Chinese banks have increasingly managed to attract non-Chinese bankers. Cantor Fitzgerald recently sued four former Hong Kong-based employees for conspiring to hurt the firm after they resigned simultaneously to join Chinese boutique bank Reorient Financial Markets. The Hong Kong High Court rejected Cantor’s claim earlier this week.
Then came the news that Bank of China International’s equity capital markets head, Marshall Nicholson, its first senior foreign i-banker, is leaving for CICC after more than five years.
The floodgates aren’t exactly opening, but…
Although mainland firms are far from teeming with foreigners, overseas talent has certainly become more visible over the years. For instance, CITIC Securities International has boosted international hiring by 5 per cent annually over the past few years, according to a recent Bloomberg report. A recruiter we spoke to, who declined to be named, says the firm is the most aggressive Chinese hirer of foreign candidates. It’s understood that some Indian bankers who have previously worked in the US have been recently added to its headcount.
Another headhunter, Jason Tan, director, financial services and banking, PSD Group, explains the rationale for getting talent from abroad: “Firms want to take their business to the next level, that is, international expansion through better governance and overall better shareholder management.”
Senior M&A expats spotted
Of course some functions, in particular cross-border M&A, are more likely to be staffed by non-Chinese than others. Jing He, associate of banking and financial services, Talent2 China, says she knows of big mainland firms which want to recruit foreigners from various regions – including Europe, the US and the Middle East – depending on their country focus.
“Chinese companies are looking for candidates who are very familiar with the local laws and regulations in these other countries. It’s a good opportunity for expats because they don’t need China experience.” That said, recruiting in this area is usually modest. Large firms have lean teams of five to eight staff and typically hire just one person every year. Normally bankers with more than five years of experience are considered and candidates with basic Mandarin communication skills are preferred, she adds.
Other positions in which foreigners have been hired include risk management and revenue-oriented executive roles, for example, head of sales and trading. Tan says Singapore or Hong Kong bankers are preferred because they have the language capabilities, share similar cultural backgrounds and are potentially cheaper than their Western counterparts. Ideal candidates typically have between 15 to 20 years’ experience. “Firms are paying top dollar, so they definitely want heavy weights.”
The pull factor
The attraction of Chinese firms from a foreign candidate’s perspective is easy to understand. China experience is much valued and there is huge growth potential in mainland-focused careers. Tan says: “These professionals are likely to be given bigger roles where they are able to pioneer something.”
The compensation gap between Chinese and Western firms is narrowing, especially for experienced talent, says He. Senior base salaries are usually comparable, while bonuses at mainland firms can be a lot more generous, with some offering between six months to 1.5 years of bonus. But one of the main drawbacks is the high taxation that these bankers would be subject to if their jobs were based in the mainland.
Look out: there’s a glass ceiling
Although Chinese firms may be increasingly open to having expats in their workforce, foreigners are unlikely to become a CEO or sit on the board of directors. “Expats can hold mid-to-senior roles at Chinese firms, but becoming a top decision maker will take time. It remains to be seen if China can be like Japan, where foreigners helm companies like Sony, Nissan and Olympus,” says Tan.
On a related note, senior moves into mainland firms from top investment banks like Goldman Sachs and Morgan Stanley aren’t as common – yet.