The last 12 months have taught us that Asia Pacific is not immune to the redundancies that have swept through global financial services. There are also fewer roles available than a year ago: comparing Q2 2012 with Q2 2011, APAC opportunities on my company’s website have fallen 14%.
But it’s important to remember that not all the jobs have dried up. Now more than ever, most openings are generated by the need to replace, not by the need to grow. While candidates are understandably cautious, there is still enough movement in the market to generate what recruiters call “churn”.
My company has analysed which parts of financial services have enjoyed the largest increases in vacancies on our APAC websites so far this year (Q1 vs Q2), allowing us to pinpoint where churn (and even some moderate expansion) is taking place. Asset management, information services and operations were the top-performing sectors, with quarter-on-quarter growth of 28, 26 and 15 percent respectively.
Examining the top three in more detail gives us some insights into the current and future direction of the job market, especially in the financial centres of Hong Kong and Singapore.
Asset management firms have been less affected by recent retrenchments than the banks, while also continuing to hire. Hong Kong is benefiting from the expansion of yuan funds, with experienced China-enabled portfolio managers in demand. This provides yet more proof that Hong Kong is becoming a magnet for financial professionals who have mainland networks and knowledge.
Increased demand for talent in asset management conveniently coincides with increased supply from the sell side. Unemployment and stagnant recruitment in investment banking are making bankers keener on a career change into potentially more stable, less hierarchical employers. And buy-side firms are only too happy to opportunistically snap them up.
Banks in Asia are continuing to emphasise risk management and compliance thanks to fluctuating markets, new financial regulations and continued relocation of middle-office functions into Singapore and Hong Kong. The need for faster, more detailed, customised, real-time information is growing accordingly.
All this is driving recruitment at companies that help financial institutions manage risk by providing them with information services – for example, rating agencies, data suppliers and business newswires. Hiring is increasing at the large global information providers, who mainly need sales, client-services and technical-support professionals. Niche firms are also building their foothold in Asia and are expanding sales offices into full-service businesses.
First, here’s the bad news for Singapore, Asia’s traditional operations hub. Falling deal volumes and increasing living costs have helped shift some back-office roles into cheaper markets, including India and the Philippines.
These jobs are unlikely to return. It may seem surprising, therefore, that operations roles performed well last quarter, but I believe this was largely a seasonal blip. Employers typically have more vacancies during the Q2 bonus season because candidates delay moving until receiving their payouts. This movement fuels the need to backfill, and fortunately banks are still approving critical replacements within operations.
There are also pockets of growth. For example, as vanilla roles move offshore, Singapore is becoming more dependent on being a global support centre for complex financial products, such as derivatives. It has been building a talent pool in these fields for several years, making it difficult for less mature Asian markets to compete with the expertise on offer in Singapore.
Recruitment levels in APAC financial services began to contract in the middle of last year and have stagnated in 2012. Competition among candidates for open roles is strong, which is helping to push down pay increments. Yet some functions remain in demand; there is no industry-wide freeze.
Churn and a small amount of expansion are keeping the job market afloat in the sectors above and in others like private banking and compliance. While it’s too early to suggest the start of a recovery, one thing is certain: we are in low-hire environment, not a no-hire one.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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George McFerran is the Managing Director at eFinancialCareers Asia-Pacific.