The report card for 10 major foreign banks in Japan in the last fiscal year (ending March 31) was quite a mixed bag and correspondingly, hiring plans for these firms have varied this year.
Bloomberg reported last week that Morgan Stanley trounced its rivals, more than doubling its revenue to 80.5bn yen, allowing for a rebound to 22.5bn yen profit. While Goldman Sachs, J.P. Morgan and Barclays also posted profits, others like Bank of America, Deutsche Bank, Citigroup, UBS and BNP Paribas had a combined loss of 170.6 bn yen.
While the results may not take into account much of the fallout from the March 11 earthquake, what does this mean for employment at Japan’s top foreign banks?
According to recruiters we spoke to these results aren’t necessarily indicative of the state of the recruitment market. One Japanese headhunter, who declined to be named, says: “Yes, J.P. Morgan and Morgan Stanley were definitely quite active in the early part of this year. However, others like Goldman Sachs and UBS have also done steady hiring and while Deutsche Bank was quiet earlier this year, this seems to be picking up again.”
Kevin Naylor, team manager, financial services division, Wall Street Associates, Japan, agrees. “In the short run, I doubt that these profit results will result in a major impact on back and middle-office recruitment. The effect of business volume increases or decreases is dampened as they go down through the organisation and going into the latter part of the year, which tends to be quieter anyway, I don’t expect many firms to make any major strategic headcount changes.”
The remainder of 2011
Naylor predicts that significant increases among foreign firms won’t happen until February next year. He attributes this to a variety of reasons: standard decreases in capital markets activity towards the end of 2011, global cuts and restructuring among many large financial institutions and a sluggish Japanese economy.
But there is a silver lining in that outlook. Naylor says: “We are seeing some small signs that Japan is coming back. For the later part of 2011, I expect control functions such as audit, compliance and financial control to be the most active.” He adds that tighter global regulatory requirements and greater scrutiny (after business continuity planning lapses were exposed post quake) will also boost demand.
The road ahead
Naylor points out some employment challenges facing Japan’s foreign firms:
· While it continues to be an employers’ market, many firms tend to set the bar too high and struggle to get final approval fast enough before candidates take other offers or lose interest.
· A “talent vacuum” exists in areas of deep technical product knowledge due to the out flow of expatriate professionals during the GFC and after the Japan disaster.