EU bonus curbs seen to spark rush to Asia
March 22, 2013 | South China Morning Post
Job search firm DHR says Western executives are becoming increasingly interested in jobs in the Asian market as times at home get tougher
By Enoch Yiu
Curbs on bonuses and the economic slowdown in Europe will trigger an exodus of finance talent in Asia's direction in the coming year, international executive search firm DHR predicts.
Geoff Hoffmann, who was appointed DHR's chief executive in October, said the recruiter had already noticed a growing trend of European executives looking to work in Asia.
"The bonus cap in Europe will lead Western talents to consider taking up opportunities in Asia. As usual, the best talents go where there is more money," Hoffmann said on a trip to Hong Kong.
New rules to be introduced next year in the European Union will limit bankers' bonuses to no greater than their salary, the toughest bonus regime in the world. The same fate may be awaiting fund managers, as the European Parliament is reportedly pushing to widen the pay cap for bankers to the entire financial sector.
Switzerland, traditionally Europe's staunchest free-market bastion, is separately reining in executive pay after voters recently backed pay curbs in a referendum.
Even without the bonus issue, Hoffmann said, Western executives had of late become much more interested in gaining Asian work experience.
"Asia is the fastest-growing region in the world. Mainland China, for example, has annual economic growth at 7.5 per cent, higher than all mature Western markets," Hoffmann said.
"Some Western executives and bankers are keen to gain Asian work experience as they believe in the region's long-term growth story."
DHR, which has its headquarters in Chicago in the United States and 50 offices in 19 markets in North America, Europe, South America, Australia and Asia, helps companies fill senior-level jobs.
Asia now represents about a quarter of its business, but Hoffmann expects the region to grow in importance for the company in the coming years.
Hoffmann said multinational firms liked to hire Western executives with experience of working in several countries, but executives who wanted to work in Asia also needed to have knowledge about the language, culture and regulation in the region.
"Companies would like to hire people who have local knowledge and connections," he said.
Salaries in the Asia market now matched those in Europe and the US, Hoffmann said. Companies in the technology, retail and health-care industries were seeking to hire the most people in senior levels, in step with their expansion plans, he said. Asset management firms and private banks are also hiring more people to meet rising demand for wealth management as the number of wealthy people in Asia climbs.
In contrast, investment banks, which have taken a hit from the declining market for initial public offerings, are among those freezing their headcounts.
Overall, however, "the employment market this year is better than last. The European markets are still filled with uncertainties, while the US economy is stabilising. The Asian economies, meanwhile, are growing rapidly, allowing companies in the region to hire", Hoffmann said.