Banks in Hong Kong are not typically offering pay rises of more than 20% to lure new recruits. In contrast to two years ago, salary increases for candidates moving between banks are now largely in the 15% to 20% range, even in the most sought-after sectors.
We asked six recruitment agencies to tell us percentage pay increments (at VP level) for the most in-demand Hong Kong banking job functions. We then averaged out their figures to produce the chart below.
M&A tops our table and is the only job where average salary hikes for mid-level candidates squeak past the 20% mark. Headhunters say this is because there is an ongoing talent shortage of Mandarin-speaking bankers with experience working on cross-border deals involving mainland companies.
Beijing imposed capital controls last year, causing M&A volumes to fall by a third to US$140bn from 2016’s record levels, according to Reuters. This year, however, new Chinese regulations have been introduced which encourage genuine foreign investment but restrict ‘speculative’ deals in sectors such as overseas property. Despite global trade tensions, outbound acquisitions are expected to increase Chinese M&A lending in the second half of 2018, following a disappointing first half.
Large pay increases in M&A are also being fuelled by hiring at Chinese banks in Hong Kong, which are inching up M&A league tables and boosting their traditionally low base salaries as they compete with Western firms for talent. CICC and China Renaissance both cracked the top-10 banks for Asia (ex-Japan) M&A revenue in the first nine months of 2018, according to Dealogic.
Just behind M&A on our chart sit three predictable sectors. While compliance candidates could count on 25% to 30% just two years ago, 20% is now the norm. Compliance hiring in Hong Kong is falling as fixed-term contracts expire, technology takes over jobs, and banks’ reach their desired headcount levels.
Meanwhile, talent shortages continue to plague private banking and cyber security, so banks are offering 20% when they recruit.
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