Foreign firms lure compliance officers with CEO level salaries but are struggling to recruit talent in China

July 8, 2019 | South China Morning Post

  • The average pay package for an experienced financial fraud officer on the mainland can reach up to 2 million yuan a year, which matches the pay of a CEO of a small Hong Kong-listed company
  • International financial firms are seeking individuals in their 30s and 40s with strong digital skills

Digitally savvy financial compliance officers are in demand in China, with multinational companies offering to pay top dollar as they look to tackle rising white collar crime in the region, but such talent is hard to find, according to international headhunter DHR International.

Demand for professionals with experience in handling fraud, sanctions and money laundering in China has risen by 80 per cent year on year to June, which has led to an increase in salaries on the mainland and other financial centres in Asia, according to Robert Knight, managing partner at DHR International, which specialises in hiring C-Suite executives.

The average annual pay package, which includes basic salary and bonus for experienced professionals in China, has risen to between 1.8 million yuan (US$262,005) and 2 million yuan, up from 1.2 million yuan and 1.5 million yuan last year, Knight said.

Knight said that although such compensation packages was similar to that of a chief executive of a small Hong Kong-listed company, it was not easy to recruit talent in China.

According to PayScale.com, which offers compensation software solutions for companies, the average salary for a CEO in Hong Kong was HK$1.9 million annually (US$243,700).

In Asia-Pacific, 75 per cent of companies have been affected by fraud, corruption and other white collar crime in the 12 months to March 2019, up from 49 per cent in the same period a year earlier, according to a survey by financial data provider Refinitiv.

He said that international financial firms were seeking individuals in their 30s and 40s rather than those in their 50s to 60s previously, because younger professionals tend to have stronger computer skills and are able to easily identify computer-related fraud and risks.

“Nowadays, companies are accepting individuals with just seven to 10 years’ experience, and in some cases with little financial experience, as long as they have a strong educational background and strength in risk and compliance. All this is purely down to the lack of suitable candidates available in mainland China.”

He added that candidates who can speak Mandarin have a good chance of securing a job in Shanghai or Beijing.

The DHR executive noted that Hong Kong has similar demand for compliance officers, but because the city has access to a larger foreign talent pool and accepts non-Mandarin speakers, companies have less difficulty in finding the right candidates.

Desmond Ng Ka-yiu, head of Asia-Pacific at Allianz Global Investors (AllianzGI), said as the younger generation was generally more tech-savvy, “we welcome talent with competent tech knowledge for all functions”.

AllianzGI, which manages more than €530 billion (US$609.76 billion) worldwide, is part of German insurance giant Allianz Group which in November became the first foreign insurer approved by Beijing to set up a wholly-owned holding company in Shanghai.

“As China continues to open up the financial sector, it is going to add demand for senior financial officers and associated expertise on the mainland,” Knight said.

China will scrap foreign ownership caps in its financial industry from 2020, a year ahead of schedule, Premier Li Keqiang told business leaders on Tuesday during the “Summer Davos” World Economic Forum in Dalian, Liaoning province.

Besides compliance and fraud officers, Knight said that international financial firms have slowed down their hiring of senior executives in the first half of this year.

A lot of that is down to the fact that many international asset managers completed hiring senior executives for the mainland operations over the last 18 months so many of these roles are now filled. The China and the US trade war has also had an impact, but mainly on private equity firms’ portfolio companies, especially those involved in manufacturing.