Last year was a particularly tough one for a number of bank employees who have been forced to look for jobs outside of the banking sector, or outside of London if they wanted to remain in the same line of business.
While non-banking alternative employment opportunities have remained present in the City, this week Swiss bank UBS became the latest bank to highlight a well known trend in financial sector employment opportunities.
UBS has become the latest bank to announce that it is going to increase dramatically its banking staff in China in the coming years. The company’s CEO Sergio Ermotti has stated that the company plans to onboard more than 600 people over the next five years to boost its presence in China.
A couple of days later, the Chief Executive of Credit Suisse Tidjane Thiam reiterated the same theme, stating to Bloomberg that he remains positive on China despite the recent challenges that have shaken stock markets around the globe.
Cost Optimizations by Big Banks
The news comes after Credit Suisse announced in October last year that it was going to move 1,500 jobs outside of its Canary Wharf premises to areas that are less costly. This doesn’t necessarily mean that the company is moving away from London to outside of the U.K. Another major cost cutting trend is to relocate jobs into less expensive areas, especially when it comes to non-front office positions.
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All in all, London is unlikely to lose its dominance in financial sector employment opportunities in the near term, however some major risks are on the horizon. An exit of the United Kingdom from the European Union could actually heavily hit the City, due to an aftermath of uncertainty for the regulatory status of European banks which have substantial operations in the U.K.
If the U.K. chooses to break away, it might also choose to have its own regulatory framework for the financial industry, which will only make sense for London. While in the long run that may provide more opportunities, some short term pain for banks that have their EU operations in London could be around the corner.
Human Resources Challenges in the Far East
While some companies have committed to the move, few of them are actually able to find the necessary staff to fill the positions. As it turns out, employees in high level banking jobs are not eager to move much for the time being, especially when considering that the move could come with a lower net salary.
After the Wall Street Journal reported that Goldman Sachs is going to cut 10 per cent of its workforce in sales and fixed income, UBS Group AG’s plan for an unprecedented expansion in China is heating up the race for dominance in the world’s second largest economy.
Currently Goldman Sachs and UBS are the only foreign banks that are offering a full range of products in China. The companies have been at the forefront of the industry by signing some local joint ventures. According to the firms, the current market turmoil only opens a raft of new opportunities. Whether they will be able to find the right kind of talent in the region remains an open question.