With the dark clouds of a recession looming on the horizon, conservation measures will be the default procedure by Asian companies for the next 12 months.
In particular, the financial sector will see tighter controls in its labour force and amid the uncertain US economy and Eurozone turbulence, banks are focused on cost cutting. In addition, unprecedented global regulatory changes have affected capital requirements, tax outcomes and the customer experience in 2011.
As regulations have increased, operational costs have risen and profitability has decreased, making financial institutions keener than ever to cut costs.
Here is what we will likely see in Hong Kong and Singapore markets this year.
Hiring Down, Redeployment Up
Recruitment fell in the second half of 2011 and these comparatively low rates are expected to continue this year. The general consensus among Asian Banks is to adopt caution in expanding headcount while job seekers are more than likely to remain in current employ due to the uncertainty in the Western economies.
Applicants will seek assurances on job stability and many will maintain high expectations about salary increments. Meanwhile, employers are likely to offer less, creating a growing mismatch in monetary expectations.
Internal redeployment, rather than recruitment will also be favored. The belief is that staff seasoned in an environment will find it much easier to handle a different job, given that they already know their colleagues and the way the organisation functions. Also, in the recent past we have seen banks encouraging a lot of overseas postings across countries. That trend looks like it’s here to stay.
The Buy Side Benefits
An increasing number of candidates will likely move to fund houses rather than staying in or joining banks this year. The allure of fund houses is the perception of more stable jobs and an improved work-life balance.
In fact, better working hours is one of the most common reasons cited by candidates when asked why they would like to switch to fund houses. Some are even prepared to take a minor salary cut if they can get into the industry.
In addition, the recent and upcoming redundancies may see a trend of ex-bankers starting their own fund houses this year. Investment capital will also make its way from banking to the buy side, triggering hiring by funds.
Risk Is Strong
Professionals in risk and related functions, such as audit and compliance, will continue to be sought after in 2012, especially with the rolling out of Basel III. Firms are likely to look for middle-management professionals who possess relatively deep market knowledge and are able to hit the ground almost immediately, thereby offering the most value add.
In addition, there is also an opportunity for candidates with an existing role in operations and credit to move into this space, especially if they are knowledgeable about risk (operational, credit and reputational) and possess the ability to be intuitively tuned into the various aspects of controls when auditing a process.
Another strong push for 2012 is the use of contingent workforce, such as contractors and interim managers, to diagnose and implement new strategies. In particular, opportunities are expected for banking and finance, information technology, and accounting, where up-to-date skill sets and industry knowledge are essential to cope with a dynamic market. Contractors or interim managers are characterized by the following attributes:
· Speed: They can normally be hired within days. Accustomed to hitting the ground running, they are able to work effectively immediately.
· Return on investment: Deliverables and timescales are normally agreed at the start, so there is a slim chance of failure. And because they are paid on the basis of delivering, they have strong motivations.
· Commitment: Their future work relies upon referrals and a successful track record, so they are committed to completing each assignment and constantly maintaining their skill sets at the highest level.
Following the contingent trend, off-shoring is likely to be included in resourcing strategies. Although process-orientated functions like IT and operations have traditionally been off-shored, banks will also target analytical jobs this year, such as product control. This will therefore drive hiring within the project management and change space as banks look to strip out these functions and complete the off-shoring process.
George McFerran, Head of Asia Pacific , eFinancialCareers
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.
Do you know more about this story? Contact us anonymously through this link.
George McFerran is the Managing Director at eFinancialCareers Asia-Pacific.