How to get a banking job in Asia NOW but still get a bonus from your current firm
As the year draws to an end banks in Asia are doing more than just pipelining potential talent for next year. Increasingly, they are making offers of employment now for jobs not starting until bonuses are paid in 2015.
“Sign-on or guaranteed bonuses are virtually non-existent these days as most major banks in Asia are still in cost-control mode and estimating bonuses is a highly uncertain art,” says Jay Abeyasinghe, manager of banking and financial services at recruiters Morgan McKinley in Singapore. “As a result, the preference is to have candidates sign contracts by the end of this quarter and have them start work early next year.”
Moreover, if the contract is completed in Q4, some managers can squeeze the hire into their 2014 headcount budgets, which they are under pressure to use up by year-end, says Teo Howe Yuin, senior consulting manager at Huxley Banking & Financial Services in Singapore.
While some so-called “forward contracts” have March, April or even May start dates (to allow candidates to wait out their post-bonus notice periods), Teo says banks in Asia are now pushing candidates to join them in February 2015. “Usually they would rather buy out the notice period, so the candidate can start immediately after getting their bonus from their current employer.”
Not all the current crop of banking vacancies in Singapore and Hong Kong come with a delayed start date, of course. As we reported last month, banks are still offering guaranteed bonuses to an elite band of senior rainmakers in private banking and investment banking. More commonly, some candidates will be told to either decline the offer or accept it now and forgo their bonus.
Forward contracts are typically used in job functions where large (100% of salary or higher) bonuses are widespread – for example, trading, sales and corporate finance – but the actual vacancy isn’t urgent enough to warrant a guarantee, says Nick Wells, a director at search firm Webber Chase in Singapore.
“Mostly a delayed start date would be offered by a bank making a non-urgent hire due to perceived deal flow in 2015, or to fill headcount for someone they already know is leaving early next year,” adds Abeyasinghe from Morgan McKinley.
Signing a forward contract for a banking job in Asia isn’t without its challenges – many people suffer a slump in motivation during the time between agreeing the new deal and resigning from their current job. “Often it’s psychologically better once a decision is made to start in a new role without any delay rather than treading water for several months,” says Chris Jackson, a director at Pure Search in Hong Kong. “But a delayed start makes financial sense because you’re not walking away from your bonuses, so there’s usually little push-back from candidates.”
Spare a thought for recruiters and hiring managers, though. Given talent shortages in Asian banking – especially in areas like risk, compliance and relationship management – a candidate might well accept a better offer from a rival bank if it comes in before their delayed start date.
“Competing opportunities may also come via a promotion or pay rise at their current firm, so the candidate may well have a different mindset in the new year,” says Teo from Huxley. “The key for recruiters is to stay close to the candidate – remind them constantly of the reason they chose to join the new company and update them on the developments in the new team.”
Abeyasinghe concludes: “[efc_twitter text="A delayed start is a necessary evil in a climate where banks just can't pay guaranteed bonuses"].”