Large banks in Hong Kong and Singapore are telling more senior finance professionals to take contract roles instead of joining them as permanent employees.
As headcount restrictions make it more difficult and time consuming to add staff above vice president (VP) level, hiring managers are increasingly turning to contractors, says Adam Solomons, associate director at recruiters Hydrogen in Singapore.
“There’s also been an increase in senior people being replaced by more junior ones, so junior hires are now typically permanent because it’s easier to get headcount approval for less costly staff, with the use of contractors for more senior positions,” he says.
Solomons says average pay for the contract jobs his firm handles in Singapore has shot up 36% in the past 12 months, mostly as a result of senior jobs making up a larger proportion of the total. “We’re seeing more senior roles coming through than ever before. A lot of this is project related – banks are getting the senior leaders in first and will probably then hire more juniors.”
Continued market volatility in Asia has also fuelled the growth of senior contracting this year, says James Stokes, an executive at recruitment firm Anton Murray Consulting. “Across both Singapore and Hong Kong our banking clients are increasingly offering senior-level contract roles. Banks are considering contracts as effective methods of safeguarding their businesses against volatility, while still providing the flexibility to offer a permanent role at the conclusion.”
Contracts in Singapore and Hong Kong typically last 12 months. And they are mainly used by the larger banks such as HSBC, Citi, Standard Chartered and J.P Morgan, says a recruiter who specialises in the contract market and who asked not to be named.
There are two provisos to the uptick in senior contracting. Firstly, in terms of sheer numbers most contract roles in Asia are still at VP level or below. Secondly, the senior roles on offer are predominately in technology and in the back and middle office.
“For example senior contractor opportunities exist in technology-delivery jobs where there's a specific programme of work,” says Solomons from Hydrogen. “With a number of major transformational technology programmes happening in Asia, which often have urgent hiring requirements, contractors provide a logical solution.”
James Redshaw, manager of recruiters Randstad Technologies in Hong Kong add: "Senior level contracting is concentrated within compliance and regulation to help manage specific projects as well as within banking cost-saving exercises, such as offshoring. By focusing on contracting on a project basis, banks are able to better manage their headcount constraints and hire based on the peaks and troughs of their business."
More interest in contract jobs in Singapore and Hong Kong
Banks (most notably Barclays and Standard Chartered) have been focusing their recent job cuts on experienced staff and this has made senior candidates more open to contracting, says Solomons. “Providing that the contract length is 12 months plus, it’s not difficult to attract a good shortlist,” he says. “We’re also seeing more senior people than ever in Asia becoming disillusioned with climbing the banking corporate ladder, so contract working is becoming more attractive.”
Stokes from Anton Murray Consulting adds: “The tightening of headcount across investment banks in Asia has made it difficult for many senior people to find permanent roles and in some cases they’re actually more receptive to contracting than junior candidates are.”
Senior contractors also tend to enjoy testing out the “working environment” at a particular bank before being potentially given a permanent role, says Stokes. “The speed at which a contract can be arranged and executed is another element they like.”
Despite the rise of senior contracting, “career contractors” – people who choose to move from one temporary assignment to another regardless of the availability of permanent work – remain rare in Asia.
“As soon as a perm role materialises at another bank they jump ship,” says Kyle Blockley, managing partner of recruitment firm KS Consulting. “I’ve had cases where integrity has been a major issue as candidates have accepted a contract role on Tuesday only to be offered a perm one on Thursday – and they didn’t even have the decency to let us know they wouldn’t be signing the contract.”
Senior professionals who do accept contracts are far from guaranteed of their current bank ultimately offering them permanent work. "Banks are using contracting as a tool to help manage headcount and therefore won't transform a contract employee into a permanent one unless they proved to be high performing and valuable to the company," says Redshaw, from Randstad.
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