APAC Employment Monitor Q2 2015 Highlights:
- Job vacancies rose by 18% year-on-year in Q2 2015 compared to Q2 2014
- The number of professionals actively seeking employment remained mainly flat year-on-year: a small decrease of -2% from Q2 2014 to Q2 2015
- Job vacancies rose by 5% quarter-on-quarter from Q1 2015 to Q2 2015
- The number of professionals actively seeking employment was up 8% quarter-on-quarter from Q1 2015 to Q2 2015
The Q2 Asia Pacific Employment Monitor shows that the long-term trend in vacancies continues to outpace the growth in those seeking new employment. On a year-on-year basis, vacancies rose by 18% from 13,576 to 16,052. Those seeking new employment was relatively flat (-2%) year-on-year. The statistics indicate that there is still acceleration in the job market. On a quarterly basis, both vacancies and job seekers increased at a similar pace, 5% and 8% percent respectively.
“This long-term trend is positive for job seekers and it indicates that there is still a shortage of skills in the market” said Richie Holliday, Chief Operations Officer, Asia Pacific. “People with the necessary skills are now in a better position to negotiate improved compensation packages”.
Recent bonus packages have been good and, since job seeker numbers are stable, it appears that companies maybe doing more to retain staff and overall job satisfaction is at a comfortable level.
The second quarter showed a pickup in private wealth jobs in Singapore and Hong Kong, both important regional hubs for the sector, the Asian equivalent of private banking and wealth management centres in Europe such as Switzerland and Luxembourg. Due to their long established expertise and infrastructure, many wealthy individuals across Asia prefer to have their wealth managed from Singapore and Hong Kong.
“There is demand for private bankers and wealth managers,“ said Richie Holliday, Chief Operations Officer, Asia Pacific. “As a result of the regulatory tightening of compliance and Know Your Client (KYC) requirements, the added inflows have also increased demand for supporting roles in fund administration and compliance”.
The active M&A and corporate finance activity seen across Europe and the USA has not been as rapid in Asia, but it is having a residual knock-on effect. More and more deals are global in nature and therefore demand input from local expertise in the Asia region.
Another recent trend can be seen in IT-related roles, with the hiring of several individuals or teams in one go. “Many firms are realising that they are behind in IT security and are making the decision that they have to comprehensively renew and build these capabilities. This often requires multiple hires,” says Holliday.
Australia
The Australian economy showed a positive surprise, growing at a higher rate than expected. Official figures cited annual growth at 2.3%, beating the consensus estimate of 2.1%. Recently, the decline in the mining industry and the depressed prices of commodities had triggered fears of an economic collapse in Australia. The current figures, however, show that the Australian economy is proving to be resilient.
Despite the positive numbers, going forward, as we reported in our previous Q1 APAC Monitor, the Australian economy looks to remain sluggish as it adjusts to a post mining boom economy. There are, however, some positive signs for the financial sector: our statistics showed a good increase in job vacancies from Q1 to Q2, reflecting a returning confidence from employers.
While the overall economy has struggled, the housing boom has continued unabated, resulting in calls from the OECD to keep interest rate cuts in reserve. As property prices in some cities have grown by as much as 40% in the past few years, driven by low interest rates, tax breaks, shortage of housing and foreign investors, the OECD now fears the possibility of a “sharp correction”. Treasury secretary John Fraser went so far as to call the Sydney housing market an “unequivocal” bubble.
During the second quarter, Prime Minister Abbott revealed his second budget, which includes a $5.5billion package planned to help 2 million small business owners.
Singapore
After hitting a low in 2014, consumer confidence in Singapore continued to grow in the second quarter of 2015, suggesting that the trend may be strengthening. Confidence is believed to have been boosted thanks to a lowering of electricity tariffs and foreign domestic helper levies. A one-year tax rebate on road taxes is likely to have played a role in supporting consumer confidence.
