Expats in limbo in Asia's banking sector as localisation takes hold

Expat banking professionals in Hong Kong and Singapore are being locked out of the finance job market. After years of enjoying a relatively privileged position, Westerners now face limited opportunities as Hong Kong's financial sector looks towards China and Singapore's localisation drive freezes them out of the job market.

Many long-term expats in the two cities are now in career limbo, deciding whether to return home, leave financial services altogether or face a potentially insecure future by remaining in Asian banking.

“My main worry is that when I next decide to move jobs I may have to leave Hong Kong. I’m unsure of my long-term prospects here because opportunities are shrinking for Westerners,” says a Hong Kong banking professional who recently left a major European bank to join a smaller firm. “There’s an ever-growing likelihood of having to move away at short notice, and with a young child I’d rather make a more planned move. I want stability for my family and that’s now increasingly hard to find here.”

If job prospects dry up in Hong Kong, he says he may be forced out of Asia entirely. “Since Hong Kong is still the premier city in Asia for finance roles, I doubt I’ll move within Asia so most likely I’ll look to somewhere like Australia. Or I’m also considering starting my own business if I want to stay in Hong Kong.”

The Hong Kong banking professional adds that there are still good opportunities for English speakers in the city, but they now crop up more “sporadically” than when he arrived four years ago. “While I still recommend Hong Kong to friends, I tell them to get here soon because it may be impossible to find work here in a few years.”

Amanda Lote, managing director of headhunters Lote & Partners in Hong Kong, describes the future for expat investment bankers as “uncertain” as Hong Kong’s financial system becomes more mainland-focused.

“Some want to stay but can’t find a seat. And realistic exit options in HK are few and far between – private equity is a closed shop if you don’t have Asian languages, as are jobs that would be natural next steps in your home market, like CFO-type roles," she says. "Bankers might end up moving countries or dropping out of the industry to start entrepreneurial ventures. If you aren’t a Mandarin speaker in Hong Kong, you need some other strategic advantage to get by – management expertise or sector specialisation.”

But you also need to pick your coverage sector wisely in Hong Kong investment banking, says a former banker from a US bulge bracket who’s more recently worked as headhunter. “I’m seeing Western telecoms bankers in HK squeezed out by the Chinese guys because the clients are predominately Chinese now and speak Mandarin – it’s the same in consumer and FIG,” he says. “Ironically, though, compared with when I arrived in 2007, more expats want to remain in HK for longer – but it’s getting more difficult to do this, which is frustrating them.”

Similar for expats in Singapore

Foreigners rarely need to speak Mandarin in Singapore, but they also face a tightening job market as banks offshore operations jobs and prioritise local candidates under a law launched last August, the Fair Consideration Framework.

“Things got harder for me career-wise as time went by,” says an Australian banking professional who worked for three global banks during a seven-year stint in the city state. “The number of potential roles available shrunk as banks relocated hubs to lower-cost centres like Malaysia, India, the Philippines and China, or even pulled out of APAC. The growing Singaporean talent pool and a preference for hiring locals made things even more difficult.”

He adds that the rising cost of living in Singapore – ranked the world’s most expensive city by the Economist Intelligence Unit – is also helping to push out long-term expats, even senior ones like himself. “Cost was the biggest issue for us leaving as we were working hard just to pay rent and school fees, with not much left over. Our rent was S$100k [US$74k] per year for a modest four-bedroom house and all the schooling costs came to about S$70k [US$52k].”

Openings for expats in Asia are contracting in support functions, not just in the front-office, says Nick Wells, a director at search firm Webber Chase in Singapore. “Cost cutting means most banks are looking to local employees for back-office, accounting, research, risk-management, sector-analysis and trade-support roles.”

Where expats are still experts

Singapore and Hong Kong-based expats generally feel more secure about their career prospects if their roles involve regional or global responsibilities. “If you’re working across Southeast Asia, English is still the de facto language for business, so a Western banker is as good as anyone for these cross-border deals,” says the former bulge-bracket banker in Hong Kong. “And natural resources teams in Hong Kong still employ plenty of guys from resource-heavy countries like the US, Canada and Australia.”

He adds that expats in Asia must sometimes lower their salary expectations and be prepared to change companies more frequently if they want to remain in the region. “I spoke to someone last week who’s been at a big US bank in HK for three years but they want to move him back to the US. He's looking to stay in HK and join another firm but he’ll have to be more flexible with his next package – he’ll have to forget about continuing to receive a housing allowance.”

Wells from Webber Chase says not enough Westerners in Hong Kong and Singapore are expanding their job searches into emerging Asian markets such as Indonesia and India. “Because of this lack of flexibility, I’m now seeing some long-term expats going back to Europe and the Americas. Some are returning for a veiled promotion only to realise that their skill set is behind their local equivalents’, who have faced several years of local competition just to keep their jobs. Their experience of Asian markets was valuable, but not very advantageous outside of the region.”