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Wary of Unrest in West, Financial Services Hiring Booms in Asia

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Boosted by a soaring Chinese financial services market, jobs available are largely up across the Asia Pacific region. In addition to Mainland China, which leads the pack with a 105% increase in jobs available, quarter-on-quarter, both Hong Kong and Singapore saw marked jobs gains in the financial services sector. Australia remained steady, with a mere 1% increase in jobs. Japan was the only country to experience a decrease in jobs available in the first quarter of 2017, with a 13% decrease.

Global events made their mark on Q1 employment figures in an unexpected manner. Whereas in Q3 and Q4 of 2016, there was a sense that instability in Europe and the United States could have a negative knock on effect on financial services across the Asia Pacific region, it seems the opposite may be true for home-grown institutions and investors.

“China has an opportunity to take advantage of the slowing of confidence in the west and is seizing that opportunity with both hands,” said Richie Holliday, Chief Operations Officer, Morgan McKinley Asia Pacific.

Where large multinational institutions are holding back, waiting to see how Brexit plays out and what mark U.S. President Donald Trump will make on the industry, China is sweeping in to invest and grow its financial services market share.

Sensing the opportunity for growth, institutions in Thailand, Vietnam and Malaysia are flexing their banking muscle in the hopes that they can tap into the wealth that’s increasingly becoming available in Mainland China, particularly among the growing middle class population. “Though they’re still smaller players compared to the Chinese, they’re driving a lot of hiring in both permanent and contractor positions,” said Holliday. The shift has been especially noticeable in tertiary financial services sectors, such as insurance, an area among the first to expand when more people move up the income ladder toward and into middle class.

True to form in the countries that celebrate it, the Chinese New Year sparked a brisk period of job seeking. The celebration coincides with the 13th month pay practice, which sees employees receive double their monthly salary in January, making the end of January a catalyst for professionals seeking new opportunities to register interest with recruiters. Shanghai is a stalwart adherent of the practice, making its 43% increase in candidates no surprise. The practice is also common, but not as widespread, in Hong Kong and Singapore, which saw 35% and 34% increases in candidates, respectively.

The overall positive APAC employment trends come despite regional political events that had many onlookers concerned about negative market repercussions. Though the election of frontrunner Carrie Lam as Hong Kong’s new Chief Executive was not without incident, it was a far cry from 2014 when Hong Kong activists launched a series of protests, and the smooth transition is expected to ensure that relations between Mainland China and Hong Kong remain stable.

Nearby South Korea’s political fallout was among the more dramatic regional events, with the impeachment of President Park Geun-hye, who now faces possible prosecution on corruption charges. The political fallout sent shockwaves across the country, and caused a slowing in the South Korean job market, but the reach of the fallout was felt largely on a purely domestic front.

Mainland China

China’s appetite for financial services growth is currently unrivalled, and investors and job seekers alike are taking note.

“Right now, London and New York are distracted, but China is laser focused,” said Holliday. “People want to bank in environments that are attentive to their needs, not to shifting regulatory and political winds.”

The Chinese economy continues to grow at an enviable rate of 6-7%, but the growth rate has not been even across sectors. Acceleration in mergers and acquisitions and venture capital has been paired with deceleration in the retail and luxury sectors.

“Job seekers with experience in the growth sectors are expected to stay in high demand in China throughout 2017,” said Holliday.

Trade optimism also looms, as Donald Trump and Chinese President Xi Jinping are set to meet in April to discuss existing tariffs. Experts expect Trump’s campaign bluster to give way to a balancing of trade interests that can reshape the Chinese automotive industry. Though lowering Chinese tariffs on foreign cars will create added domestic competition, it is largely expected that Chinese automakers stand to benefit from trade policy reform through a greatly enlarged market base.

Hong Kong

Hong Kong’s impressive 56% spike in jobs comes as a result of both the annual cycle of job releases, as well as China’s growing regional financial services reach.

“Hong Kong’s jobs market is stronger than many others in large part due to being the largest beneficiary of Mainland China’s growth in the financial services sector,” said Holliday. “Businesses in Hong Kong are acutely aware of the opportunities posed by western countries taking more protectionist stances and stands to benefit greatly from a boom in Asia Pacific led banking.”

Chinese asset management and insurance businesses are actively expanding their Hong Kong market share. European and American institutions that have traditionally had a strong market share in both these sub-sectors are reticent in releasing new positions and China has taken note, placing hiring in those two sectors in Hong Kong at the top of its priorities.

The 35% increase in job seekers reflects the cyclical post-bonus bump and is standard for Q1. Unlike in Mainland China, a 13th month salary is optional for employers, and so bonuses which were allotted throughout Q1 can trigger thoughts of movement or even relocation. “Most skilled Financial Services practitioners looking for work in Hong Kong, especially if they have local languages, are looking at a thriving industry,” said Holliday.

