02 August 2016, Australia – Leading global professional services recruiter, Morgan McKinley, has released it's latest APAC Employment Monitor for Q2 2016. It reveals that wealth management and retail are driving growth in employment in Australia whilst investment management hiring stalls.
APAC Employment Monitor Q2 2016 Highlights:
On the heels of a robust start to the year, quarter-on-quarter figures across the APAC region for permanent and contract jobs, as well as professionals seeking new roles, are down in quarter 2 (Q2). While professionals seeking new roles dropped from 61,864 in Q1 to 39,890 in Q2, year-on-year figures showed an increase of 23%, from 32,499 to 39,890. Year-on-year permanent jobs remained steady, with a minor decline of 3%, from 16,052 to 15,610. Quarter-on-quarter contract positions are down 30%, year-on-year down 13%.
“As expected, the first quarter absorbed the annual post-bonus spike in job-seekers,” said Richie Holliday, Chief Operations Officer, Morgan McKinley Asia Pacific. Bonuses in parts of the region are distributed shortly before the Lunar New Year, which came early in 2016, falling on 8th February. In a reflection of the wavering Chinese economy, employees there reported a drop in bonuses from previous years.
“The most popular areas for hiring across APAC are private wealth management and private banking,” said Holliday. “By and large, financial services hiring remained steady however hiring all but stalled for investment banking”.
The annual World Wealth Report compiled by Capgemini showed a growth of 10% in wealth in the APAC region, with more of the world’s wealth controlled by Asian millionaires than their North American or European counterparts. Therefore it comes as little surprise that institutions are diverting efforts to growing private banking arms and focusing on mergers and acquisitions (M&A) instead of more traditional business revenue generating efforts.
The Q2 data for the APAC Employment Monitor only captures a handful of post-Brexit working days. Therefore, it does not reflect what, if any, impact the results of the 23rd June referendum may have on employment figures. “Uncertainty is never good for the market,” says Holliday. “If we see further exits from the EU, we could be looking at a global slowdown. However, good talent is still needed across the board, and with no action taken to formalise Brexit, its business as usual on the ground in Asia”.
As most APAC countries follow a January through December fiscal calendar year, budgets for new projects are normally signed off on in late Q3 or early Q4. These fresh revenue streams are released in the New Year for spending on new platforms, assignments and staffing needs. This seasonal factor means a spike in Q1 contractor hiring, followed by a Q2 drop, was to be expected and is reflected in the data.
“The cyclical nature of the numbers is hiding the underlying story, which is that financial institutions are scurrying to ramp up their fintech efforts,” says Holliday about the immense growth in the field, which relies heavily on expert contractors and which is having a significant impact on both CMOs and CTOs. According to a recent Accenture study, fintech investment more than quadrupled in 2015 to $4.3 billion in APAC countries, and the Financial Times recently called Singapore a “hotbed for fintech”.
“The expertise needed for fintech can’t be met by in-house staff. Without the operational knowledge on hand, we’ll continue to see financial institutions engage contractors with expertise in new platforms,” says Holliday. “Everyone in the industry is aware of the power of digital and data, and the Asian market, where customers’ number one choice is Internet 4.0 services, this sector will only grow”.
Though Standard Chartered, for example, has raised concerns with its laying off of branch workers, it has announced it will double IT spending in its Malaysian technology and operations centre. “The ability of financial institutions to adapt to the digital landscape will bode well for business, and is already making for a strong hiring climate. Any professionals looking to reinvent themselves should consider fintech,” continued Holliday.
With the Australian tax year running on a July through June cycle, a more subdued Q2 is standard. Nevertheless, Sydney saw a sizeable upsurge of 20% in jobs available quarter-on-quarter. However there was a quarter-on-quarter decline of 14% in professionals seeking new roles. “The rise in jobs is almost entirely in wealth management and retail,” says Holliday. “The slowdown in investment banking that we’ve seen in Singapore is very much evident in Sydney”.
“With the threat of another hung parliament looming in Australia, we may experience market instability and see knock-off effects of that in Q3, but that insecurity is not reflected in the Q2 numbers,” continued Holliday. In the wake of the election, Standard & Poor's changed its rating of Australia from ‘stable’ to ‘negative’, putting the country’s AAA rating at risk.
Demand for independent contractors in Australia is expected to increase as organisations rely on them to help streamline and modernise their operations. The climate for the work seems ideal, as Australian independent professionals report high rates of job satisfaction, with 91% reporting pride in their work, and 87% enthusiasm for their work.
Morgan McKinley’s Singapore business is continuing to grow, with its overall market share increasing to 10% in June 2016. Whilst the business has grown, certain industries have experienced a hiring decline, namely investment banking. “We’re seeing a number of businesses setting up shop or launching projects in Singapore,” says Holliday. “A large proportion of our work is in the financial services sector, particularly within wealth management and private banking. We saw a larger drop in this quarter in investment banking, but projects based work is busier than it has ever been”.
