue.”
More senior candidates quit the big banks
Jens Soderlund, managing partner, Sirius Partners, says he worked with many discontented bankers in 2011 to devise alternative career paths “where they can take their skill sets and move into a new niche area”. Examples include moving equity transacters into credit-officer or wealth-management-advisory roles, and shifting investment bankers into relationship-sourcer jobs with boutique buy-side firms. “It is all about being creative instead of just focusing on mainstream recruitment – sales to sales, trading to trading etc – because most of the major banks will be status quo re senior hiring for next year.”