As ING Barings became the latest investment bank late last month to announce job losses in Asia, headhunters tried in vain to make sense of where Asia stood as far as hiring was concerned.
Many financial services search firms have been planning to expand into Asia, while still others have recently rushed into this market. Yet there was little consensus among them as to the state of the market in the short term.
ING laid off dozens of bankers in Asia, spread across a number of countries and a number of different products. A spokesman for the bank said it was 'internal fine-tuning to focus the appropriate resources on the most profitable areas of the business'.
But the previous month had seen several regional hires in Asia by international investment banks Lehman Brothers and BNP Paribas, both among a number of houses that are expanding their fixed income capabilities in Asia, including Japan.
On the other hand, in July Dresdner Kleinwort Wasserstein said it would cut around 1,500 jobs in a restructuring by its new owner Allianz, and the cuts were expected to fall most heavily in the bank's operations outside Europe and especially in Asia.
'The picture in terms of what banks are doing regarding their Asian operations is confused at best. Many are looking to cuts in Asia as a quick fix to their problems,' says one weary headhunter.
Those who have been looking at Asia in the long term are sanguine about their commitment. At Whitehead Mann Group, head of global financial services and deputy chief executive Philip Marsden has invested a considerable amount of time in exploring the opportunities that are available. He says: 'Asia is still a long way from being a third market. By that I mean Asia generally. Tokyo is of increasing importance to international banks, but it is hard to get established there.'
The first lesson is that Asia is far from being a homogeneous market for financial services search. Headhunters playing for the longer term are interested in establishing themselves for access to the markets in Tokyo and the People's Republic of China in particular. Hong Kong and Singapore are viewed as incredibly cyclical and as opportunistic markets.
But it is these markets that have recently attracted a spate of western search firms, via alliances and takeovers. Niche financial services headhunter Stephens International was raided for its Hong Kong staff from several fronts, but the victors were Alexander Mann Global Markets (AMGM), recently expanding in Asia.
Mike Brennan, managing director of AMGM Asia, and Marco Janes, the newly appointed partner in the Asian business in charge of research, now find themselves biding their time in what they admit is a tight market. However, Brennan says: 'When we came into this market we wanted to build critical mass. We have offices in Sydney, Melbourne and Canberra. We will have Tokyo and Singapore covered soon. The interesting thing about Australia is that it is a great sourcing ground for talent.'
Through the acquisition of locally well-regarded player O'Neill, financial services headhunter Whitney Group is also well placed in Asia.
The long-term players in this market have been the global search firms such as Korn/Ferry International, Heidrick & Struggles and Egon Zehnder. However, Korn/Ferry has just made cuts in Asia Pacific following cuts and restructuring in New York, and as a result of its retrenchment Sally Yapp and a four-strong team have left the financial services practice in Hong Kong.
At Egon Zehnder, Jackie Wong, who has been heading financial services in Hong Kong, is said to be on a temporary leave of absence.
Among the smaller professional players in the search market are a firm called Executive Access, widely recognised as the best established, as well as Whitney O'Neill, Baines Gwinner and the niche financial services headhunter Eban. Eban was recently the subject of a bid by TMP Search that collapsed at the 11th hour.
Baines Gwinner learned the hard way about the need to establish credibility by building up a name locally, rather than importing it from its offices in London or New York. Five years after first establishing an office in Hong Kong in 1994, the headhunter hired local David Hui to be managing director for Asia.
He says: 'The reality is that it is very hard to have global clients. This is a personality, individual-driven business out here.' Hui says Baines Gwinner had a 'phenomenal' year in Asia last year and expects this year to be similar. But, he says there is a real need for headhunters to show they can add value to the recruitment process.
Baines Gwinner has increasingly been providing competitive analysis for clients in a market where this service as not yet as commonplace among search firms as it is in London.
Eban's Stephen McAlinden, managing partner in Hong Kong, is widely credited as being a regional expert. He has been in Hong Kong for eight years and he says: 'Clients want to know you have an understanding of the business, the products and the markets - they don't want to pay while you learn.' It is essential to be able to negotiate the markets and have the appropriate in-house linguistic capabilities to operate successfully in Asia, he adds.
McAlinden also believes it is essential for credibility to be seen as being in the market to stay. He says: 'One has to be optimistic, because you only have to look to China. There is still a great need for structural change, but the opportunities are immense.'
Headhunters get enthused about the prospects of foreign direct investment and privatisations in China and ask whether they can afford not to have a toe-hold in this market. Events are likely to concentrate their minds - only two weeks ago (September 18) the People's Republic started the process of gaining domestic legislative approval for its entry commitments to the World Trade Organisation (WTO), following the approval of the accession package for Beijing's entry by the trade body's working party.
Those headhunters who are already well established in Asia have done very well out of existing markets in the region. Ranjan Marwah, whose firm Executive Access has offices in Hong Kong, Singapore, India, and a presence in Seoul, says 65% of his revenues for the past 10 years have come from a range of financial services search, with a dominance in investment banking and private equity.
The future may be unclear in investment banking in Asia, but as far as many headhunters are concerned, hiring in private banking, asset management/wealth management, portfolio management for local private equity firms and the odd hedge fund are good enough reasons to stay out there.