Asia fund execs to get lower bonuses this year: recruiters
Article published on December 6, 2018
By Ysrael Dumasig, Kylie Wong
Fund executives in Asia should expect a drop in bonus payouts after a tough second half of 2018, with some firms having already implemented initial cost-cutting measures, recruiters say.
Amid trade war and interest rate concerns, many global fund houses have suffered significant outflows this year. For foreign firms, their Asian businesses are generally doing better, but some companies also started seeing outflows from the region in the third quarter, according to Timothy Tse, founder and CEO of Achievers Recruitment, a Hong Kong-based recruiting firm specialised in asset management.
As a result, some fund houses have begun reducing operating expenses. Firms have not yet gone to extreme measures such as large-scale layoffs, and salary increases, which are typically 3% to 4% in Hong Kong, are likely to remain stable, but the impact on bonuses is much bigger, Tse says, citing his recent conversations with Hong Kong-based fund firm CEOs.
Chinese firms in Hong Kong tend to be very generous on bonuses, with some firms offering up to 18 to 36 months of pay to investment staff last year, but this year they are expected to be a lot more prudent on bonus payouts, Tse says. But Tse declines to give any actual figures as they vary greatly from firm to firm.
Will Tan, Singapore-based managing partner at executive search firm Principle Partners, believes bonuses for fund executives could go down around 15% to 20% this year.
“Looking at how markets performed this year, the lower bonuses should not come as a surprise,” he says.
Tan believes there will be limited hiring activities in the first half of 2019, given the many challenges fund management firms faced this year.
“While a few new roles will still be created, I don’t see how fund houses will be rushing into hiring. Rather, I definitely think that next year they will be adopting a cautious, measured approach to hiring.”
Hiring for sales and marketing roles, as well as client servicing functions, will still continue, he says, as firms will want to ensure they keep their clients happy in spite of jittery markets and economic uncertainties.
Within Asia, Tan says China will probably see the most hiring activities, with both an influx of talent from other markets and local talent being trained up to take on new roles next year.
“China’s asset management industry is less than a decade old. It’s an industry that’s going to grow in the next 15 to 20 years and it’s not going to slow down anytime sooner, whether there’s a trade war or not.”
In Singapore, a shortage of middle to senior level jobs is expected in functions like portfolio management, product management and chief investment officer roles, according to Jay Abeyasinghe, Singapore-based front-office financial services director at Morgan McKinley.
With the organisational restructuring of various firms in the past few years, most fund houses have been focused on cutting costs and are quite reluctant to make senior hires across the board, Abeyasinghe says.
Professionals from other parts of the financial services industry like banking and sell-side equities research transferring to the asset management industry also play an important factor in the surplus of candidates in the job market in Singapore, he adds.
When the job market starts to get busy, which is usually after Chinese New Year ends, Abeyasinghe says the most in-demand roles will be those in institutional sales or business development in the mid-to-senior level and research analysts in the junior-to-mid level.
Abeyasinghe also sees growing demand for financial technology roles, especially with international fintech firms setting up shop in Singapore.
According to the most recent salary survey report by Robert Walters, fintech roles and financial services professionals with programming and basic development skills, are expected to the get the most salary increases in Greater China and Southeast Asia.
In Hong Kong, for example, professionals with technology-related niche skills are able to command premium pay rises of 30% or more when moving companies, the report says.
Selene Ma, Hong Kong-based manager for middle and back-office financial services team at executive search firm ConnectedGroup, says that despite the turbulent markets in the second half of the year, some asset management and hedge fund firms are actually still growing and expanding their businesses in Hong Kong and China.
Over the past few weeks, Ma and her team have picked up new assignments, which are additional headcounts rather than replacement roles. Usually, at this time of year, additional headcounts are rare, she says, and it is quite a surprise that firms are still hiring as the year closes.
“Most of these clients are planning to get people on board in early January or the first quarter of the year. So the momentum still remains quite positive coming into the first half of next year. But the second half is just hard to tell,” she says.
Portfolio management roles and investment management support roles, as well as regulatory and compliance-related functions, will see the most demand next year, according to Ma.
Matthieu Imbert-Bouchard, Singapore-based managing director at Robert Half, says the hunt for top talent next year will be stiff as organisations will compete in an increasing limited pool.
As companies expand headcount in strategic areas, incentivising candidates with attractive salary increases is key to securing and retaining top talent, Imbert-Bouchard says.
“This is especially true within the financial services sector, where salary remains one of the largest determining factors in whether jobseekers accept and remain with the company.”
Morgan McKinley's Abeyasinghe says now is the best time to approach recruiters if senior management executives are unhappy with their current job.
“Now is the time to have a conversation. There’s no pressure, no rush. We can start keeping them in mind for the busy hiring period, which normally starts after Chinese New Year," he says. "They just have to be aware of that timeframe and manage their expectations accordingly."