GTR and Healy Hunt Partners’ first annual salary survey has revealed that many banks and other industry players are expanding their trade finance teams, offering competitive salaries, and creating new opportunities for those looking for their next move.
Trade finance seems to have swung back into favour within certain financial institutions, with many planning to increase their teams over the next 12 months, according to the results of GTR and Healy Hunt Partners’ first annual salary survey.
Gathering feedback from trade finance hubs such as London and Singapore, as well as more unusual locations including Zimbabwe, Stockholm and Jakarta, the survey collates an array of responses from bankers, corporates and insurers to questions on salary levels, bonus structures and hiring trends.
An overriding theme suggests that certain institutions are in expansion-mode, perhaps reflecting the trend for banks to move away from the previously popular and more complex collaterised debt-type facilities, towards more secure, short-term transactional banking business such as trade finance.
GTR has reported on extensive recruitment drives in recent months. JP Morgan’s trade finance division (see GTR July-August), and Australian banks such as National Australia Bank (NAB) and ANZ, have been growing their teams. Barclays is another that has made new appointments to its cash and trade team.
The hiring trend not only applies to the banking industry, but also to the insurance market, with insurers (both trade credit and political risk) entering recovery-mode after a painful 2009 marred by rising insolvencies.
New trade credit insurance players such as Markell have entered the market and have made hires this year. Similarly, established players such as Atradius have also announced new appointments.
Indeed, almost 50% of all respondents said that they envisaged that their team would increase in size over the next 12 months.
“Market sentiment has clearly picked up over the past 12 months or so, and many of our clients are in the process of rebuilding their businesses,” observes Paul Hunt, managing director of Healy Hunt Partners.
To attract the best talent, salaries in trade finance are looking increasingly competitive, especially for those with 10-15 years-plus experience.
In comparison, bonuses are not necessarily increasing in line with salaries, with most staying constant or shrinking in proportion to base salaries.
This is no doubt reflective of the political pressure to reduce the bonus culture in banks. Indeed, over 60% of those surveyed reported a lower bonus culture in their institution. It should be noted that bonuses in trade finance are still far behind those achieved in investment banking and dealing rooms.
Others believe the gulf between bonuses paid to those in trade finance and those given to investment bankers is too vast, with some responding that they never or rarely lose money and work hard to cross-sell on each deal they do, yet don’t earn the bonuses other bankers receive.
One survey respondent remarks: “The industry needs to get a way of driving performance without pegging it on the bonus – as it is the bonus that had a key role in the global credit crunch. The question is how would they do it?”
One way institutions are adapting to this trend is by rolling bonuses into the base salary, leading to salary inflation.
Paul Hunt at Healy Hunt Partners has noticed this distinct shift in the market: “Compensation, particularly within the banking sector, is under intense scrutiny with a number of banks ‘market adjusting’ basic salaries, which have been doubled in some cases. It will take a further six to nine months for the market to fully adjust to regulatory pressures and sensitivity surrounding the bonus piece.”
The survey also asked whether bonuses met with respondents’ expectations, and the responses were pretty evenly split, with 46% replying positively, and 54% reporting their bonuses were below expectations. Those replying positively may well be those who have seen significant hikes in their base salary.
Those working in commodity finance tended to be the most disappointed with their bonuses, with those in credit and political risk insurance the most satisfied.
Others have complained that some institutions are taking advantage of the current market situation to pay bonuses far below usual expectations.
Another common grievance is that the bonuses paid out by some institutions do not reflect the performance of the department or individual, nor are they in line with market benchmarks.
Breaking salaries down into the various arms of the trade finance market, those working in structured trade finance reported the highest salaries, as much as 10% above the average, and they enjoyed larger bonus ranges.
In contrast, those who said they worked in trade and supply chain finance were generally paid 10% below the average. Yet, these differentials in salary are perhaps lower than expected, with salaries in the more highly structured end of the market usually proving more lucrative.
It should also be noted that differences between back office and front office or origination role salaries are usually fairly wide, and that two-thirds of the survey respondents reported that they worked in front-office positions.
Regionally speaking, salaries in the UK and Europe were very similar, although salaries in Scandinavia tended to be at the higher end of the scale.
Salary ranges submitted by those working in North America tended to be among the highest for the more experienced professionals, although bonuses varied greatly, and were in some cases unexpectedly lower than those in Europe.
Salaries and bonuses in Asia were by far the highest, and the survey suggests that optimism about potential market growth of this region continues to soar.
As one survey respondent commented: “In Asia, you are seeing a load of opportunities for movement within the trade finance arena, whether from corporates to banks, corporates to corporates, etc.
“Hence, we are expecting a general increase in pay for the whole trade finance industry in Asia.”
However, salary results for Asia are somewhat skewed by the lucrative expat packages on offer.
Hunt at Healy Hunt Partners also notes: “Asian markets are soaring, but let’s not forget India where the market will experience exponential growth over the short to medium term.”
