Talent war among banks and insurers drives up pay

An exodus of workers and a surge in new business from China have combined to spark a talent war among banks and insurers in Hong Kong, driving up wages for new recruits by as much as 30 percent.

While investment banks are cutting staff as China deal flow stalls, it is a different story in the insurance, banking, back office and wealth management sectors. Natixis estimates there are roughly 4,000 unfilled jobs in the industry.

"The easy and short answer is there's shortage in pretty much every single area within banking," with the exception of dealmaking, said managing director at Michael Page Hong Kong Olga Yung.

The pandemic and crackdown on civil liberties have prompted thousands of residents to leave Hong Kong in recent years, leading to a drain on the financial sector, which employs more than 270,000 people.

That is pushing salaries higher for finance and technology professionals in Hong Kong who typically command higher pay than in Singapore, according to Bloomberg Intelligence.

With the border reopening, mainland customers are flocking back to open bank accounts, invest and buy insurance policies.

"We have a shortage of labor in all disciplines, from mid office to back office to front line," said Stephen Chan, acting chairperson of the Hong Kong Association of Banks.

The industry faces a shortage of staff that is estimated to be in the "thousands," according to the chairperson for The Hong Kong Federation of Insurers, Orchis Li.

The economic rebound has led to a surge in hiring, pushing down the jobless rate close to a four-year low of 2.9 percent and the growth is expected to reach 4.6 percent this year, according to a survey.

While the government started a new visa program to bring in about 27,000 foreign workers, that will take a while, Li said.

About 35 percent financial firms surveyed by KPMG expect staff numbers to increase this year. As Wall Street firms cut back, Chinese companies are hiring.

Reflecting on the demand, the financial services sector saw a 4.8 percent average salary increase in 2023, one of the highest jumps across industries, according to a survey by Willis Towers Watson in February and March.

Workers changing jobs often see pay hikes. Candidates can command a 20 to 30 percent raise, according to Yung, up from about 10 to 15 percent in the past.