Banking & Financial Services - 2015 Market Update

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Front office

Hiring activities within the front office space across both buy and sell-side started off slowly in 2015, but quickly accelerated in March after bonuses had been paid out. With the relatively healthy level of M&A activity in the region, we saw the greatest demand at the Analyst to VP levels. These junior to mid-level professionals also received higher base salaries than previous years as banks tried to address the higher staff attrition rate at these levels over the past few years.

Launched in late 2014, Shanghai-Hong Kong Stock Connect started to show an impact on the recruitment market since early May. We saw a consistent stream of hiring across equity research teams in investment banks and an increasing demand for A-shares equity analysts from fund managers. As the talent pool in Hong Kong was relatively limited, firms had to source candidates from mainland China.

On the buy-side, firms sought investor relations and institutional sales professionals to grow their asset under management (AUM). Asset management firms in particular targeted the increasing flow of funds from Chinese institutional investors. For positions that were mainland China-focused, hiring managers required candidates with native Mandarin language skills.

Looking ahead to the second half of the year, despite the recent Shanghai and Shenzhen stock market correction, we foresee a continued demand for A-shares equity analysts, with asset managers and brokerage firms driving such recruitment needs. Institutional sales professionals will also remain sought after as buy-side firms are always keen to hire professionals who have the ability to grow their AUM.

After a decent amount of hiring in the first half of 2015, the demand for Analyst to VP levels investment banking professionals may slow down, although we will still see some replacement and strategic hires. Recruitment activity in leveraged finance and debt capital market (DCM) has declined over the past 12 months and will likely remain the same for the rest of the year, as deal pipelines do not look promising.

Generally speaking, candidates moving within front office can expect a base salary increment of 15%. Those moving from the sell-side to the buy-side are often willing to take a salary cut of 10-20% in exchange for the opportunity to develop their career in a hedge fund or private equity firm.

Middle & back office

The increase in regulations for financial institutions globally continued to drive hiring needs in the middle and back office space in the first half of 2015. Analyst to Associate level KYC candidates were in high demand as banks have been fined heavily by regulators for shortcomings in this area of governance and due diligence.

Compliance departments have expanded over the past seven years in response to tightening regulatory requirements. To ensure the compliance function is monitored properly, many banks focused on growing their audit teams. This created a high demand for VP and SVP level compliance and audit professionals with over 10 years' experience. The same trend was seen in the contracting space in which banks actively sought contractors in the areas of client on-boarding and compliance.

We also saw increased recruitment activity in the areas of credit risk and credit analysis as banks expanded traditional wholesale and lower risk business lines such as corporate and commercial lending. The demand centered on roles from Associate to AVP levels, with hiring managers giving preference to candidates with CFA or CPA qualification.

We expect hiring trends and demand to remain similar for the rest of the year. Due to the strong competition for talent, banks will need to offer highly competitive remuneration packages to attract the best candidates. Job movers in the areas of KYC, compliance and audit will receive a salary increase of 20-25%, while those in credit risk and credit analysis can expect a 15-20% increment. Contractors can command increments of 20-40% when switching jobs, with some potentially achieving as much as 50%.

For the full report and latest salary information, please click to download the Robert Walters 2015 Hong Kong Market Update - Banking & Financial Services - Front Office and Middle & Back Office.

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