As China continues to open its markets to outside investors through schemes such as the recent Shanghai-Hong Kong Stock Connect, the investment banking landscape has radically shifted. Many experienced bankers are shedding their ‘size matters’ mentality and leaving big banks to set up their own advising and consulting companies, with a view to clinching many medium-sized deals.
Players are more opportunistic and prefer to join teams rather than brands, specifically teams built on relationships with relevant business people to ensure maximum deal exposure, which is essential during these turbulent times.
At the same time, investment bankers are open to moving to Beijing and Shanghai, the mainland’s financial hubs, and many of them are using their existing cross-border connections to get established.
There has also been a seismic shift in the preferences of jobseekers — especially those in the middle to senior bracket. These days, professionals in the industry prefer smaller organisations where there’s a chance for them to cultivate their career, instead of getting lost in the unwieldy processes of bureaucratic behemoths.
A decade ago, most candidates were targeting top-tier multinationals with hundreds of employees in each country. Now they’re looking at regional banks with fewer staff that offer a wider range of tasks and challenges to keep them interested.
Key to this change is the growing belief that people should have control over their own lives. Work-life balance is everything to modern professionals, who place greater importance on how their workplace supports their personal well-being and happiness.
These trends have created an acute shortage of candidates for key positions of two types:
Vice-presidents and directors — typically those with 10-12 years experience. There are few individuals capable of gaining traction with clients and, at the same time, able to focus on supervising staff.
Associates with good transaction experience. Due to massive layoffs in 2012, a lot of teams have become top heavy.
Thanks to strong demand and relatively limited supply, a talent war has broken out. Firms on the front line have been firing rounds of inflated salaries and top titles at candidates in the field, only to see them switch sides after a few months, lured away by huge counter offers from competing firms.
The main casualty in all this is industry itself. Tighter rules have led to an increasing demand for roles related to governance and regulation.
Maintaining control and trying to prevent careless mistakes has resulted in a boom in several areas: regulatory operations, reporting, compliance, operational risk, Know Your Customer and Anti-Money Laundering operations, and due diligence.
To cut costs, bulge bracket banks are relocating their back offices to India, Singapore and the Philippines. Most of the remaining roles are internal and involved in client liaison and project management, requiring people with communication and technical skills. As for senior positions, many are already filled at most of the bulge bracket firms or are targets for internal transfers, so hiring activity is mainly at the associate to junior VP level.
That being said, senior level recruitment has been strong in mainland financial institutions due to the increase in business activity, which has led to traditional flat-form organisations being upgraded.
Written by: Levina Poon, Director of Financial Services