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Why Hong Kong's financial services sector is undergoing a significant transformation
In 2016, we saw many fast-growing Chinese companies entering Hong Kong looking to expand globally. Nowhere is this more evident than in the financial services industry, especially within the asset management sector. Investment banks have traditionally been stable in terms of recruitment needs but now you've got the influx of money from China, a steady stream of Chinese businesses are launching offices in Hong Kong to regionalise and globalise operations. This is set to fuel the majority of hiring needs into 2017.
Currently, here are three trends redefining Hong Kong's financial services industry:
TREND 1: Hong Kong a launch pad for Chinese firms looking to expand
Asia is not immune from the global economic slowdown but Hong Kong's Financial Services market has just shifted and there are still bright spots within the industry. While bulge bracket and international investment banks face constraints globally, Chinese banks, state-owned enterprises, privately owned securities firms and asset management companies who are less affected by what is happening are taking advantage to land great talent.
These firms are looking to set up funds and headquarters in Hong Kong to expand their footprint. They are actively seeking partners to invest in developing markets like Southeast Asia as well as mature markets in Europe and the US across a range of industries such as hospitality, FMCG, retail, mining, energy and aviation.
TREND 2: Long hours driving investment talent into buy side roles
Chinese investment banks and asset management companies have matured and urgently need corporate finance and M&A talent to drive expansion in overseas markets.
In terms of compensation packages, honestly, there's not much increment when the talent moves because a lot of these candidates are looking to exit investment banks once they reach Senior Associate or VP levels because of long working hours and the hectic and unpredictable travel schedule. Based on my experience, many of my candidates in the Investment Banking Division spend so much time on ad-hoc travel that they spend only two or three days a month in Hong Kong.
So most aim to move to a buy side role after they've gained the technical know-how in IBD and have grown their network of connections. As an investment manager or director, they're now looking instead to close a deal and bring the portfolio into the company.
Other hot jobs in demand range from classic roles in accounting, compliance, operations, and market and credit risk. Chinese asset management companies and securities firms are also hiring officers who possess the necessary licences to trade securities, futures, and provide investment advisories and run the business.
TREND 3: Contracting seen as short-to-medium term recruitment solution
We definitely see an increasing appetite to hire temporary professionals in Hong Kong within organisations such as banks and insurance companies. They are becoming more cautious in adding permanent headcount due to various reasons such as cost-saving. It's not just the salaries but also the cost of providing fringe benefits, medical benefits and life insurance as a total package. So if companies can replace a permanent headcount and instead work with a contracting partner like Michael Page, they can offload the cost to us. Contract durations range from a few months to a rolling contract for over a year.
Contracting also allows an organisation to have more flexibility in solving headcount issues. It provides a short-term solution on the allocation of work so hiring temporary staff would be a cost-efficient solution. We also see a trend of more temporary hires (about 25 per cent) being converted to permanent positions in finance, accounting and risk-related roles.
For more, check out our 2016 Greater China Salary and Employment Outlook here.
Watch this short video and find out how Senior Managing Director of Michael Page and Page Personnel in Greater China, Andy Bentote think about the key differences between China and HK markets.
The three trends redefining Hong Kong's financial services sector include:
- Hong Kong being a launch pad for Chinese firms looking to expand
- Investment talent moving into buy-side roles
- The rise of contracting