In August 2007, Asia’s banking and financial services recruitment sector felt the first few ripples of what were to become major shock waves hitting the industry. The banking sector, notably, started to slow through the remainder of 2007 with a decrease in hiring. Institutions making substantial US sub-prime writedowns were most obviously in the spotlight. Ironically, it is those companies which were under the spotlight in 2007 that seem relatively “safe” in the context of the October 2008 crisis. This year saw steady, if unspectacular, activity through the first two quarters. It was the demise of Lehman Brothers in September that triggered a sequence of events that would wreak havoc over the ensuing months and act as a catalyst for what will be an extremely uncomfortable ride for the recruitment industry in 2009.
Lehman and Merrill cause chaos
Relative to many financial institutions, Lehman Brothers was reasonably small (in headcount terms) in Singapore and Hong Kong, but of much larger scale in Tokyo. The collapse of one of Wall Street’s highest-profile investment banks put a massive dent in business confidence – the very thing that drives future hiring activity – and unsurprisingly we saw a sudden flood of candidates populating the market.
Lehman previously enjoyed a strong employment brand and had attracted outstanding individuals. Some organisations capitalised on this by hiring quality talent at a fair market rate. The announcement by Nomura that it would buy Lehman’s Asian and European businesses was a relief to many staff, who were saved from a potentially long and painful job search.
Almost immediately following the announcement of Lehman Brothers’ bankruptcy, Merrill Lynch said it had found a suitor in Bank of America. This tie-up arguably has greater implications for the United States where Bank of America is a far larger institution and the likelihood of duplication of jobs, functions and business areas is greater. In Asia, Bank of America is not as significant a player as Merrill Lynch, which has substantial operations and heritage in Hong Kong and Tokyo, and an ever-growing presence in Singapore, with the scaling up of its global hub.
Although it would be naive to suggest that there will be no change to either company’s structure as a result of this merger, our instinct tells us it will be far more limited than if Bank of America were a larger player. There will undoubtedly be some fallout when the banks merge, even in Asia, but it is hard to estimate how severe this restructure will be for the employees of either Merrill Lynch or Bank of America. Only time will tell.
Lehman Brothers and Merrill Lynch are just two examples from a catalogue of troubled banks that have sought recapitalisation from other institutions or government bailouts. This has contributed to the sheer panic through September and October, which has had an even bigger dampening effect on financial services sector recruitment. Most commentators are not predicting if, but when, most developed market economies will go into recession. The question facing the most talented of economists is just how long and how deep this slump could be.
An appetite for Asia
However, candidates undoubtedly view Asia as an attractive option in these turbulent times. We have seen an increasing inflow of candidate resumes from overseas over the last six to nine months and over the last two months in particular. Candidates in London and New York, for example, are under significant pressure in their roles and job security is at its lowest. Asia is still seen as a relatively safe haven for these candidates, as the impact of this global crisis has been much lower in our markets and candidates have recognised this fact.
Over the past six weeks, local and international resume volumes have increased by more than 30%. Evidently, they won’t all get roles in Asia and some individuals are far more attractive to this market than others. But the flood of CVs has increased the competition for roles and gives a hiring organisation a broader choice and more negotiating power – an enviable position to be in after so many years with so little bargaining ability.
Cuts are coming
One thing is for sure: unemployment will rise in Asia, with the most wide-scale redundancies likely to come from the banking sector. How severe these cuts will be depends on how long organisations feel the slump will last. Quality people have been in extremely short supply over the years and this structural issue shows no sign of resolving itself any time soon.
Financial institutions are human-capital-intensive businesses and will elect, where possible, to ride out the storm by keeping their best talent and shaking out the bottom 10-20%. In a depressed market, these are not the types other companies will be desperate to hire, either.
The decline in fortunes in the banking industry has been incredibly steep. We are now looking for a floor to the market and wondering how long we might be bumping along the bottom.
Andrea Williams is managing director for Hong Kong at Ambition, a recruitment specialist covering Hong Kong, Singapore, Australia and Britain.
Lehman and Merrill cause chaos
Relative to many financial institutions, Lehman Brothers was reasonably small (in headcount terms) in Singapore and Hong Kong, but of much larger scale in Tokyo. The collapse of one of Wall Street’s highest-profile investment banks put a massive dent in business confidence – the very thing that drives future hiring activity – and unsurprisingly we saw a sudden flood of candidates populating the market.
Lehman previously enjoyed a strong employment brand and had attracted outstanding individuals. Some organisations capitalised on this by hiring quality talent at a fair market rate. The announcement by Nomura that it would buy Lehman’s Asian and European businesses was a relief to many staff, who were saved from a potentially long and painful job search.
Almost immediately following the announcement of Lehman Brothers’ bankruptcy, Merrill Lynch said it had found a suitor in Bank of America. This tie-up arguably has greater implications for the United States where Bank of America is a far larger institution and the likelihood of duplication of jobs, functions and business areas is greater. In Asia, Bank of America is not as significant a player as Merrill Lynch, which has substantial operations and heritage in Hong Kong and Tokyo, and an ever-growing presence in Singapore, with the scaling up of its global hub.
Although it would be naive to suggest that there will be no change to either company’s structure as a result of this merger, our instinct tells us it will be far more limited than if Bank of America were a larger player. There will undoubtedly be some fallout when the banks merge, even in Asia, but it is hard to estimate how severe this restructure will be for the employees of either Merrill Lynch or Bank of America. Only time will tell.
Lehman Brothers and Merrill Lynch are just two examples from a catalogue of troubled banks that have sought recapitalisation from other institutions or government bailouts. This has contributed to the sheer panic through September and October, which has had an even bigger dampening effect on financial services sector recruitment. Most commentators are not predicting if, but when, most developed market economies will go into recession. The question facing the most talented of economists is just how long and how deep this slump could be.
An appetite for Asia
However, candidates undoubtedly view Asia as an attractive option in these turbulent times. We have seen an increasing inflow of candidate resumes from overseas over the last six to nine months and over the last two months in particular. Candidates in London and New York, for example, are under significant pressure in their roles and job security is at its lowest. Asia is still seen as a relatively safe haven for these candidates, as the impact of this global crisis has been much lower in our markets and candidates have recognised this fact.
Over the past six weeks, local and international resume volumes have increased by more than 30%. Evidently, they won’t all get roles in Asia and some individuals are far more attractive to this market than others. But the flood of CVs has increased the competition for roles and gives a hiring organisation a broader choice and more negotiating power – an enviable position to be in after so many years with so little bargaining ability.
Cuts are coming
One thing is for sure: unemployment will rise in Asia, with the most wide-scale redundancies likely to come from the banking sector. How severe these cuts will be depends on how long organisations feel the slump will last. Quality people have been in extremely short supply over the years and this structural issue shows no sign of resolving itself any time soon.
Financial institutions are human-capital-intensive businesses and will elect, where possible, to ride out the storm by keeping their best talent and shaking out the bottom 10-20%. In a depressed market, these are not the types other companies will be desperate to hire, either.
The decline in fortunes in the banking industry has been incredibly steep. We are now looking for a floor to the market and wondering how long we might be bumping along the bottom.
Andrea Williams is managing director for Hong Kong at Ambition, a recruitment specialist covering Hong Kong, Singapore, Australia and Britain.
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