A further indicator of growing consumer confidence and demand were reports that the city-state will grow to be the world’s eighth largest fuel importer within the next ten years. Currently in ninth place, if the growth in imports continues, Singapore is set to overtake Spain. Our statistics echo the positive news from Singapore, showing a 19% increase in vacancies over the previous year. “The year-on-year growth number are a real sign of confidence in the Singapore market,” said Holliday.
Japan
The Japanese economy is showing clear signs of strong improvement. Although the economy has had many false starts over the years, a slew of economic data in the second quarter has been positive: CPI and GDP figures all surprised on the upside. In April, Japan reported the best jobs availability for 23 years. Proof that the economic recovery is taking hold in Japan was further strengthened by official figures showing unemployment at its lowest levels for 18 years.
The Japanese prime minister, Shinzo Abe, appears to be betting on the fact that the recent acceleration in economic growth will continue. In June, Abe released a new three year plan, which excludes any major cuts in fiscal spending. Abe’s plan includes a softening on immigration requirements to potential employees with relevant language skills, which should open up opportunities for foreign IT-workers. The reforms offer incentives in the form of extra funding to universities that are able to implement reforms, with the aim of making Japanese universities more globally competitive.
Mainland China
As the second quarter came to a close, the Chinese equity market began showing sign of weakness, after shares on the Shanghai Stock Exchange peaked in mid June, the SSE Composite Index closed the quarter approximately 20% from its peak.
Despite the fall in stock prices, there was a strong upward trend in vacancies; 26% year-on-year and 29% quarter-on-quarter. “This is reflective of organisations’ desire to build talent pipelines,” said Holliday. The flow of new job seekers remained steady, hampered somewhat by regulatory issues and the demands of employers for multi-lingual staff, particularly those with the combination of fluent Mandarin and English.
Overall, economic reports from China in the second quarter of 2015 were mixed. In May, the Chinese service sector reported the fastest growth in three years. The headline HSBC/Markit Purchasing Managers' Index (PMI) for May was 53.5, up from 52.9 in April (figures above 50 represents growth). These positive news were offset by concerns from economists on the weakness of the Chinese manufacturing industry. "Overall, growth momentum appears relatively weak, weighed down by an ongoing deterioration in manufacturing operating conditions," said Annabel Fiddes, economist at Markit.
In contrast to the May service figures, trade talks between the USA and China on easing access to the Chinese market for foreign investors are facing headwinds with reports of concerns over Chinese regulatory plans that are seen as negative towards foreign investors. "This is the most difficult time I've seen in China for multinationals – and I've been here close to 30 years," said James McGregor, the chairman for U.S. public affairs consultancy APCO Worldwide in China.
Hong Kong
The economy in Hong Kong continues to struggle, GDP growth has been slow and retail growth has declined, exasperated by a decrease in visitors from the mainland. In light of Hong Kong’s economic woes, it is now being urged by the Beijing government to concentrate on its economy.
Should Hong Kong find solutions to its political challenges, the economy could well bounce back. According to the International Institute for Management Development Yearbook on Competitiveness, Hong Kong ranks as the world’s second most competitive economy, up from fourth place last year. Hong Kong is ranked highest in both government and business efficiency, improving from second and the third places last year respectively. "We welcome the IMD's high regard of Hong Kong as the world's second most competitive economy," said Financial Secretary John Tsang.“This once again affirms the importance of our steadfast fiscal discipline, robust financial system and favorable business environment."
Our statistics indicate that there is confidence amongst job seekers throughout recent events, with both year-on-year and quarter-on-quarter increases in those seeking new roles. As a result, additional opportunities have grown year-on-year to accommodate this fresh pool of talent. “Despite some of the recent events, it appears to be business as usual for Hong Kong as employers and job seekers remain focused on the job market,” said Richie Holliday.
Conclusion
Despite mixed economic data across the Asia Pacific region, the financial industry is proving resilient, with continuing growth in vacancies. It remains to be seen if the drop in Chinese equities continues and what effect, if any, it will have on the region in the third quarter. Employers are continuing to hire staff and many of the roles are long-term corporate infrastructure related, indicating confidence in the market for the near future.