‘Banks still hiring’

by **Cals** Fri 09 Oct 2015, 00:06

‘Banks still hiring’

By Yimie Yong / The Edge Financial Daily | October 8, 2015 : 10:07 AM MYT

KUALA LUMPUR: Despite slower economic growth and uncertainties ahead, banks are still looking to hire, especially in the private and digital banking segments, according to Towers Watson.

[size=16]Towers Watson (Malaysia) Sdn Bhd global data services practice leader Sulaxmi Prasad said there is still demand for jobs in the banking sector, even though some of the local banking groups are retrenching or offering separation schemes.

“Hiring will slow down because of the negative economic outlook, but it will not stop,” she told The Edge Financial Daily after the Towers Watson’s Financial Services Club meeting yesterday.

“The attrition rate in the financial services industry in Malaysia remains high at 12.5% in 2015, although it has dropped from 14% in 2014,” she said, referring to findings from the Towers Watson 2015 Financial Services Total Rewards Survey.

According to the survey, the attrition rate for banking dropped from 16% to 11.5%, while asset management fell from 16.2% to 11.6%. The insurance subsector, on the other hand, saw an increase in attrition rate from 12.8% to 13.5%.

The key reasons for attrition were better career or growth opportunities and higher pay.

With the rise of digital banking and information technology, Sulaxmi said IT roles would be very much in demand.

She added that sales and marketing, and customer service jobs were also in demand, due to the higher turnover rate.

Other hot jobs in the financial services industry include jobs in actuarial, risk management, compliance and private banking.

Due to strong market demand and the effects of brain drain, employees in actuarial, investment and risk management are among the most difficult to retain.

However, Sulaxmi noted there was less hiring in investment banks, as the capital market had weakened due to multiple factors such as negative economic outlook, lower oil prices and currency depreciation, but the rise in the number of positions still kept pace with previous years’.

CIMB Group Holdings Bhd ([You must be registered and logged in to see this image.] Valuation: 1.65, Fundamental: 1.05), which completed its mutual separation scheme in July, saw the rationalisation of 11.1% of its workforce.

RHB Capital Bhd ([You must be registered and logged in to see this image.] Valuation: 1.65, Fundamental: 1.40) announced early last month that the banking group was offering a separation scheme, Career Transition Scheme (CTS), to improve its productivity and optimise manpower.

Meanwhile Towers Watson consultant and financial services industry leader Simon Tan said he expects cost-cutting measures involving the reduction in compensation and benefits such as promotional increase and bonuses, to continue in 2016.

Compensation and benefit (C&B) expenses may shrink or remain flattish next year, he said.

“With the current economic outlook, there is a slowdown in the financial services industry. A lot of companies will try to maintain their profit margin,” he said, adding that reducing C&B expenses is one of the cost-cutting measures.

Although some organisations are retrenching, he opined that most companies in Malaysia are employee-centric and would opt for cutting training and development costs or other fixed costs instead of retrenchment.

Meanwhile, according to the Towers Watson 2015 Financial Services Total Rewards Survey, the overall salary increase in the local financial services industry in 2016 is projected to grow to 5.6%, compared with 5.3% in 2015.

Sulaxmi said the increase is similar to the year before as there is a slowdown in the overall financial services industry.

Among all the subsectors, the insurance sector, driven by aggressive growth and high demand witnessed a salary increase of 6.1%, with the 2016 increment projected at 6.5%.

Meanwhile, the talent war in the financial services industry remains competitive in 2015 and hiring is expected to intensify.

According to the survey, entry level salaries for new graduates remain at between RM2,500 and RM3,000 per month and entry salaries for MBA holders start from RM2,800 to RM3,000.

The Towers Watson 2015 Financial Services Total Rewards Survey is the largest compensation-focused survey covering the Malaysian financial services industry.

This year, Towers Watson surveyed 131 companies with more than 110,000 incumbents from 50 banking firms, 42 insurance firms, 26 asset management firms and 13 other financial services firms.
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