Skill shortages in Asian banking – and what to do about them

If hiring managers in Singapore and Hong Kong have one pet complaint, it’s that the talent pool in their cities (and within their own firms) just isn’t large enough to meet their headcount needs.

But are skill shortages in Asian banking really as severe as those involved in the recruitment process would make out? And what can banks do to help alleviate them?

Frances Wang and Gaia Gentili, practice leaders at consultancy Towers Watson in Hong Kong and Singapore respectively, have been researching the skill shortages facing employers in Asia. They chatted to us about how the banking sector in their markets is coping with an emerging set of talent challenges.

Where are the most serious talent shortages within Hong Kong and Singapore banking jobs?

Frances Wang: In Hong Kong, there are obviously shortages around risk, compliance and front-line sales, but these aren’t particularly new. More recently, we’re seeing a shortage of digital-banking skills at a more senior level as banks look to adapt to a digital-based model.

Gaia Gentili: In Singapore, the financial services industry is a maturing market and has built up its overall talent base over the past 10 years, however the 'war for talent' is affecting the banking sector. The challenge in the industry is not the lack of people but the lack of people with the right skills and value propositions to match a company’s values. According to our 2014 Total Remuneration Survey in Banking and Financial Services, we are seeing talent shortages in more specific functions where there's high business growth – for example, digital banking again and also wealth management.

How are banks in Asia trying to overcome talent shortages?

FW: In risk and compliance banks are already looking beyond the banking sector for talent – to insurance firms, to the regulators. And they are now starting to do so in digital banking – to e-commerce companies and the high-tech sector. This reflects an overall trend in Asia towards ‘talent convergence’, where the boundaries between sectors become less clear. Another trend, which banks are taking the lead on in Asia, is accessing the 'internal market' for talent – identifying people who have the strategically critical skills which, with training, could enable them to take on new roles. While most major Asian banks already have talent management programmes in place, they are now looking to enhance them to support business needs. From an employee perspective, if you're in the back or middle office and want to move internally, you must understand the business direction of your company and its implications for skills and competency requirements, rather than just focus on your day job.

Aren’t banks just paying people more?

GG: Overall there's been a steady salary growth in Singapore banking jobs over the last two years. According to our survey, salaries will keep on growing at an average annual rate of 4.7%. One of the trends observed is more salary differentiation between high potentials and average performers, a reason why the banking sector is also looking to retain people via 'total reward' strategies – not just base salaries.

Is flexible working part of this? A recent Ministry of Manpower survey found that more employers in Singapore are now offering it.

GG: Traditionally, flexi working hasn't been popular with Singaporean employers. This year the HR community is focusing on employees' health and wellness, thus flexibility is definitely playing a bigger role. The banking sector is talking a lot more about it as part of this new emphasis on employee wellness. Usually global banks here are still more open to flexible working hours than local ones and it's being used mainly to make banks' brands appear more appealing to the younger generation.

Has Singapore’s Fair Consideration Framework exacerbated skill shortages in banking by making it difficult to hire foreign talent?

GG: It's part of a government incentive to push the local economy, not just the banking sector. And we must keep some perspective – the FCF gives preference to local candidates on the government's Jobs Bank advertising platform, but for only two weeks and then the opportunities open up to others. The two-week requirement is an important signal that hiring local talent is important, but it won't have a huge impact on the talent market because the hiring process in banking can take three to six months. Plus it does apply mainly to roles with a monthly salary of up to S$12k, so it's not touching many managerial positions. And in any case, the majority of finance professionals here are already Singaporean. [efc_twitter text="What's important in Singapore is not the nationality of our talent pool, but whether we have the right skills"] to succeed in the digital era of banking.

Is the growing need to have mainland market knowledge adding to Hong Kong’s talent shortages?

FW: Yes, we’re certainly seeing more and more demand for front-office talent who know the mainland market – their needs and their preferences – and speak Mandarin, not just Cantonese. But in large financial services organisations in Hong Kong you also need to understand international practices and speak and write English – that combination is rare and does attract a pay premium.

How is this affecting graduate recruitment in Hong Kong?

FW: While in Singapore English is sometimes the only language graduates need to know, [efc_twitter text="in Hong Kong having Mandarin and Cantonese skills on top of English is now a matter of necessity, not a preference"]. So there’s now an even stronger emphasis in Hong Kong on hiring local nationals into graduates jobs.

Are banks in Singapore also changing the way their hire graduates?

GG: Singaporean employers are becoming more mindful about assessing 'soft' competencies, especially in business development, private banking and digital roles, so they can evaluate whether people will fit into their company culture.

Are junior banking professioanls in Asia moving jobs too often to take advantage of perceived talent shortages?

GG: I think they were up until as recently as three years ago when you’d see plenty of five-year CVs with three or more different banks on them. Now employers here are becoming more selective – not just looking for big brand names on CVs, but finding out if the candidate was actually at the bank long enough to acquire enough knowledge and skills.