Japan’s professionals are having a truly glum year in terms of pay. A recent Robert Walters global poll says the country’s white collar workers are the most likely in Asia to get donuts for salary raises. Even if they do get an increase, it will be minimal (a paltry 5 per cent or less).
According to the poll, which involved more than 3,000 respondents’ in16 countries, 27.42 per cent of respondents in Japan got no pay increase. By comparison, Singapore (17.55 per cent), Hong Kong (24.5 per cent), China (12.66 per cent) and Malaysia (10.78 per cent), all fared better. The survey was conducted after the March 11 disaster.
The banking and finance sector has been hit by miserable salary increments, say recruiters. There has been a definite downward pressure on salaries because the job market is not expanding.
Why is this the case?
Bruce Baker, managing director and head of Japan, Sheffield Haworth, explains: “It is important to understand that the Tokyo financial market is at an altogether different place in its evolution to any other market in Asia. Hong Kong and Singapore are still expanding. The market in Japan, on the other hand, is very depressed and Tokyo is resizing and adjusting to its new role in Asia.”
For instance, senior management at Western banks in Tokyo often now report into Hong Kong or Singapore, rather than head office in the US or Europe. The city has become a satellite.
Other factors explaining the poor pay rises this year include the disaster and the lower than expected Q1 earnings in Japanese banks, says John McCrohon, director, financial services, Robert Walters Japan. “Post disaster we saw a market slowdown across all areas of financial recruitment coverage and accordingly we have seen minimal, if any, salary increases occurring across all areas.”
Even if firms are fattening up in certain departments, most are not offering exorbitant pay rises because of the easy availability of candidates.
So will I get an increase?
That’s most likely a no. Donut pay increases are very similar to donut bonuses. If you are a lower to average-performing banker, expect to receive nothing (or next to nothing). However, if you are senior and contribute directly to the company’s bottom line, there is room for negotiation, say recruiters. Senior expat bankers are among those who often fall under this category. Firms wishing to hire top bankers may offer significant increases, but this is rare, says Baker.
While the logical step for unhappy bankers is to hop over to a competitor, they aren’t doing so in droves. While there is some movement, McCrohon says: “The current economic conditions have had an obvious impact on reducing the number of moves.”
Move for lower? Sure
Curiously though, some bankers will switch to another firm even if salaries are lower. Candidates perceive certain banks to be “safer”, says Baker.
“Rather than compensation, the greatest concern is to have a job. People are attracted to firms which demonstrate a clear commitment to staying in Japan and whose business prospects look good. There is also a much greater interest amongst Japanese bankers in moving overseas, especially within Asia than I have ever previously experienced.”