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BloombergHONG KONG / SHANGHAI (Bloomberg) – In the United States, it is known that the largest investment banks on Wall Street reject about 95% of job candidates. In China, it is often the opposite.
Although international securities firms are stepping up their efforts to grow in Asia's largest economy, experienced local recruits tend to prefer state-funded companies such as China International Capital Corp. and Citic Securities Co. offer the prospect of large one-time commissions.
The talent shortage complicates the efforts of foreign banks to take advantage of China's financial openness, which has continued at a rapid pace in the context of the country's trade war with America. This is another hurdle for international companies that are already facing fierce competition from domestic players as they compete for $ 44 trillion in industry.
"Many candidates have limited interest in joining what they view as third-tier institutions in China," said Christian Brun, chief executive of research firm Wellesley Partners, which hired bankers in Asia during two decades.
Foreign firms have a limited pool of hires because they need language skills and an understanding of international compliance standards, said Mr. Brun. And the reluctance of the bankers of the largest Chinese institutions to join them only adds to these pressures.
Brun and his team have been trying to interview more than 120 candidates for positions in foreign banks in China since October. Less than a fifth were willing to even speak, he said, while those who did it were often not the best talents.
This is a marked difference from the United States or Great Britain, where jobs at major international banks, including Goldman Sachs Group Inc., UBS Group AG and Morgan Stanley, are among the most sought after by professionals of finance.
Foreign banks continue to hire and expand in China, but the limited options require them to hire on a case-by-case basis by recruiting locally, recruiting on campus, developing talent internally, or even transferring staff. other teams from Greater China.
Since 2016, UBS has transferred 54 employees to China since Hong Kong, including 20 business bankers, said a person close to the case. HSBC Holdings PLC said that the headcount of its local securities joint venture, HSBC Qianhai Securities, had reached 170 in Shenzhen, Beijing and Shanghai since its inception in December 2017 with a team of 100 people. Morgan Stanley, Goldman Sachs, JPMorgan Chase & Co., UBS and Credit Suisse Group AG have not commented.
A second-year badociate of a Chinese brokerage firm was approached by a global investment bank company for an opening in Beijing in mid-2018, according to the headhunter who handled the case and has asked not to be identified because the case was private.
After an interview and a six-month selection process, the candidate lost interest even though the new position would have increased his pre-tax compensation by 30%. It was almost extra time in his own business and he felt it would be easier to make deals in a local company.
The profits of foreign banks are still lower than those of the largest Chinese companies. UBS China announced a loss of 66 million yuan ($ 9.6 million) last year, while Citigroup China posted a profit of 2.6 billion yuan. The largest Chinese broker, Citic Securities, made a profit of 9.4 billion yuan in 2018.
In recent weeks, the vulnerabilities of international banks have been particularly striking while UBS has been hit with a negative reaction in China, including the loss of an agreement on bonds, on a boost from his chief economist on pork prices.
Eric Zhu, director of Shanghai-based global recruiter Morgan McKinley, worries that joint ventures can make money because the costs of running a business in China are high.
International companies are often willing to increase potential hires by about 30 percent, Zhu said. "There is a big question mark about the sustainability of their investment in China."
The hiring challenges go beyond the investment bank. Jason Tan, director of recruitment agency Kelly Services in Shanghai, spoke about a wealth management banker based in China, who had worked for CICC for over 10 years and received an offer from a foreign bank at the end of last year.
Although the offer resulted in a 60% increase in base pay, Tan said the banker did not accept it because she did not know if her total compensation would be greater than 2 million yuan that she was paying annually to the CICC after her award as Executive Director.
While foreign banks may offer higher wages, local businesses, which typically have a wider range of product offerings, may sometimes allow bankers to earn more by sharing one-off commissions from other firms. Other departments through cross-selling. For example, a private banker might be allowed to share a commission by presenting a client to a colleague for a first subscription to a public offer.
"Compared to foreign companies, local businesses can offer a platform full of resources that provides more flexibility," said Viviana Wu, senior partner of executive search firm CGL Consulting, which is two decades old. experience in recruitment in the region. "Incentives are flexible, the work environment is dynamic, decision-making channels are relatively efficient and there are more paths for career development."Speech
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