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Funds, insurers drive recruitment in Hong Kong

(from south china morning post)

While banks such as HSBC are laying off staff, many fund companies and insurers are in a hiring mode to tap the growing opportunities stemming from the rapid growth in the number of wealthy Asians.

Fund houses have also been hiring to prepare for the cross-border fund sales scheme starting next Wednesday that will allow 100 Hong Kong-domiciled funds to be sold on the mainland. The regulatory requirement for fund managers to be based here has sparked a hiring spree.

Christine Houston, founder and managing director of headhunting advisory firm ESGI, which specialises in recruiting senior executives for financial firms, said the first half has been busier than last year, and believes the trend will continue.

Houston, a mother of three, was born and brought up in New York. After obtaining a degree in Economics followed by an MBA, she began her career working for cosmetics company Avon Products and then Revlon.

She was based in Japan for a number of years before shifting to the headhunting business by joining international search firm Korn Ferry in New York. She joined another headhunting firm and relocated to Hong Kong in 1994. She set up ESGI in 1998 and subsequently expanded with offices in New York and London.

How would you summarise the job market in the first half of this year? Which sector needs to hire more?

The first half has been definitely busier than last year. The asset management industry and the insurance industry hired the most in response to the growth opportunities in Asia. In addition, many hedge funds that have set up shop recently are also hiring.

Banking is the sector facing difficulties. Standard Chartered has reduced staff. HSBC has announced a continued reduction in staff globally. This is partly due to the regulatory capital requirements as well as a significant bank levy in the UK that puts great pressure on margins.

Banks, however, are still hiring – they may cut staff in some departments which are not profitable while hiring more for the profitable departments. The investment banking departments are under the greatest pressure. Other departments such as wealth management and commercial banking are doing well and there is hiring in these areas.

Will the trend continue?

We believe so. While the US market has begun a steady recovery, European markets are still very sluggish, making the Asia markets the fastest growing area worldwide. Many countries such as China, South Korea and countries in Southeast Asia have seen their middle class fuelling the demand of wealth management, life insurance and luxury products. The market reform plan, such as the mutual recognition scheme for cross-border fund sales from July 1, also led fund houses to hire more.

Has the recent stock market rally in Hong Kong and the mainland led brokers to hire more?

No. The stock market performance has had no direct impact on the recruitment market. Investors may make more money from the stock market rally but that does not mean brokers have to hire more.

My company was set up in early 1998 during the Asian financial crisis but we managed to become profitable in the second month after opening. We also survived the dotcom bubble bust in 2001, the SARS outbreak in 2003 and the 2008 global financial crisis. Surviving and thriving throughout these challenges illustrate the fact that companies here have continued to recruit talent for their long-term business goals, irrespective of markets ups and down.

The standard of English among Hong Kong youth has declined substantially over the past decades. This is partly because of the decision by the government to de-emphasise the teaching of English to focus on 'mother tongue teaching'CHRISTINE HOUSTON, FOUNDER AND MANAGING DIRECTOR, ESGI
The government-appointed Financial Services Development Council reported earlier this year that the city does not have sufficient financial talent. How can the situation be improved?

Language is a major issue. The standard of English among Hong Kong youth has declined substantially over the past decades. This is partly because of the decision by the government to de-emphasise the teaching of English to focus on “mother tongue teaching”.

Putonghua is important but English is still the language used in the business world. In order to remain competitive, we need talent who can speak both English and Chinese well.

We also need professionals who have good knowledge and experience in the specific areas of investment, risk management, sales and other administration areas. There are some roles and sectors in which demand for staff far exceeds supply and so we take a global approach to recruiting, sourcing talent from the US and Europe.

China is undergoing reforms of state-own-enterprises. Would overseas professionals be willing to join these reformed mainland entities?

It depends on the state of their development. Many mainland firms still cannot compete with international firms in terms of providing an environment and culture to be attractive to expatriates, including a clear career path and opportunities for advancement.

It is not just a good compensation package that persuades the best talent from abroad to move their whole family for them to work in the mainland. Most of them would want to have a clear understanding of their career path and trajectory if they stayed with a mainland firm for a decade or so.

Many mainland state-owned-enterprises still have senior government officials in the top posts and the expatriates would be reluctant to join as middle management as they may not have a chance to move up in the company.

In comparison, Hong Kong is a free market and has many international and local companies which recruit international talent from the worldwide market to work here and they can climb to the top of the corporate ladder. This is why Hong Kong can attract international talent.

What skill set do expatriates need to work here?

Aside from their functional or sectoral expertise, it would be advantageous if they had previous experience in the region or language skills.

As a female executive yourself, what do you think is the major challenge for women at the workplace?

I have experienced some discrimination earlier in my career but certainly not since coming to Hong Kong. My clients and colleagues have treated me no differently from my male counterparts. I think in many ways it is easier for a woman to have a career in Hong Kong as we are fortunate enough to be able to get domestic help here. I certainly could not have achieved what I have without the support of our helpers who helped raise my children.

It is, however, a fact that although many companies have female executives in middle management roles, there are very few in the executive suite. There are few female chief executives or directors in both Hong Kong and the US.

Women comprise only 10 per cent of directors of listed companies’ directors in Hong Kong. Many boards of US-listed companies are essentially old boys’ clubs. Women hold just 16.9 per cent of Fortune 500 board seats.

How can headhunting companies make a difference and help more women reach the top?

It is difficult. Many executives say they support board diversity. However, while “talking the talk” is easy, the reality is that when they appoint directors, they want their fellow directors to be people who think like themselves. As a result, women and minorities are hard to make it to the boardroom. I always present our clients with a diverse slate of candidates. Women usually bring a different qualitative skill set while younger staff can bring in new thinking and social media knowledge.

As an entrepreneur, do you want the government to do more to help your business?

I don’t think it needs to. Hong Kong is a great place to do business. The tax rate is low and the business environment is very friendly. I enjoy doing business in Hong Kong.