Our annual salary benchmark report looks at job functions across Hong Kong to identify what is happening with salary bands and bonuses across a range of functions and job levels.
As was the case with many major financial centres, 2011 was a year to test the Hong Kong financial services recruitment market.
Problems in the Eurozone, stuttering growth in the US and concerns about the rate of future growth in China forced the operations of many global banks to trim jobs. After a period of comparatively buoyant recruitment conditions, this slow down in the local recruitment market also compelled candidates to become more realistic about wage increases. This is also exemplified in bonus payments for the banking sector, down on average 30% from 2010 and the gap between pay awarded to bankers and other sectors within the finance industry continues to narrow.
However, there are signs as we head towards the halfway mark of 2012 that confidence is slowly rebuilding.
The outlook for 2012
Common to other major financial centres, it has been the biggest banks who have shed jobs while their smaller rivals have used the weak jobs market to stock up on quality candidates. Candidates themselves are now much more pragmatic about offers from small and mid-tier firms.
Further, the more active recruiters have been taking banking candidates to markets outside of the investment banking sector - in insurance, asset management, hedge funds, exchanges and software vendors where the current appetite to hire is greater. The management consulting sector has also started 2012 more optimistically and is looking to pick up individuals with financial services experience.
However, the hiring of staff in investment banking itself is only going to pick up significantly in volume if banking results continue to improve. Front office profits will drive back and middle office recruitment.
Where the jobs will be
As a regional hub for equities the Hong Kong market will continue to be active for staff in areas like trade support but most middle office hiring will focus on investment in infrastructure to create greater efficiencies.
Within the finance function there is a similar story with most job opportunities focused on regulatory change management.
Compliance will remain strong - a Director of Compliance at an investment bank should now be looking for between HK $1,700,000 and HK $2,000,000.
Candidates with strong practical experience of Operational Risk and a detailed understanding of the processes and controls within a bank remain very attractive to employers. This is reflected in the levels of bonus still available with Directors and Managing Directors commanding bonuses of between HK $330,000 and HK $600,000.
On the technology side, the market has been weakened by investment banks in Hong Kong increasing investment in mainland Chinese technology operations. Shanghai now has a strong and cost-effective talent pool that competes with Hong Kong. Although somewhat conversely, technologists from Beijing and Shanghai are still looking to Hong Kong for the most lucrative opportunities, where the city’s position as a global financial hub can provide highly valued international exposure.
The good news for many Westerners working in technology in Hong Kong is the banks still value technical skills far more highly than local language skills.
Realistic or pessimistic?
So a bit of realism has crept into the Hong Kong recruitment market but that shouldn’t turn into pessimism. Many of the factors that have driven the Hong Kong banking market forward remain firmly in place. For example, Hong Kong still has one of the highest numbers of millionaires per capita in the world making it a private banking hub and of course China, whilst its growth may moderate, is still going to be a powerful engine pumping corporate finance and other investment banking work direct into the city.
No investment bank with global aspirations can turn its back for too long on Hong Kong.
For a full copy of this year's salary benchmarking report, please click here