Financial services professionals in Singapore and Hong Kong remain confident of receiving an annual bonus, says a new eFinancialCareers survey. But be warned: 2014 isn’t looking like being a year for bumper payouts in Asia.
The vast majority (71% in Singapore and 78% in Hong Kong) of respondents to our bonus expectations survey believe they will receive a bonus for 2014. Fewer than half (42% and 43% in Singapore and Hong Kong respectively) of them, however, expect it will be higher than last year’s, according to the global survey, which polled financial service professionals during September and October, including 1,030 based in Singapore and Hong Kong.
In the same survey last year, more respondents (50% in Singapore and 53% in Hong Kong) were optimistic about getting a rise. Banks’ efforts to pare back staff bonus expectations appear to be working.
“This year most banking employees I’ve met don’t expect many changes to their bonuses,” says Gary Lai, managing director at recruiters Charterhouse Partnership in Singapore. “Expectations fell after the financial crisis and haven’t yet caught up 07/08 levels. Banks in Asia have encouraged employees to be much more realistic about bonuses – and I don't foresee a huge upswing in the near future.”
Compared with their Asian counterparts, survey respondents in the US and UK were more upbeat, with 60% and 56% respectively expecting their bonuses to increase this year.
“The US and UK have been through a rougher economic times than Singapore and Hong Kong since the crisis and are now recovering from a lower base. While things are looking up there, in Singapore we are still seeing offshoring of back-office jobs to lower-cost locations,” says Christina Ng, executive director at LMA Recruitment in Singapore.
The east-west expectations gaps is also partly explained by the fact that a higher proportion of respondents in Asia (about two-thirds compared with only half in the US and UK) work in the back or middle office, where bonuses tend to be low. “The front office definitely leads the way in terms of bonuses and in Singapore the percentage of front-office staff in the workforce is still less than in the US or UK,” says Ng.
Asian finance professionals have little to complain about when it comes to salaries, however. In Singapore and Hong Kong 82% and 68% of respondents respectively reported that their base pay had increased over the past 12 months – the Singaporean percentage was the highest globally. “This year in Asia people are almost always more concerned about base salaries than bonuses,” says Lai from Charterhouse.
Many of these recent Asian pay hikes have been on the substantial side, especially in Hong Kong where 45% of survey respondents reported an increase in the 11% to 30% range. Skill shortages in functions like compliance, risk and relationship management are helping to drive up salaries in both Hong Kong and Singapore.
A minority of finance professionals (18% in Singapore and 27% in Hong Kong) believe that their bonus will fall as a result of their salary rise.