H1 2023: Hong Kong Financial Services Market Update

Off the back of two very busy years of hiring the HR market in Hong Kong is currently undergoing significant changes as firms adapt to evolving business landscapes and market demands.

Here are some key takeaways we have observed in the HR market over the last 6 to 12 months:

Sell-side slowing down, leading to layoffs

Investment Banking experienced a slowdown in hiring Q1 of 2023 primarily due to over-hiring in 2021 and 2022. As market conditions change and business operations adjust, firms are realizing that their existing workforce exceeds their current needs – most of the layoffs we have seen so far have been in the Talent Acquisition function both lateral & campus. Given how active these markets were in 2021 & 2022 a readjustment was somewhat expected. 

HR function growth in Buy-Side firms expanding into North Asia

In recent years, numerous US and European buy-side firms have established a strong foothold in North Asia & until recently were leaning on their headquarters for HR support. As a few of these have reached a critical mass they are now building regional HR resources for APAC, based in North Asia to manage their expanding operations. Not only does this facilitate better integration with the local workforce, but it also allows for effective recruitment and retention of talent amidst a very competitive market.

The growing importance of HR analytics

To enhance decision-making processes, strategic planning and operational HR, many firms have started to build out a HR analytics department to complement their existing HR function. The immense potential that data-driven insights have in guiding HR practices is becoming increasingly apparent and seen as a necessity in the function. We are seeing our clients investing heavily in professionals with expertise in HR analytics. 

Hiring struggles for top tier firms

It has always been the case that top tier financial services firms in the region find it difficult to hire globally mobile candidates. Hong Kong experienced very restrictive covid regulations, resulting in a sizeable exodus of financial services professionals last year. Some of these professionals were able to work remotely for an initial period but given the tax implications that was only a temporary solution. Although we are starting to see some talent return from other global markets it has been slow and what was already a relatively small pool of top tier candidates has become even smaller. Due to this we have seen some “out of the ordinary” increases to secure top talent. 

Business Partners are still in high demand

Strategic HRBP’s who have a deep understanding of the functions they support and can align HR strategies with that of the business are more in demand than ever. Our buy side clients are continuing to move towards a more “white glove” service by imbedding their business partners into the function they look after & decreasing their population size for them to gain a true understanding of capabilities and areas of improvement.

Back to basics

Clients are using this quieter market as a point of reflection and to focus in on their core/ back to basic HR processes. We have been assisting many of our clients with upskilling or improving their current HR processes by identifying the gaps in their HR function; particularly within HR Systems, Data Analytics and Payroll.

Wait and see approach to senior talent 

Overall we have noticed a slow down on the senior end of the market with clients taking more of a “wait and see” approach. Driven by geopolitical uncertainties, this is causing somewhat of a lack of confidence when adding senior staff to the payroll.

If you would like to discuss the market further, are looking for your next HR role in Financial Services or are hiring into your HR function you can get in touch with myself on LinkedIn or at gt@elliottscotthr.com