Investment in the development and retention of financial talent is a critical task for financial institutions in Shanghai if they are to meet the city’s long-standing ambitions to become a leading global financial centre, according to recruitment experts Hays.
2018 marks the 40th year of Opening Up and Reform, and government officials and financial regulators are focusing on Shanghai's development towards an international financial centre in the new era. This was the theme of this year’s Lujiazui Forum, an annual dialogue platform organized by the Shanghai Municipal People's Government and key national-level financial bodies.
In the weeks leading up to the opening of the forum, the need to develop and retain financial talent was emphasized in a number of initiatives supported by the Shanghai government. These include the hosting of the First China Financial Talent Summit Forum and an announcement by 19 financial institutions and businesses to build the first base station for the financial talent in Lujiazui, Shanghai’s financial hub.
“Hays has been a strong and active supporter of Shanghai’s ambitions to become a leading financial centre since we opened our first China office in the city 10 years ago. Hays welcomes these recent government-led initiatives that encourage financial institutions to implement even better financial talent and development policies,” says Simon Lance, Managing Director for Hays in Greater China.
According to the 2018 Hays Asia Salary Guide, recruitment in Mainland China’s commercial banking sector was more active in 2017 and is expected to grow further in 2018. While Asian banks involved with the ongoing, massive Belt & Road Initiative infrastructure were and will be active, the announcement by the People’s Central Bank of China that Mainland China will steadily reform and further open its financial sector will fuel even stronger talent demand across a variety of positions.
In corporate banking, candidates for Trade Finance Manager, Global Markets Sales, Security/Service/Custodian and Operations roles are in hot demand. The right candidates for these positions could see an above 40 percent salary increase plus a comprehensive remuneration package such as savings plans, additional pension schemes, flexible working hours and share options.
Since Mainland China opened its renminbi retail business to foreign funded banks in 2006, many foreign institutions have set up their Mainland China headquarters in Shanghai and the city has gradually played an increasingly important strategic positon in the Asia Pacific region. As a result, the gap between gross annual remuneration packages for employees in Shanghai and Hong Kong or Singapore has become smaller, especially for front office roles. However, due to high individual income taxes, there remains a noticeable difference in net annual income between Shanghai and its regional peers.
Hays is also seeing high demand for senior investment bankers with experience in A-share capital markets, following the cancellation of shareholding ratio limits for foreign investors in Mainland China in 2017. Several foreign banks have formed securities joint ventures with Chinese institutions. Meanwhile, asset management and custody services for QFII and RQFII clients are booming, and custodian banks are increasing their headcount for both front and back office roles.
“To position themselves in the best way to take advantage of the business opportunities that will come with the expansion of Shanghai’s role as a global financial centre and China’s ongoing financial reforms, financial institutions should be looking to bolster their HR departments to accelerate the development of their talent base, which may also improve retention especially for in-demand positions,” says Simon Lance, Managing Director for Hays in Greater China.
Hays expects that due to increasing structural changes within organisations, demand will grow for candidates who possess employee relationship and organisational development skills. At the same time, recruitment function roles are still very popular, especially for candidates with headhunting experience in Banking and Financial Services. A Senior Recruiting Manager with over 10 years’ headhunting experience could be offered around RMB 800,000 per year by a top foreign bank.
In this booming market for financial talent, local candidates hold the advantage. Foreign financial institutions are increasingly localizing their hiring as candidates need to have strong familiarity with Mainland China markets in terms of clients and local regulations.
Development of a pipeline of financial talent should not only focus on senior and mid-level positions – future talent at the junior level also needs to be acquired and nurtured to prepare Shanghai-based financial institutions for the demands of playing a greater role in the international financial system over the long term. In particular, banks and financial institutions have the greatest need for junior talent in Relationship Manager and Sales front office roles and KYC and Trade/Cash Operations positions.