Bankers in Hong Kong are in hot demand as banks struggle to retain talent and fill vacancies. Source: CHUNYIP WONG/E+ via Getty Images |
Talent shortage is likely to be the top challenge for banks operating in Hong Kong in 2022, and companies are offering to significantly bump up the salaries of new joiners to make sure their growing businesses are well staffed, according to recruiters.
"The norm we'd advise candidates [on] when moving is to look at a 15% increment, 20% if incredibly sought after or close to single-digit increments for lateral moves," Abimanu Jeyakumar, head of recruitment firm Selby Jennings, North Asia, said in an interview. "However, the average increment we are seeing this year is 30% up, [and] for some hard-to-fill mandates we have seen increments go north of 50%."
Hong Kong banks are facing a talent crunch at a time when the city's wealth management industry is expected to grow 6% to 10% annually through 2026, from a 2021 estimate of US$1.45 trillion, according to a survey by the local Private Wealth Management Association.
New careers
Bankers have also quit to pursue careers at technology companies as well as crypto or blockchain platforms. For those who stay, employers are offering flexible work arrangements, working one to two months outside Hong Kong, such as in the U.K., the U.S. or Asian locations in Thailand or Indonesia's Bali, recruiters said.
Although Hong Kong has eased some measures, bringing down the mandatory quarantine period to enter the city to seven days from April 1 versus 21 days until earlier this year, and lifting a ban on flights from nine countries including the U.S., the U.K. and Australia, it is too early to tell if it will stop people from leaving.
"I have a very good feeling that some of our financial institutions are losing patience about this sort of isolated status of Hong Kong," Carrie Lam, Hong Kong's chief executive, who announced at a press conference on March 17 that she would not seek another term as the city's leader.
Many international businesses have chosen Hong Kong because of its accessibility to the mainland market and also to the Asia-Pacific region, Lam said. For any longer-term public health strategy, Lam added, Hong Kong will have to take into account both factors: maintaining its accessibility to the mainland and ensuring continued connectivity with the outside world.
Freedom to travel
Once in Hong Kong, people are not able to freely travel to visit friends and family in their home countries or to meet with international clients and key contacts abroad, said Andrea Randall, Hong Kong-based partner at law firm RPC. "Shortening the length of quarantine will greatly assist, and will bring Hong Kong closer in line with the restrictions in Europe and the U.S.," Randall said.
A survey by the European Chamber of Commerce in Hong Kong released March 24 found that 49% of companies are considering relocating their offices fully or partially in the next 12 months due to the restrictions, further reducing the pool of talent in Hong Kong. Yet, Hong Kong remains the leading financial sector of the Asia-Pacific region, according to the 31st Global Financial Centres Index released March 24 by think tank Z/Yen. Its rank dropped slightly to the third spot globally from the second spot last year.
The relaxed rules show that Hong Kong is reacting to pressure from people and businesses to open up the city, Selby Jenning's Jeyakumar said.
"On a more macro scale, we have observed a general decrease in talents within Hong Kong, where there is a percentage of candidates moving out ... This has likely been brought on due to the extended period of travel restrictions over the past two years," said Olga Yung, managing director at recruitment firm Michael Page in Hong Kong.
Desperate times, desperate measures
Most hires seek an increment ranging from 15% to 35% and expect a bonus when taking a new role. Demand across front- to back-office positions is high, although there is naturally a high demand for roles in sales, Yung said. Candidates are also considering newer factors such as how supportive companies can be with flexible working arrangements, she added.
Apart from substantial pay rises, banks are also commonly using a "golden handcuff" tactic, which is a hefty one-off payment to the employee to stay on for a specified period and an agreement restricting their joining a competitor for a certain period after they depart the firm, RPC's Randall said.
"We have advised on a number of these agreements, particularly in the hedge fund world where skilled portfolio managers and researchers are in short supply in Hong Kong, despite plenty of capital in the market," Randall said.
Several banks have also offered returning employees financial support to quarantine. In November 2021, several American banks in Hong Kong, such as Morgan Stanley, JPMorgan Chase & Co. and The Goldman Sachs Group Inc., announced quarantine incentives of up to $5,100 to subsidize hotel fees of returning employees.