An exodus of workers and a surge in new business from China have combined to spark a talent war among banks and insurers in Hong Kong, driving up wages for new recruits by as much as 30% in the Asian financial hub.
(Bloomberg) — An exodus of workers and a surge in new business from China have combined to spark a talent war among banks and insurers in Hong Kong, driving up wages for new recruits by as much as 30% in the Asian financial hub.
While investment banks are cutting staff as China deal flow stalls, it’s a different story for other parts of the sector, including insurance, bank branches, back office and wealth management. Natixis SA estimates there are roughly 4,000 unfilled jobs in the industry.
“The easy and short answer is there’s shortage in pretty much every single area within banking right now,” with the exception of dealmaking, said Olga Yung, managing director at recruitment firm Michael Page Hong Kong. “There was a lot of talent moving out one to two years ago.”
The pandemic and crackdown on civil liberties have prompted thousands of residents to leave Hong Kong in recent years, leading to a drain on the financial sector that’s a linchpin of the city, employing more than 270,000 people.
That’s pushing salaries higher for finance and technology professionals in Hong Kong, who typically command higher pay than in the rival hub of Singapore, according to Bloomberg Intelligence.
The border reopening with China has given the industry a huge boost, with mainland customers flocking back to open bank accounts, invest money and take out insurance policies. Lenders including HSBC Holdings Plc and Bank of East Asia Ltd. have extended operating hours, with some branches open seven days a week.
“We have a shortage of labor in all disciplines, from mid office to back office to front line,” said Stephen Chan, acting chairperson of the Hong Kong Association of Banks, at an event in June.
Hong Kong insurance sales to mainland Chinese visitors jumped nearly 28 times in the first quarter, as the resumption of quarantine-free travel released pent-up demand for policies, according to the city’s Insurance Authority.
The industry faces a shortage of actuaries, finance and information technology staff that’s estimated to be in the “thousands,” according to Orchis Li, chairperson for The Hong Kong Federation of Insurers.
The economic rebound following the pandemic has led to a surge of hiring across all sectors in Hong Kong, pushing down the jobless rate close to a four-year year low of 2.9%. Economic growth is expected to reach 4.6% this year, according to a Bloomberg survey of economists.
While the government started a new visa program to bring in about 27,000 foreign workers, those who sign up may not move to Hong Kong right away, Li said. It’s also become harder to attract people from overseas to work due to the pandemic, she said.
Even fresh university graduates are getting several offers. Landing a well-paid position at a foreign company is still competitive, but it’s relatively easy to get a job with Chinese-backed banks and accounting firms, said one graduate of the Hong Kong University of Science and Technology. He declined to disclose his name.
The graduate received six offers, including three from global accounting firms, two from China banks and one from an international recruitment company. He accepted the management trainee offer from a Chinese bank, which offered better compensation and work-life balance.
About 35% of Hong Kong financial firms surveyed by KPMG expect staff numbers to increase this year. As Wall Street firms cut back, Chinese companies are hiring.
“We see high demand for operational staff among mainland banks in Hong Kong,” said Michelle Hui, director, executive search and recruitment at KPMG China. “These banks are continuing to expand their presence in Hong Kong.”
Money management firms are also looking to grow. The industry faces a shortage of relationship and product managers, along with risk and compliance staff, said Amy Lo, chair of the Private Wealth Management Association, at the event in June. Lo is also co-head of UBS Group AG’s wealth management business for Asia-Pacific.
One senior manager at a global investment firm said that when a position opens up, they may only get two or three resumes as more workers migrate to countries such as the UK, Canada and Singapore. He declined to be named as he’s not authorized to speak publicly.
Pay Hikes
Reflecting the demand, the financial services sector saw a 4.8% average salary increase in 2023, one of the highest jumps across all industries, according to a survey by Willis Towers Watson in February and March.
Workers changing jobs often see bigger pay hikes. Candidates can command a 20% to 30% raise, according to Yung at Michael Page, up from about 10% to 15% in the past.
Job vacancies jumped by more than 10% in the first half compared with the previous year, and it’s taking longer to fill those roles, according to recruitment firm Adecco Group AG.
“With more and more talent leaving Hong Kong, the city is struggling” to attract people, so pay is rising, said Benjamin Lee, a spokesman for Adecco.
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