25 January 2017, Australia – Leading global professional services recruiter, Morgan McKinley, has released it's latest APAC Employment Monitor for Q4 2016. It reveals a 5% decrease in jobs, quarter-on-quarter and 26% decrease in candidates, quarter-on-quarter.
APAC Employment Monitor Q4 2016 Highlights:
Q4 wraps up a year likely to be best remembered for American and British voters sending shockwaves across the globe. Though both the Brexit referendum and election of Donald Trump were felt with varying degrees in the APAC region, their full impact remains to be seen. For now, however, the region’s financial services remains steady from both a jobs and job seeker standpoint.
As the year comes to its end, seasonal factors conspire to create a year-end dip in both jobs available and candidates. Hiring budgets have been exhausted, meaning irrespective of an appetite to hire, institutions are forced to hold off until the New Year, accounting for the drop in jobs. The holiday season, in turn, compels professionals to turn their attentions toward non-work commitments and to put off seeking new opportunities until the end of bonus season, which mainly concludes in Q1.
Save for Australia, the APAC region functions on a January to December fiscal budget. “The end of the year is for crafting a hiring plan, the beginning of the year is for executing that plan”, said Richie Holliday, Chief Operations Officer, Morgan McKinley Asia Pacific. “We’re seeing the seasonal jobs slowdown now, and similarly can expect to see a jobs spike in the first quarter of 2017”.
2016 was the first year that Morgan McKinley began reporting contractor employment data. An essential part of the financial services industry, contracting jobs started the year off with a robust increase of 50% quarter-on-quarter, and closed the year with a drop of 21% in jobs available.
“The APAC region remains slower than others to embrace contract employment, but as the region adjusts to ongoing market and political volatility, we expect the sector to grow”, said Holliday. “Contractor jobs are the most susceptible to seasonal shifts, so it’s normal to see them outperform during spikes and underperform during lulls.” During periods of uncertainty, financial institutions are often unable to secure budget clearance for additional permanent staff, so a rise in contract jobs usually follows.
Australia, which operates on a different fiscal and holiday calendar to the rest of the region completed its fiscal year, which ends in June, in an upswing, but their calendar year in a modest drop in jobs. The more significant drop of 26% in candidates quarter-on-quarter can be largely attributed to seasonal factors such as Christmas, New Year, and the beginning of summer holidays.
“Candidates who registered interest in finding new work did so in Q3”, said Holliday. “With summer holidays running through January 20, the downward trend is likely to eat into the first quarter of 2017 before picking up again”.
An outlier among APAC countries, and despite ongoing domestic political turmoil, Australia continues to have a stable but unexceptional employment market. Its political instability means a clear vision for the economy remains elusive. “No one knows whether to expect infrastructure investments or a strengthening of export markets, but when you look at the success of larger players like Westpac and CBA, it’s clear they have positioned themselves for growth”.
Japan, which was struggling to find its economic footing in 2015 enjoyed a largely positive financial services jobs climate in 2016. It closed off the year with the highest performing stock market globally, and the stubbornly robust Yen finally began a descent, eliciting investor optimism. Japan was also the only country in the region to buck seasonal trends with an increase in jobs available in Q4.
In a first for 2016, candidate numbers were down in Japan. The 50% quarter-on-quarter decrease comes on the heels of a strong uplift in Q3 candidates, however. The previous quarter’s surge was prompted by a series of historic mergers that pushed candidates to seek out new opportunities at record rates. “The number of job seekers during the course of the year was even, but the operating climate pushed them to seek jobs simultaneously”, said Holliday.
Shanghai’s employment market has been negatively impacted by both the downturn in the retail sector as well as the property bubble. Whilst the appetite to manufacture remains strong, China is showing signs of shifting toward new growth areas. “Candidates are taking note of the pivot towards fintech and Internet 4.0 apps, and we expect hiring in these sectors to pick up after the Chinese New Year at the end of January”, said Holliday.
In an effort to boost its weakening export market, China devalued the Yuan and heads into 2017 with talk of further devaluation. The defensive measure is raising questions of how China can continue to fuel the growth of its economy at the rate which it desires. Adding to uncertainty are remarks from U.S. President-elect Donald Trump that have raised the spectre of a trade war between the two nations.
For multinational institutions and other large companies, the biggest challenge in recruiting top talent from around the globe to their Chinese operations remains a messy combination of red tape, cultural hurdles, and political challenges.
Hong Kong celebrates both Christmas and Chinese New Year, making for a compressed hiring period in Q1, and causing candidates to put on ice any efforts to seek new positions as early as December, making the 25% decrease in candidates consistent with seasonal trends.
Sluggishness among multinationals often translates to delays and reduced volumes of hiring for recruiters in this internationally dominated market, but improving trade flows with Mainland China are contributing to an improved economic outlook and optimism on the ground that bodes well for the year ahead.
Changes around the share and scope of Hong Kong’s banking and financial services employers are beginning to manifest on the ground. The increase in focus by Chinese insurance, asset management and banking institutions to grow a stronger foothold in Hong Kong is reflected by the hiring market, with fewer positions becoming available within the territory from the traditional bases of large, overseas multinationals
The Singaporean government’s efforts to limit foreign born non-resident professionals from the employment market influenced the flow of candidates markedly in 2016. Nevertheless, the Q4 slowdown in both jobs and candidates is more accurately attributable to seasonal factors.
The hiring restrictions are a source of ongoing alarm for both employers and candidates. In practical terms, the restrictions mean that when organisations reach their quota, irrespective of their needs and the availability of qualified candidates, they are barred from hiring anyone but citizens and permanent residents.
The government’s populist hiring tack is at odds with economic realities, as Singapore lacks a robust domestic market and its employers rely on their ability to hire the best from around the globe. “We’re hearing from candidates and employers on the ground that Singapore is becoming a less attractive place to do business because of the quota system”, said Holliday.
The new quota system isn’t the only challenge Singapore’s employment market faces. The cost of living is growing increasingly expensive, and it is home to strong wage inflation. Both factors are contributing to making Singapore a comparatively less attractive hub for the financial services jobs of today and tomorrow. However, there are ongoing efforts to ignite new areas of business and create investment opportunities in this sector, so there is still plenty of scope for things to move forward in 2017.
By the end of the year, the volatility of 2016 established itself as the new normal. “No one knows what 2017 holds, but our clients and businesses have adapted to the changes”, said Holliday.
If the rise in nationalist populism as seen in Europe, the United States, and Singapore spreads throughout the region, 2017 could see a rise in protectionist and inward looking nationalistic policies in the APAC region.
Were countries across the globe to turn inward, freedom of movement of people and of investments would invariably be impacted. “Freedom of movement is essential for robust economies and for the financial services sector”, said Holliday. “If the trend of nationalism picks up among the APAC countries, further slowdown and uncertainty can be expected”.
Amid the nationalistic and protectionist talk there are some bright spots to look out for. If the inward turn is paired with domestic investments, such as infrastructure projects, economies could see much needed jolts of investment and growth.
“No matter what 2017 has in store, good employers will always take advantage of opportunities to hire the best people, especially for revenue generating positions”, said Holliday.
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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.
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