“It hasn’t caused an issue”: UOB staff take pay freeze on the chin

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“It hasn’t caused an issue”: UOB staff take pay freeze on the chin

Singaporean banks have a long-standing reputation for not making large scale redundancies – and they’ve kept it intact this year.

Back in April, DBS, OCBC and UOB all pledged not to cut jobs during the pandemic. Although global banks made similar early commitments, some of them – notably HSBC and Deutsche Bank – resumed their restructuring plans by the summer. “We’ve had plenty of people ask us whether we’re still committed to not making layoffs – we are,” says a senior source at one of the three local banks.

But while current roles are being retained, the firms have been forced to tighten their belts in other ways after suffering large falls in first-half profits. UOB is a case in point. Following an internal memo seen by Bloomberg, the bank has confirmed that it has frozen salaries. It will revise its stance as the “external environment improves”, Dean Tong, head of group human resources, said in a statement sent to eFinancialCareers.

A UOB insider told us that the bank’s pay decision was “expected and reasonable in the circumstances”. “It hasn’t caused an issue here, at least not it my team,” he says.

Meanwhile, DBS will review its staff costs in the next few months having already cut variable compensation (e.g. bonuses), while OCBC will examine its pay and rewards at a later date, reports the Straits Times.

UOB has also become more cautious about its recruitment. “With the economic outlook for the next year being one of the worst in decades, we must take a disciplined and selective approach to any new headcount increases,” says Tong. “However, we will need to continue investing in and hiring for roles essential for our strategic priorities and, as such, new appointments will be approved at the most senior levels of the bank. While we have adjusted our hiring plans, we do not plan to conduct retrenchment exercises at this point in time as a result of Covid-19,” he adds.

The bank’s hiring policy doesn’t appear to amount to a freeze along the lines of those imposed by Standard Chartered and HSBC at the end of the first quarter. In mid-April, Standard Chartered’s Singapore vacancies stood at just 63 and HSBC’s had almost ground to a halt. By contrast, UOB currently has 166 local jobs on its careers site.

About 37% of these roles are in technology. During the first half, the bank “remained committed to investing in technology to strengthen product capabilities, enhance customer experience and improve productivity”, according to its financial report. UOB’s tech teams have been kept busy as businesses and consumers use its digital systems in increasing numbers. Wee Ee Cheong, UOB’s chief executive officer, said last month that there was an 8.9-fold year-on-year increase in corporate transactions on the firm’s PayNow platform in Singapore in H1, for example.

Like other banks in Singapore, UOB continues to make senior appointments in tech. As we were the first to report in June, it hired Jon Bowden, one of HSBC’s most experienced technologists, as head of core banking.

Image: unsplash

Have a confidential story, tip, or comment you’d like to share? Email: smortlock@efinancialcareers.com or Telegram: @simonmortlock. You can also follow me on LinkedIn.

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