Expatriate bankers in Hong Kong have been badly affected by the layoffs currently sweeping the city’s finance sector.
And they now face a race to find new roles before Hong Kong’s high living costs force them to return home.
“They’ve been job cuts here before, but this year expats are proportionally more affected by them than they were during the financial crisis,” says John Mullally, director of financial services at recruitment agency Robert Walters in Hong Kong. “The need for Chinese language skills and networks is greater now, which puts expats at increased risk.”
While Goldman Sachs and Bank of America have cut jobs in Hong Kong only recently, layoffs have been taking place throughout the year at other firms. Barclays, for example, culled equities roles back in January.
Some foreign banking professionals have therefore already spent several months job searching in Hong Kong and have called time on their stint in the territory.
“There’s been a rise in expat bankers leaving Hong Kong over the last four to six months in particular,” says former Jefferies trader Warwick Pearmund, now an associate director at Harvey Nash Executive Search in Hong Kong.
“We’ve definitely seen more expats making the move home over the past six months,” adds ex-BNP Paribas quant Laurence Fauchon, who now runs a website, HelperChoice, which helps expat families find domestic workers.
The battle to stay in Hong Kong
Meanwhile, expat bankers who’ve lost their jobs more recently are typically trying hard to remain in Hong Kong.
“There’s a great deal of uncertainty in Europe, particularly in the UK after Brexit, which means many expats don’t want to move,” says Fauchon. “Hong Kong is still an attractive business destination and place to live.”
Overseas bankers usually give themselves about six months to find new work, according to a British expat in Hong Kong.
“It boils down to personal circumstances, but I’ve seen people setting deadlines at the outset of their job search to find a new role in Asia – Singapore as well as Hong Kong – or repatriate,” says Pearmund from Harvey Nash.
Hong Kong’s high cost of living – Mercer ranks it as the most expensive city in the world for expats – means many bankers can’t afford a long period without work.
“While the work visa process is pretty simple in Hong Kong, high rental costs create a hard timeline for a lot of people,” says a second expat finance professional.
“Expats are often here to benefit from the low tax/high salary environment, but this relies on actually having an income,” he adds. “So some people are choosing to leave to prevent the money they’ve saved up being quickly eroded by paying rent.”
Some laid-off foreign bankers are trying to reduce their expenses in Hong Kong in order to prolong their job search.
“They are downsizing and moving into more affordable homes,” says Fauchon. “While rental costs are high, people are prepared to stay in Hong Kong if they can.”
Expats are well advised to pare back – joining the local workforce again is both difficult and time consuming.
“For expats, this downturn is bad because it’s so much longer than previous cycles,” says Damian Babis, managing director of recruiters Capital People in Hong Kong.
“The long lead time to get a new role and the lack of vacancies are increasing the pressure on expats,” he adds. “The job market is slow, quiet and shrinking. Overall banking headcounts in Hong Kong continue to decrease and the only hiring growth is for Mandarin speakers.”
As opportunities in banking dry up, redundant expats are increasingly turning their attention to fintech in the hope of staying on in Hong Kong.
“More and more bankers, like myself, are making the switch into tech – and Hong Kong is a great place to be given its positioning as both a finance and tech hub,” says Fauchon from HelperChoice.
“I’m now getting numerous messages every week from expat bankers who want to explore opportunities in fintech,” adds Henri Arslanian, a former UBS director who now teaches a fintech course at the University of Hong Kong.
Image credit: Owen Price, Getty