As global banks cut costs in Hong Kong and Singapore, directors and managing directors are increasingly finding themselves displaced by cheaper and more junior team members. But while ex-MDs are busy starting their own businesses or finding new jobs on the buy-side, their young replacements are facing up to the stresses of extra responsibilities.
“The problem now in investment banking in Asia is that when a director or MD leaves it’s become very common for someone less senior in their team to take on their role even if they don’t really have enough technical and management expertise,” says ex-HSBC ECM banker Cynthia Siantar, now head of strategy at Oriente, an emerging markets fintech firm in Hong Kong.
“Even if you don’t actually move up a job rank, you suddenly have all the responsibilities of a more experienced banker,” adds Siantar. “Your workload could be double what is was, so there’s big potential for junior investment bankers in Asia to burn out prematurely.”
The leaner IBD teams in Asia become, the more pressure is heaped on 20-something staff. “At HSBC, for example, the Southeast Asia ECM team was only me and a director. As an analyst I wasn’t just doing the typical paperwork and pitch books, I was doing associate-level work too – all the internal and external coordination on deals,” says Siantar.
Investment banking deal teams in Asia are already lean by Western standards. As we noted earlier this week, Goldman Sachs' Hong Kong office typically deploys only four bankers on large-scale China deals. "As a result of small deal-team sizes and being the only analyst, I get to frequently meet clients and travel to mainland China, where most of them are based," says a Hong Kong-based third-year Goldman analyst. "If you want an analyst job that just involves crunching numbers at your desk, Goldman in Hong Kong isn’t for you."
A heavy workload isn’t the only problem for freshly promoted junior bankers in Asia. “If young people who take on new roles end up failing, it’s often because their people management skills let them down,” says an analyst in Hong Kong who’s recently moved to a more senior job at a major financial institution. “Your interpersonal skills are much more important than your technical ability – you can always learn the new knowledge on the job.”
“A lot of what drives the early success of young bankers was learnt from their studies,” adds James Incles, Singapore country director at recruiters iKas Group. “These newly promoted managers need to realise that what worked to get them promoted quickly up the ladder doesn’t necessarily work once they reach a more senior position. To continue to succeed they must manage internal relationships and gauge the politics within the bank. But these are leadership competencies that rely on the sort of experience that a young banker may not have.”
While many young bankers in Singapore and Hong Kong are – at least initially – relishing the opportunity to become managers, headhunters are now noticing an uptick in people burning out and wanting jobs with reduced workloads.
“We’re coming across more candidates citing ‘lack of work-life-balance’ as a reason for leaving – and some are leaving their banks without a job,” says Ivan Tang, a former Societe Generale banker, now managing partner at recruiters Tangspac Consulting in Singapore. “In more extreme cases, we’ve seen young directors who were promoted from VP grade getting dismissed within a year for not performing. The stakes are higher after a promotion.”
Siantar adds: “More young bankers in Asia these days are thinking ‘I’m not so tied to my five-figure salary; I need my life back’. More of them are slowly starting to believe that banking isn’t the only career option – the growth of the fintech sector in Asia has helped with this.”
Image credit: RichVintage, Getty