It’s officially the fourth quarter – a particularly cost-averse period for banks as budgets dry up until bonuses are paid next year. If you’re negotiating pay for a new banking job in Hong Kong or Singapore you need to know what you’re up against in the current climate.
To give you a hand, we’ve asked recruiters to identify some of the key compensation trends they’re seeing in the Asian banking sector.
“Base pay is increasing less now than it has been over recent years and there is nothing more annoying than a candidate still expecting a 20% pay increase these days,” says Kyle Blockley, managing partner of recruitment firm KS Consulting in Singapore. “The market is mature in Singapore and banks have realised it’s cheaper to base their back-offices overseas. We're left with a finance world similar to London, with pockets of hiring and high pay rises in certain areas, but with a constant focus on automation and cost reduction.”
Where are these exceptional ‘pockets’ in which pay rises for job movers are topping 20%? We have a list of them here, which includes predictable roles like compliance officers and corporate bankers. But over the next few months, data scientists in Asia will be joining this elite group. “Banks want people who can go beyond analysing the data and spotting trends – they need to convey it to stakeholders with recommendations to augment the business,” says Farida Charania, Asia Pacific CEO of search firm Nastrac Group.
If you’re intent on moving jobs this quarter you will be forgoing the bonus your current bank is due to give you early next year. Worse, banks now remain reluctant to use guaranteed bonuses to compensate people like you. “But this time of year does at least give candidates some more leverage to negotiate higher base-salary offers, if they are to lose a bonus payment in Q1,” says Aaron Bolton, a manager at recruitment company Black Swan Group in Singapore.
As we reported in July, a slump in graduate hiring in the wake of the 2008 financial crisis has now led to a shortage of candidates for VP-rank investment banking jobs in Asia. The recruiters we spoke with agree that it’s at VP-level where bankers are most demanding in their pay requests right now.
Front-office quantitative analysts with about four years’ experience are in demand, driving salaries as high as US$200k in Singapore and Hong Kong – a level until recently the preserve of VPs, says Nick Wells, a director at search firm Webber Chase in Singapore. “Banks simply didn't hire pricing quants from 2008 to 2011 so there was no organic growth.”
The two banks with the largest redundancies plans in Singapore right now are RBS (cutting hundreds as it shrinks to a sales/trading core in Singapore) and Standard Chartered (trimming managing directors). However, as we’ve alluded to before, both of these banks are among the better paymasters in the Republic – a cap on bonuses has pushed up RBS base salaries, while some Stan Chart MDs enjoy guaranteed bonuses. If you’re leaving either of these firms, your new employer is unlikely to be as generous.
Internal auditors have been achieving healthy pay rises for the last few years at banks in Hong Kong and Singapore – and this has now pushed average base pay in the sector above US$175k for directors and beyond US$210k for MDs, says Stella Tang, managing director of recruiters Robert Half in Singapore. “Regulatory changes and economic headwinds are driving the need for more internal audit professionals,” she adds.
Mizuho and Tokyo-Mitsubishi UFJ are both recruiting for their transaction banking units in Singapore in a bid to win business from Japanese companies in the city state. This is leading to surging salaries for bi-lingual English/Japanese speakers, says Blockley from KS Consulting.
Small private banks – from Bordier to Vontobel – are try to hiring more relationship managers to eke out market share in Asia’s expanding wealth management sector. But their tight profit margins and small product platforms generally make them less attractive to candidates than the large private banks in Asia (UBS, Credit Suisse and Citi manage the most assets). Hence they are luring candidates with large bonuses percentages and higher bases salaries – but as we’ve pointed out recently taking an overly generous package from a boutique means some bankers are struggling to break even.
Compliance hiring and the heftier pay rises (25% or more) that come with it are “plateauing”, says Wells from Webber Chase. But talent shortages remain and banks like HSBC and Standard Chartered are still building compliance teams in Singapore and Hong Kong – so candidates moving banks should still expect 15% increases in base salaries this quarter, say recruiters.