HSBC faces hiring challenges from strong yuan
Global banking giant HSBC Holdings is increasingly challenged when it comes to recruiting and retaining talent in the nation's financial market as a strengthening yuan raises staff expenses.
In an effort to proceed with aggressive expansion plans, the group will hire 3,000 staff on the mainland this year to boost by more than 60 per cent its existing staff of 4,900. The target is above its earlier budget of adding 2,500 workers this year.
'The figure takes into account those hired for new positions as well as those replacing departing employees,' HSBC executive director Peter Wong Tung-shun said.
'Notably, the faster yuan appreciation means we have to hire people at much higher costs. Most of the new employees, however, lack hands-on experience.'
Market watchers forecast the yuan will appreciate by at least 10 per cent this year as the central government tries hard to tame inflation and cool an overheating economy.
The strengthening currency has increased staff expenses as salaries are paid in yuan. Many foreign companies on the mainland, therefore, were exploring alternative approaches to recruitment, said human resources experts.
'Companies with a global network may look for talent overseas to work in China instead,' said Jerry Chang, a director of international headhunter Barons. 'By reason of the exchange rate, expatriates working in China will be paid at a lower cost in yuan than in their home countries.'
He said the escalating scramble for talent would continue in the next five to 10 years, since Beijing last year granted foreign banks full access to the domestic retail market.
HSBC, Citigroup, Standard Chartered and Bank of East Asia all received approval in March last year to launch locally incorporated businesses. Since then, about 15 foreign banks have obtained licences.
According to Barons' estimate, the average salary of Chinese banking executives has surged 30 per cent annually in the past few years. A department head working in a foreign retail bank on the mainland may fetch a monthly salary of about 110,000 yuan, while a middle-level unit head may earn between 30,000 and 70,000 yuan per month.
'The pay scale has already caught up with counterparts in Hong Kong,' Mr Chang said.