Recruiting in China

HONG KONG -- Executive hiring by multinationals in Japan is set to reach a six-year high this quarter but a global credit squeeze will affect staffing plans at IT and finance firms in Hong Kong, according to a survey by recruitment firm Hudson.

The report was slightly less upbeat than a previous survey three months ago because hiring expectations in China and Singapore have dipped. Hudson said rising concern that the United States is heading for a recession would make banks and finance firms in the region more cautious about hiring.

Still, 66 percent of managers at multinationals in Japan expect to increase recruitment this quarter, according to the survey released on Thursday, up from 65 percent three months ago and the highest level since the Hudson report was launched in late 2001.

In China, 61 percent of managers at multinationals plan to increase headcount in the next three months, down just slightly from 64 percent in the previous quarter.

The survey by Chicago-based Hudson Highland Group Inc. covered responses from 2,500 managers at multinational companies across industry sectors in China, Hong Kong, Japan and Singapore.

"The market in Asia is still looking buoyant and it is quite separate from issues in the United States," said Gina McLellan, Hong Kong manager for the US firm.

"But from February to April we'll start to see the actual size of bonuses and whether recently announced global headcount cuts by some investment banks will come in Asia."

Asia's financial services sector is booming, helped by China's and India's rapid economic development, and international finance companies are expanding in the region.

JP Morgan says it could hire up to 1,900 people in Hong Kong in the next three years and Credit Suisse plans to hire at least 70 bankers in the Asia-Pacific this year.

However, there could be job losses too in financial centres Hong Kong, Singapore and Tokyo as investment banks including Citigroup, Lehman Brothers and UBS have announced plans to lay off thousands of staff worldwide in the wake of the credit squeeze, even though those cuts are likely to focus on the United States and Europe.

In Hong Kong, 58 percent of managers surveyed plan to add staff this quarter, up from 54 percent three months ago, but nearly a third of IT&T companies and 23 percent in finance and banking say the global credit squeeze triggered by problems in the US subprime mortgage sector would have an impact on hiring.

In Japan, 12 percent of managers across sectors say hiring plans will be affected by the credit squeeze compared with less than 10 percent in Singapore and China.

"Hiring expectations remain at a high level in all the markets surveyed and the outlook is positive," McLellan said. "But employers are caught between sharply rising salaries and bonuses on one hand and high staff turnover rates on the other. This is most marked in China."

The survey showed a third of managers in China expect to increase managers' starting salaries by more than 20 percent to attract candidates and 47 percent reported turnover rates above 10 percent.

In Singapore and Hong Kong, 19 to 20 percent of managers said they had to offer pay increases of more than 20 percent but in Japan only 4.0 percent of managers saw such a need.