By Frank Mulligan
According to the Financial Times, we all chose the wrong career when we decided to be makers, doers and helpers. The big money is in moving money around, and the best salary deals in China are being given to deal makers right now.
Local Chinese and international financial services companies have benefited from the recent opening of the market. The foreign companies have arrived at a good time, with huge volumes of cash sloshing around in unrewarding bank accounts, or lying under mattresses. It’s the perfect meeting of supply and demand.
Competition for the skills needed to manage huge volumes of investment has resulted in fast rising salaries, and many companies have been forced to reach outside the financial services industries to get the skills. This is hardly surprising when assets under management have grown from $40 billion to almost $450 billion in the last two years. US and European money managers have noted the opportunity and if they are not here already, they are currently on a plane here.
So the graph of China financial services salaries terminates somewhere in the near-term to mid-term future, and in line with those offered on Wall Street. The really big boys in China are seeing US$1 million bonuses. That’s not salary, just bonus. Think how attractive that is for the finance people in your organisation.
The banking industry meanwhile is experiencing similar challenges in acquiring the right skills. With the recent opening to foreign banks of RMB business and retail banking, Recruiters are challenged with finding big volumes of credit controllers, bank managers, and other banking professionals. They operate in a market that lacks people with experience of trade finance, options, currency trading and other modern bank service offerings. What little experience there is in China is very shallow, and recent.
For the few banking professionals who have a decade of experience there is big demand for their skills, and rising salaries. But as a senior international banker recently pointed out to me, there is one big limitation that holds them back. None have ever experienced a downturn, and we are currently as close-to-one-as-you-can-get-to-a-downturn. For China this would probably translate to a slowdown in growth, which is very different from a recession.
Senior banking officials are currently watching their teams build up slowly, and many have an underlying fear that individual team members are not tested, and if tested they might well break. Some of this can be alleviated with training but one solution would be to import the needed skills. This works for the senior level positions but it’s never going to fly for junior staff.
This is one skills shortage that is likely to continue for some time.
Frank Mulligan, Talent Software