In terms of hiring trends, it is the origination teams that seem to be the most ambitious in terms of growth, with over 50% of those in front-line roles seeing a hiring increase, while 33% of those in back-office positions are anticipating further cuts.
The survey results suggest that teams active in trade and supply chain financing and commodity financing are the most likely to be hiring in the near future.
Asia is once again the most optimistic market in terms of growth, with 100% of respondents in Asia reporting that they expect their teams to increase over the next year. This stands in stark contrast to 20% of respondents working in Europe who predict decreases in their team size.
However in the US, only 5% envisage cuts to their teams in the next 12 months.
Globally, one third of respondents said they would like to change jobs over the next 12 months. Indeed, only one in five said they had absolutely no plans to look for a new position, and the remainder would switch jobs if the perfect role came along.
Such feedback suggests that the job market is beginning to become more active after it stagnated at the height of the crisis, with those who hadn’t lost their jobs keen to hold on to them.
When weighing up the pros and cons of moving jobs, it seems how much one is paid is still the top priority, with over 50% of respondents citing salary level as one of their top three deciding factors.
Respondents also cited the need to have a good team atmosphere and work/life balance.
Many of those surveyed also said that the status of trade finance within the organisation, job title and opportunities for career progression were important factors to consider. Yet, perhaps in contrast to pre-crisis attitudes, the status and size of the actual employer was not deemed as a decisive factor.
Such a change in attitude might reflect the fact that the reputations of some of the top banking names have been much-maligned since the crisis hit. Bankers are no longer after the prestige of working for certain large firms, and would perhaps prefer the competitive salaries, benefits and potentially flexible working hours offered by some of the second-tier names.
With this in mind, many might be looking at the lesser-known Asian institutions as a possible destination for their next important move.
Hunt observes: “The candidate population has experienced unprecedented turmoil in today’s market. Candidates are now demonstrating flexibility in their choice of employer. Tier two names are more in demand due to more balanced working conditions.
“Work/life balance tends to be upmost in people’s minds these days.”
For more details on the salary survey or for trade finance recruitment enquiries contact Paul Hunt + 44 (0) 20 7496 8977 or Stephen Dodd + 44 (0) 20 7496 8979 or email firstname.lastname@example.org GTR
What is your ideal pay package?
In an ideal world, what would you like your pay package to be? Would you like a higher base salary – or do you prefer the rush of securing that annual chunky bonus?
According to the survey results, most were surprisingly conservative, with few wanting bonuses that heavily outweighed their base salaries.
The average respondent wanted their base salary to take up half their total package, with their bonus accounting for approximately 40%.
Those working in structured trade finance and commodity finance were the most ambitious in terms of what they’d like their pay to include, whereas those in cash management tended to opt for an ideal bonus of 25% of their basic salary.
As might be expected, bonus culture is far less prominent in mainland Europe than it is in the UK or North America.
While one in four respondents based in the UK or America nominated a 100% bonus, 17% of all Europeans said that a bonus of less than 10% was acceptable.
Do you need to have a degree?
Do you really need a university degree to succeed in trade finance? Traditionally, senior bankers would hark back to “the good old days” when you’d work your way up from tea boy (or girl) to head of a department, clutching no more than a few school qualifications.
Yet, in today’s climate, the survey suggests that having a degree at the very least, if not an MBA, seems to be the prequisite for career success.
Indeed, even those with 10-years experience or more tend to have some form of further education, with 50% of this group reporting that they had attained a second degree qualification of some kind. Over 70% of respondents in Europe had a second degree or masters.
However, it is the London market that continues to buck this trend, with the UK having the highest proportion of those who worked their way up from school, armed with minimal formal qualifications.
But, having found a job, few in the market voiced strong desires to gain further qualifications. Those in the UK and Europe were far less likely to achieve further qualifications, with almost 80% in the UK and 72% in Europe having no plans at all.
However, in North America, 40% planned to seek further education, with industry qualifications such as ACCA or CFA much more popular than further university education.
Paul Hunt, managing director at Healy Hunt Partners, has observed the improving calibre of qualifications in the market, but notes that good grades won’t guarantee success. “Today’s candidates are generally highly qualified – linguistics are the key differentiators,” he says.
But, he notes: “Cultural compatibility is critical – candidates will fail to progress at interview if there are question marks – irrespective of education.”
GTR and Healy Hunt join forces
GTR partnered up with Healy Hunt Partners recruitment services earlier this year, with the aim of combining knowledge, expertise, and contacts of both companies to help financial institutions make the best recruitment decisions.
Healy Hunt Partners’ trade finance practice encompasses a range of key segments including structured trade finance, trade and supply chain finance, commodity finance, export finance, credit insurance and political risk, cash management and syndicated finance.
The firm’s main focus is at the mid to senior level, namely senior associates through to managing directors/team heads where they have a demonstrable track record of placements across Emea, while expanding increasingly into other geographic areas including the Asia Pacific. Learn more about Healy Hunt Partners at www.healyhunt.com.