eFinancialCareers Guest comment

Paul Thoma, managing director of Investment Banking IT search firm Garthorne Associates on a lack of Asian IT talent is leading to jobs being transferred 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 weíve 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 realize 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 shot of front office project experience, and candidates who combine technical know-how with business experience. 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 1990ís, when the previously thriving Japanese economy was in decline (some would say meltdown), and the consequences meant the whole of Asia suffered. 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 in order to maintain their incomes and in many cases, keep their employment. These were worrying times for the Asian financial markets and combined with political instability, there was no end in site.

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 ñ 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 ñ 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 arenít around, in a global world those support functions will simply shift elsewhere.

Paul Thoma is the Managing Director and co-founder of Garthorne Associates, a city recruitment firm specializing in Investment Banking IT. Between 1997-00 he worked in Investment Banking for Salomon Smith Barney and laterally Morgan Stanley and from 2000-2005 he worked for city recruitment firm Partners Group, establishing and running their Financial IT division.