China's Talents Reject Wall Street Banks At Home

China's Talents Reject Wall Street Banks At Home

International securities firms and Wall Street banks may be stepping up efforts to expand in Asia’s largest economy, but experienced local talents aren't going for these on home grounds.

Experienced recruits tend to prefer state-backed companies such as China International Capital Corp. and Citic Securities even though Wall Street firms could dangle higher salaries. This is because local rivals offer the prospect of big one-time commissions.

«Many candidates have limited interest in joining what they view as third-tier institutions in China,» said Christian Brun, chief executive officer of search firm Wellesley Partners, who was quoted in «Bloomberg» (behind paywall). Wellsley Partners has tried to interview more than 120 candidates for positions at foreign banks in China since October but less than a fifth were willing to even talk, Brun said. Those willing to talk are usually not the top talents, he added.

Piecemeal Hires

Foreign banks are still keen to hire for their expansion plans in China but preference for local firms have forced them to make piecemeal hires at selected places, hiring on campus, growing internal talent, or even relocating staff from other Greater China teams. 

UBS has moved 54 employees to China from Hong Kong since 2016, including 20 investment bankers, Bloomberg reported. HSBC Holdings's local securities joint venture, HSBC Qianhai Securities, has grown from a team of 100 to over 170 in its Shenzhen, Beijing, and Shanghai locations since it was set up in December 2017.

Raising Basic Salaries Not Enough

Another challenge faced by some foreign firms is the lack of existing incentive systems which can add to the bankers' overall bonus pool. Although foreign banks may offer higher salaries, local firms can allow bankers to earn more by sharing one-time commissions from other departments via so-called cross-selling, popularly dubbed «one bank» solutions, a growing trend in the sector fuelled by the region's self-made wealth.

Credit Suisse and Deutsche Bank in Asia have implemented similar incentives for their bankers, given that a great percentage of their private banking clients in Asia are also entrepreneurs. Flexible incentives, dynamic environment, and more career development paths are what draws bankers to join the bank, said Viviana Wu, a senior partner at executive search firm CGL Consulting.