Market Report China s 2012 Hottest Job Sectors Simon Mortlock APAC Editor
Market Report China s 2012 Hottest Job Sectors Global economic uncertainty is bound to have an impact on China s employment environment this year, with cost controls driving down overall recruitment, especially at foreign firms. But that s not to say that the market will be completely moribund. In fact, there are several job functions, including the ones we feature below, that will continue to experience healthy hiring. If there s one position that will be highly sought after, it s risk whether that s market, credit or operational. But unfortunately for employers, risk professionals are in short supply. This white paper focuses on risk management and several other roles which will help shape the financial sector in 2012. It considers why these jobs are in demand and what the likely impact on talent sourcing and compensation will be. Sections: SME relationship managers Investor relations in private equity RMB funds Trade finance sales Market risk Operational risk Credit risk
SME relationship managers This year will witness the rise of relationship managers (RMs) serving small- and mediumsized enterprises (SMEs) in China, says Jason Tan, director of financial services and banking, PSD Group. Chinese SMEs have fuelled economic growth for decades and the bankers that service them are mainly based at local firms, which have better geographical and human coverage, superior balance sheets, and different lending policies compared with foreign banks. The international firms do, however, want a share of this market and are continuing to tap domestic employers for SME talent. The local talent have better guanxi (connections), explains Tan. Also, foreign banks look to transfer mid-to-senior people internally. One interesting trend in the last 12 months has been the increased hiring of management trainees into the SME RM space. For relationship managers with six years experience, monthly base salaries range between 40k yuan and 70k yuan. Those who move firms will typically pick up pay increments between 20 and 30 per cent, says Tan.
Investor relations in private equity RMB funds Private equity continues to evolve in China whether via regional/municipal governments, financial institutions or foreign joint ventures especially with the recent growth in RMB funds. For new funds setting up, there is a great importance placed on fund raising and subsequent limited-partner management, particularly as the environment is becoming much more competitive. Investor relations are playing an increasingly crucial role in this area, says Alistair Ramsbottom, managing director, The Blacklock Group. There will be continued demand for experienced investor relations professionals as the number of RMB funds increases. However, unlike USD funds, the local limited-partner base is very different not as professional, with a different investment outlook and needs to be managed accordingly. Very few individuals have the right experience, given that the RMB space is so new, adds Ramsbottom. RMB funds seeking investor relations staff may get lucky and attract talent from the limited pool of professionals working for their domestic rivals, while some may source from local law firms. Alternatively, they could approach people with USD-fund experience and hope they can make the transition. If these strategies are not successful, internal promotion may be the only option. Given the skill shortage, salary increases range between 30 and 50 per cent, depending on the responsibility of the position.
Trade finance sales Transaction banking which includes letters of credit, shipping guarantees, import/export financing, supply chain financing and trade settlements is an important division for most international commercial banks in China. And trade-finance sales professionals, who work within transaction banking, remain in demand even during the global economic downturn, says Daisy Chen, manager of banking and financial Services, Robert Walters Shanghai. Banks need salespeople to build connections with large local and multinational corporate clients, and to provide trade-finance products and services. Yet they are not easy to source. This is a specialist role which requires solid product knowledge of the trade-finance business rather than a generalist one like relationship managers, who only deal with clients from an account-management perspective, explains Chen. A need for strong sales acumen and existing client networks further limits the talent pool, which is small in comparison with the corporate-banking front office. Some foreign banks in Shanghai extend their search into Hong Kong and Singapore. But there are still a number of trade-sales vacancies in several banks that have been open for three to five months with no suitable candidates, adds Chen. A typical increment for job hoppers whose current pay is at market level is between 30 and 40 per cent. However, percentage rises may be higher for top-performing operations or product professionals who move into trade finance.
Market risk There is demand from both local and foreign banks desperate for qualified market risk candidates. Chinese banks face capital stress after the Basel III launch in China. The new rules will keep the minimum capital adequacy ratio for banks of systematic importance at 11.5 per cent, while raising the ratio for banks of non-systematic importance to 10.5 per cent, Stephen He, banking and finance manager, Kelly Services. The talent pool is limited because the very concept of market risk is comparatively new in China. Some firms are filling the gaps by hiring market risk people from Hong Kong and Singapore, but these candidates must speak Mandarin, says He. Not to mention being able to understand the new rules from the PBOC and CBRC, as well as translate and apply them into daily trading and monitoring. However, as the domestic market matures, He has also seen a small but growing number of local market-risk employees who have received their training either in China or at their firm s regional Asian headquarters. I ve even come across some candidates who transformed themselves from a trader background. Job seekers should expect a pay rise of about 20 to 30 per cent if they join a new company.
Operational risk Due to business expansion, regulators and banks are placing additional focus on risk monitoring and internal control. In addition, as companies move from a cost-cutting platform to focus on processes and operational losses, the demand for operational-risk expertise has risen, says Katrina Khan, manager of the Shanghai financial services team, Morgan McKinley. China lacks professionals with operational-risk expertise. As a consequence, banks are looking to their competitors for suitable profiles, poaching employees from one another to fill vacancies. Some firms are making internal transfers within departments, or hiring from other pools of candidates such as the Hong Kong market, says Khan. Foreign banks in China dominate recruitment. Because of the shortage of skilled talent in the risk area, the average increase in pay is 35 per cent.
Credit risk Credit risk analysts are in demand at foreign banks as they open new branches in cities such as Guangzhou, Shenzhen and Chengdu, says Cherol Cheuk, general manager of Hudson Shanghai. They also have vacancies for credit risk managers, usually based at their Chinese headquarters in Shanghai or Beijing. As with all risk functions, there are not enough people to fulfil demand. This is because credit risk is new to the China market; it has only started to develop since 2006. Usually, to solve this problem, companies will consider professionals from Hong Kong and Singapore. They will recruit talent over there and send them to China as this function can take on people with less local experience, explains Cheuk. This is a difficult field to break into. Nearly all credit risk managers start their careers as analysts hiring from other functions is rare, says Cheuk. Unsurprisingly for such a closed sector, average pay hikes are in the 20 to 30 per cent range, and sometimes go as high as 50 per cent.
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