Guest comment: Asian skills shortages are forcing projects back home

Paul Thoma, managing director of investment banking IT search firm Garthorne Associates, says a lack of Asian IT talent means jobs are moving back to London.

In the last two years our clients and most top-tier investment banks have looked to re-establish and increase business and IT operations in all the main Asian financial centres (Hong Kong, Tokyo, Singapore, Sydney). With new markets opening in China and India, offices have had to be built up quicker and bigger than before.

As markets grow and profits increase, so generally does recruitment. This is exactly what we've seen over the past two years, with enormous levels of business growth and appetites for complex financial products being replicated by the need to recruit.

But as recruitment has gathered pace, employers are beginning to realise that while they may want to base strategic projects in the region, they will struggle to find enough skilled hires to meet the workload. In particular, the Asian markets are very short of front-office project experience and candidates who combine technical know-how with business experience are sought after. Development skills such as JAVA, C++ and Excel are also scarce. No amount of smart and enthusiastic graduates can fill these gaps.

Asian crisis set the scene

To get a proper insight into the problem, we must go back to the late 1990s, when the previously thriving Japanese economy was in decline (some would say meltdown), and the whole of Asia was suffering the consequences. Financial services companies were not generating huge - if any - profits, and most of the investment banks were downsizing and even terminating operations.

At this time, a lot of expats and Asian nationals decided to move to the European or North American markets to maintain their incomes and, in many cases, keep their employment. These were worrying times for the Asian financial markets and, against a background of political instability, there was no end in sight.

However, around 2004 the Japanese markets began to regain some of their previous glory and companies began to claw their way back into profits. This coincided with considerable progress for the Chinese and Indian economies as they began to flex their new world muscles.

Hong Kong falling short

This time, Hong Kong has proven the focal financial centre for the region. This is thanks to its geographic location, its already cosmopolitan population, but most importantly, to its national link with China - which was far less significant in the previous Asian boom.

But it's in Hong Kong that the shortage of skilled IT staff is particularly acute. An ex-colleague of mine, now working in Hong Kong, reports that positions in cash equities and derivatives technology are going unfilled for months on end. Faced with this shortage, banks are doing the obvious thing - re-allocating critical projects to London and New York.

The lesson is clear: when the front office ramps up, it needs support from skilled, business-savvy technologists who can understand needs and deliver to requirements, quickly and effectively. When these people aren't around, in a global world those support functions will simply shift elsewhere.

Paul Thoma is managing director and co-founder of Garthorne Associates, a city recruitment firm specialising in investment banking IT. Between 1997 and 2000 he worked in investment banking for Salomon Smith Barney and latterly Morgan Stanley, and from 2000 to 2005 he worked for city recruitment firm Partners Group, establishing and running their financial IT division.