Bank hopping, salaries and bonuses

In a recent survey published by eFinancialCareers, 77% of participants say that the power of negotiation lies with employers and not candidates as expectations on salaries and bonuses boom.

Bank hopping has been a lively theme this year and has picked up steam in the past month when not a day has gone by without headlines of a recent hire or bank restructuring.

“There certainly was ‘musical chairs’ at the start of the year,” said Fraser Douglas, a fixed-income specialist at Hutton Consulting in Hong Kong. But as market conditions and investor appetite deteriorated, hiring began to tail off, only to pick up again during the recent return to positive fundamentals.

“There has been some movement again in the last month with a few firms replacing key people they lost to competitors,” Fraser said, adding that he expects another round of hires to kick off in 2011, as staffing levels will still be some way off their pre-credit crisis levels.

However, the hiring trend has changed from a game of "musical chairs" to "pass the parcel" as bank hoppers try to catch the right package at the right time. And rightfully so, as a recent survey published by eFinancialCareers found that with the recent pick-up in bank hopping, the power of negotiation still lays with employers rather than candidates. According to the survey, 77% of finance professionals believed that it is the employers, not the candidates, who hold the power at the negotiation tables.

The results were published on September 2 and the survey was conducted during July and August, polling finance professionals, recruiters and employers across key financial centres in the Asia-Pacific region, including Hong Kong, China, Singapore and Australia.

The survey also found that 61% of employers and recruiters that participated in the poll were looking to recruit accounting and finance staff. In relation to the latter, eFinancialCareers had noticed (outside of the survey) a strong drive for banks to beef up the numbers of M&A professionals, particularly in Hong Kong.

In Hong Kong, banks have been expanding staff numbers on their equities and investment banking desks. Many are short on people with M&A skills required to support the growing volume of activity.

George McFerran, head of Asia-Pacific at eFinancialCareers, notes that the large global banks are after professionals with knowledge and skills in the natural resources and financial institutions sectors to support growing capital markets activity in these areas.

“We are starting to see a pick-up in these particular areas and the big banks are looking for talent at all levels” said McFerran.

Other areas that are still very much in demand include compliance, financial technology, product control and risk. In particular, corporate relationship manager positions have been the highest in demand.

Responding to the growing salary and bonus expectations among finance professionals in the region, a significant portion (46%) of hiring managers and recruiters surveyed indicated that budget constraints were the main reason why they were unable to meet candidates’ salary expectations and 45% of employers claimed that candidates’ expectations could be unrealistic.

The survey also revealed that an astounding 86% of hiring managers surveyed had caught candidates exaggerating their current salary during interview negotiations, while only 21% of finance professionals surveyed indicated that they have exaggerated their pay package during salary negotiations for a new job.

“Despite the perception that employers have a more powerful position at the bargaining table, financial professionals should not be deterred to negotiate salary out of fear that the job offer will be withdrawn,” said McFerran. “Companies expect candidates to negotiate and anyone who receives a job offer is clearly a good fit for the role.”

With this in mind, the survey also illustrated that a majority of finance professionals (81%) and employers (79%) agree that finance professionals should defer discussing compensation until they have been offered a job in order to enhance their bargaining position.

“While it is in the candidate’s interest to leverage counter offers and multiple offers to command higher wages, companies want to keep costs under control and avoid salary inflation,” McFerran said.

This view was reflected in the survey that showed a significant discrepancy between employees’ and employers’ perceptions of how best to negotiate compensation.

A total of 69% of finance professionals believe that candidates should leverage a counter offer from another company during salary negotiations. Coming as no surprise, 68% of employers and recruiters said they should not.

¬ Haymarket Media Limited. All rights reserved.
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