Big banks in Asia make surprise confession: “We’re not cutting back on agency recruiters”
As recruitment starts to pick up in Asia, banks are finding that their in-house hiring teams are too lean to meet the rising demand for new staff.
Having spent the best part of six years since the financial crisis espousing the parsimonious virtues of sourcing candidates directly, they now concede that in an expanding job market there will always be roles, especially front-office ones, that only agency recruiters can fill.
But banks are making recruiters work harder for their fees and are reducing the amount of agencies they deal with, according to the senior HR professionals from global and Asian financial institutions who attended recent eFinancialCareers roundtable discussions in Hong Kong and Singapore.
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The roundtable delegates in both cities agreed that their internal recruitment teams are under pressure because they have more open vacancies than this time last year. A representative from a bulge-bracket bank in Hong Kong said her firm was doing twice as much hiring as 12 months ago – for both newly created and replacement roles. All roundtable panelists predicted that their Asian headcounts would grow or stay steady this year – a sign that large-scale redundancies are no longer on the cards in the region.
While delegates at previous roundtables (eFinancialCareers has run more than 30 of them in Asia Pacific since 2008) often aspired to do all their hiring in-house, talk of eventually abandoning recruitment agencies was conspicuous by its absence at the recent events. Banks in Asia will still need recruiters to fill about 15% to 35% of their jobs in 2014 – senior front-office positions may require a higher ratio.
“The reality this year is that we are busy hiring and I don’t have enough staff in my team to compete with what the agencies do,” said one of the Hong Kong roundtable delegates, all of whom asked not to be named in this report. “If we want to hire better people in the front office, our own networks aren’t strong enough to headhunt them, and direct advertising doesn’t work well for high-end roles either, so we have to use search firms.”
Another Hong Kong attendee, from an investment bank, added: “In the front-office more confidentiality is needed. It’s culturally unacceptable in many Asian countries, not just in Hong Kong, but especially in Japan and Korea, for HR at one bank to contact senior people at another bank directly.”
Banks have been successfully boosting their staff-referral programmes over the past two years, using this comparatively cheap hiring method to reduce costs. “But having done this, we find there are limits,” admitted a representative from a regional corporate bank in Hong Kong. “Referral hires can result in our line managers taking on too many of their former colleagues, which creates pockets of similar talent. Headhunters can spread the net wider and create more diversity.”
Vendors who add value
So far, so profitable for all recruiters? Think again. “The days of multiple recruitment vendors and big preferred-supplier lists are gone,” said an investment banking HR professional in Hong Kong. “The challenge for us is to find one or two quality ones in each Asian market.” A Singapore roundtable attendee from a US bank said her firm was consolidating its panel of recruiters and focusing only on the top performers.
To join the chosen few and cash in on the recovering job market in Asia, recruiters must “move up the value chain” and “partner” with employers, according to several roundtable delegates in both Hong Kong and Singapore. They did, thankfully, provide examples to explain these corporate catch-phrases.
“This year in the front office the headhunter’s role is candidate ‘extraction’ – making sure that the job offer actually happens,” said a HR person from a European bank in Hong Kong. “For example, with senior traders and bankers there are issues around deferred bonus buy-outs that make it difficult to get the candidate on board.”
A Singapore roundtable panelist from another European bank added: “Recently we’re putting much more emphasis on accuracy and due diligence, demanding from recruiters that details of previous roles and salaries are correct and formatted in the right in-house manner so we can validate them. Issues such as employment-visa status and deferred bonuses must be flagged up from the start.”
Banks in Asia are also turning to recruiters for market mapping of potential candidates across the front office, especially in emerging Asian markets, preferring them to the services of the cheaper market-mapping specialists. “The mapping-only firms just give you a list, they can’t tell you who’s the best person on that list – that’s where recruiters can add value,” said a Hong Kong-based HR person from an investment bank.
“The best recruiters know us so well that they will suggest ‘off-piste’ hires that we’re not advertising for, but which meet our business needs,” said a corporate banking attendee in Singapore. But as well as knowledge of their internal operations, banks are demanding that recruiters have a vast candidate network, developed over several years in Asia. “There are too many who have moved into Asia only since the GFC and lack in-depth relationships here,” bemoaned a delegate in Hong Kong.
Roundtable delegates said only a small minority of recruitment agencies were resorting to underhand tactics to eke out market share. But a representative from an Asian bank in Singapore still had a harrowing tale to tell. “We recently cut a particular agency from our panel of recruiters. They had a database of our staff and after being cut they used it to email our employees, trying to poach them for their other clients! We had to get IT to block all emails from them.”
“Wow, that’s seriously unethical,” sympathised his counterpart from a global investment bank.