Ever wondered what the expatriate who’s been parachuted in from New York or London to manage your team in Asia is really costing your bank? New figures suggest that it’s rather a lot. Overall (i.e. including benefits) annual compensation for a mid-level expat in Hong Kong was US$276k (HK$2,169k) on average, according to a new survey by information provider ECA International.
While these numbers aren’t specific to banking, finance professionals have long been overrepresented among expat transferees to both cities and their pay would have influenced the new data. Meanwhile, ECA chose the markets it covers based on cities appearing in the top-40 of the Global Financial Centres Index. It’s safe to assume, therefore, that the survey’s results are broadly relevant to the banking sector.
The results suggest, for example, that foreign bankers in Singapore are paid less in salaries and benefits than their counterparts in Hong Kong are. Across all sectors, mid-ranking Singapore-based expats cost their employers US$236k (S$325k) a year – 17% less than those in Hong Kong. In banking, the comp gap is largely due to Hong Kong’s larger population of high-earning investment bankers.
Perhaps surprisingly, ECA’s data shows that some expats in Singapore and Hong Kong are still receiving huge benefits packages. Much of the US$276k overall average comp in Hong Kong is made up of ongoing benefits, such as accommodation, education and car allowances, for example.
In banking, these kind of allowances (so-called ‘expat packages’) are now typically only available from director level. In a banking context, therefore, what the survey terms ‘mid-level’ really means a newly promoted director – typically someone in their early to mid-30s. Associates and vice presidents haven’t been regularly receiving expat packages in Singapore and Hong Kong since the 2008 financial crisis, say headhunters. Since then banks have prioritised the hiring of local staff at those more junior levels.
Worryingly for banks who need to hire from overseas to fill local skills gaps, the survey shows that expats are becoming even more expensive to employ in Hong Kong and Singapore. The overall expat pay package in Hong Kong rose by almost US$8k year on year in 2018.
Image credit: EXTREME-PHOTOGRAPHER, Getty
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