Amid a stark decline in manufacturing jobs, financial services is generating hiring growth, with wealth management and fintech leading the way. Singapore is the region’s leading fintech hub. April saw the UK Treasury announced the launch of a ‘fintech bridge’ between Singapore and the UK. The UK has also seen an influx of fintech related investment and job growth, though it remains to be seen if the fallout from the Brexit referendum will impact its trajectory.
Though M&A dropped in the first quarter to $669 billion worldwide, Asia’s global share reached 27.1%. The growth has been led by China, whose outbound M&A deals exceeded their 2015 total by the end of Q2 2016. The sharp hike has concerned regulators, which is expected to cause M&A deals to level off during the following two quarters.
With an eye to maintaining long-term global competitiveness, the government has launched an effort to recruit top professional talent from the international market and is easing visa restrictions for qualified candidates. Meanwhile, according to the China Institute for Employment Research, the domestic labour market’s response to overcapacity is resulting in the shedding of jobs in manufacturing and energy sectors in particular.
China’s appetite for international talent is further reflected in its increase of foreign direct investment in Europe, which reached record heights of $23 billion in 2015. Europe is attractive to China because of its large pool of highly educated professionals and relative lack of investment, as compared to the United States. Further, Europeans demonstrate a greater willingness than their American counterparts to enter foreign-language markets.
Given China’s robust investments in Europe, there are heightened concerns that the Brexit vote might have negative consequences for planned investments in Britain. A spokeswoman for the Chinese foreign ministry, Hua Chunying said, "I think the relevant countries and their departments need time to have a conscientious study of this new situation”.
The IMD World Competitiveness Centre rated Hong Kong as the world’s most competitive economy. Its low and simple taxation model helped it rise from its number 2 position in 2015, to just ahead of Switzerland and the United States.
Nevertheless, the outlook is far from rosy. Q1 saw quarterly economic growth hit a four-year low. Ongoing stock market volatility, as well as poor performance in retail and property markets all contributed to what amounted to a mere 0.8% growth, about half of what had been projected.
With a quarter-on-quarter drop of 22% in professionals seeking jobs, it’s clear that professionals are holding back. There was, however, a 6% increase in jobs available from Q1. Year-on-year, Hong Kong was the only market to have the same number of contract roles available.
Save for very slight salary increases specific to IT developers and middle and back office and risk management VPs, data from Emolument.com show year-on-year salary decreases across IT, risk management, compliance and middle and back offices. Senior compliance managers have seen a year-on-year drop of $20,000 in annual salary, and a halving of bonuses.
Between a Chinese economic slowdown, a strengthened yen, anaemic stocks and a weak global oil market, hiring in Japan is low and expected to remain so. Nevertheless, despite projections that financial firms would exercise particular hiring caution, hiring in Tokyo was among the most robust in the region, with a 20% increase in jobs available and 33% increase in professionals seeking new roles, quarter-on-quarter.
As in much of the region, this growth is largely attributable to the escalating demand for fintech, which is pushing the Japanese financial sector to assess its digital needs. As individual businesses grapple with this transition, they are faced with the challenge of whether to position data related functions under their CMO or CTO umbrellas. As the process continues to unfold, the need for top talent will remain high.
The yen has gained almost 20% in 2016, trading near 100 to the dollar. The currency’s ongoing surge is causing concerns among Japan’s major manufacturers, who stand to have their export profit margins severely hit. Q3 employment figures are likely to reflect the political and economic consequences of the Japanese government’s efforts to intervene in the currency.
Overall, markets are faring well and continued hiring growth is expected in fintech and wealth management for both full-time and contract professionals. Nevertheless, uncertainties remain and their impact is expected to be seen in Q3 and Q4 employment figures. The swift resolution of political questions in both the UK and Australia, in particular, are necessary for market resilience, as investors and institutions wait to see what the regulatory implications for their work are.
--- ENDS ---
Further press information:
Name: Tara Clancy | Senior Marketing Executive, Sydney
Tel: (02) 89863109
Alternatively, please contact the Press Office at email@example.com
Morgan McKinley APAC Employment Monitor Methodology
Morgan McKinley’s APAC Employment Monitor provides quarterly data on new professional job availability and the number of professionals seeking new roles in the Financial Services sector. The figures in this report are derived from Morgan McKinley’s own internal data from jobs released by employers and professionals registering for new roles in conjunction with market share figures and knowledge of the market.
In addition to we are now reporting on contract and fixed term contract (non-permanent) quarterly data on new professional job availability in the Financial Services and Commerce & Industry sector through the same methodology.
About Morgan McKinley
Morgan McKinley is a global professional services recruiter connecting specialist talent with leading employers across multiple industries and disciplines.
With offices across Ireland, the UK, EMEA, Asia and Australia, the company’s professional recruitment expertise spans banking & financial services; commerce & industry and professional services. Morgan McKinley is a preferred supplier to many of the major employers in its specialist sectors and thousands of smaller local firms.
Morgan McKinley APAC provides specialist recruitment services across the APAC region, including Australia, Mainland China, Japan, Hong Kong and Singapore, working with clients and candidates to deliver local knowledge as well as global reach.