Singapore

Singapore’s Q1 uplift in jobs was more muted than in China and Hong Kong. Still, the 26% increase in jobs available points to a healthy hiring market.

“Financial services in Singapore are more cautious, but nevertheless, its underlying financial services infrastructure is buoying the job market,” said Holliday

Whereas Singapore’s 2016 kicked off with more job vacancies than applicants, 2017 kicks off with the reverse scenario.

“Fewer positions are being approved in Singapore than in Hong Kong and China due to government restrictions hiring based on nationality,” continued Holliday.

Singapore’s stock market surprised observers by closing Q1 with a 20-month high. Almost half of the rise can be attributed to financial services. Additional big changes may be ahead for the country’s bourse, as Singapore vies to become the first stock market in Asia to permit dual class listings. If approved by regulators, the change would take effect in 2018 and could revolutionize the tech industry in Asia, transforming Singapore into a regional hub.

Japan

Despite reasonably strong market sentiment in the the first few months of 2017 (Tankan Survey) and Japan posting its largest trade surplus in 7 years in February, the markets are still quite cautious in their outlook. The currency continues to be volatile and there are some potential storm clouds on the horizon.

After a Q4 2016 increase of 4% in jobs available, Tokyo’s job market took a 13% quarter-on-quarter hit in the first months of 2017. Japan enjoys a largely domestically oriented economy but, nevertheless, caution from global upheaval permeates the industry, resulting in cautious revenue planning and fewer new positions. “Despite a stable economy, we’ve seen institutions struggle to get approval for new positions in Tokyo,” said Holliday.

The Japanese yen is currently under greater influence from U.S. than domestic events. As a result, the currency took yet another hit when President Trump’s failure to repeal former President Obama’s signature healthcare legislation signalled roadblocks ahead for sweeping infrastructure spending and tax cuts. Due to the sensitivity of these areas to the markets, Japan is bracing itself for more turmoil ahead.

At 48%, Japan had the highest increase in job seekers, a figure attributable in part to its strong employee protections that make it exceedingly difficult for institutions to fire staff. Flexibility being a mainstay of a healthy financial services industry, Japan has seen a gradual increase in reliance on contractors rather than permanent positions.

Australia

Having largely escaped the ravages of economic busts, Australia has also foregone the benefits of booms, and remains largely removed not only geographically, but also economically from its regional counterparts. “Australia’s 1% growth underscores a persistent flatness endemic to the country’s economy,” said Holliday.

Its relative isolation has meant that Australia’s financial services industry also operates on a more traditional model. This, coupled with recent currency fluctuations, means it fails to be a significant draw for some overseas professionals and relies on a largely domestic pool of professionals. However the country remains a destination considered by many international job seekers who consider the desirable aspects of living in Australia to outweigh what might be lost in the financial package.

Australia’s economy is bolstered by large infusions of spending on infrastructure, and what fluctuations are apparent in its hiring usually coincides with these infusions. “For better and for worse, Australia is on a stubbornly steady course,” concluded Holliday.

Contractors

Contractor hiring is becoming increasingly the norm, as underscored by the year-on-year increase of 10%. “The growth in contractor hiring is changing how recruiters, including Morgan McKinley, do our work. The contractor model offers employers and professionals alike the flexibility to build dynamic businesses and careers,” said Holliday.

The rise of the gig economy lends itself well to the contractor employment model. “Particularly in areas like financial services IT, six months spent working with and learning from top industry employers is a highly attractive prospect for many of our clients,” said Holliday. “Given the ever shifting regulatory climate, it also frees institutions up to hire now, instead of getting locked into a holding pattern.”

Contractor growth has been particularly noticeable in the areas of strategy and consulting; compliance and risk management; and in IT, all areas that benefit from short-term hires and niche expertise. Contractors are uniquely qualified to offer a broad range of proficiencies that permanent hires (often with years spent focusing on just one aspect of the industry) cannot offer.

Conclusion

Asia is looking to make lemonade out of Europe and America’s lemons and, so far, the strategy appears to be working. If European and American institutions continue to be bedraggled by their shifting political and policy landscapes, they stand to lose some of their foothold in Asia, but there are many regional institutions eager to pick up where they are leaving off.

Chinese enthusiasm for investments are keeping the region outperforming many of its western counterparts, but the Asia Pacific region continues to pay close attention to international developments, particularly as Washington sets a new course, and Britain has triggered Article 50 to begin the formal process of leaving the European Union.

“People are, understandably, tired of hearing that no one knows what’s going on, but the truth is that since events are unprecedented really no one can predict what the future will hold.” concluded Holliday.

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