With the economic picture looking increasingly uncertain, local lenders appear to be less inclined to hire on a permanent basis, with many now offering contract assignments as a safe alternative. But while such arrangements are common elsewhere in the world (called ‘temping’ in Europe, where it is very popular), Hong Kong’s employment market, it seems, has yet to fully embrace the practice, despite its benefits.
On the employer’s side, the main advantage relates to the ability to manage salary expenditures more efficiently by recruiting only the talent that’s needed, when it’s needed.
For candidates, short-term assignments tend to provide greater flexibility and possibly even more exposure to different business areas, albeit at the expense of the “iron rice bowl”.
Emma Charnock, regional director of Hays in Hong Kong and China, notes that since the global financial crisis, the contract market – despite accounting only for a small portion of employment – has “developed significantly”, both from the perspectives of employees and employers.
“We are seeing a big push for long-term contractors, driven by concern over financial markets overseas,” she says. “Demand is coming from a number of areas from across the banking business.”
In many cases, contract workers are more experienced and skilled in their line of work and more often than not are asked to work for longer periods than first anticipated, Charnock says.
“This means the organisation secures these skills over a longer period of time, and in a more cost-effective way,” she explains.
Sommer Owens, Hong Kong’s manager for contracts at Robert Walters, has noticed a similar trend. “Before the financial crisis, there was little in the way of contract hiring in Hong Kong,” she says. “At the moment, banks using contact hiring are aiming to have 20 to 30 per cent of staff on contract assignments.”
Among other factors driving employers towards contract appointments, Owens also cites the ability to shorten the recruitment process. “Typically, hiring for a permanent role involves five or six interviews, whereas contract appointments can be wrapped up in just two.”
Most importantly, notes Owens, contract hiring provides banks with the ability to quickly scale up or scale down headcount, as required, while also allowing them to retain a positive employment image.
“There is little likelihood of a bank attracting press attention if they let several contract workers go in the same way they would if they laid off permanent staff,” she says.
On the downside, Owens notes that the pool for short-term candidates in Hong Kong and the rest of Asia tends to be quite small.
Steve Parkes, an associate director with Michael Page, echoes this concern. “There are few attractions involved with contract work in Hong Kong, because premiums and bonuses are rarely paid, unlike in Britain and Down Under, in Australia.”
Also on the downside, Parkes says that line managers, particularly those in the banking IT space, often complain that “it takes too long to bring contractors up to speed, and to familiarise them with operating procedures.”
Nevertheless, given the current business conditions, opportunities for short-term engagements will likely continue to grow. According to Owens, Australian banks looking to expand their presence in Hong Kong will likely account for a large portion of contract hiring.
She says that, among local lenders, Hang Seng Bank tends to take the temping lead in terms of project-oriented roles.
The Royal Bank of Scotland, UBS, and Deutsche Bank have also increased their use of short-term staff, Owen adds.
As for mainland-based institutions, Owens indicates that most tend to prefer permanent hires, at least for their Hong Kong branches. But this, too, may change soon.
“As the market matures, Hong Kong is likely to become more like Britain and North America, where contractors are regarded as the industry experts due to their project experience,” she says.
According to Owen, the areas where contract staff are in most demand include compliance, client on-boarding, and middle- to back-office operations – in particular, support functions within equities, such as cash and derivatives.
Fixed-income business, she adds, is also an emerging source for short-term opportunities, while general support teams – IT, marketing and human resources – continue to hire aggressively for “temps”, in keeping with what has traditionally been the case.