In the second of a two-part report, delegates on the recent eFinancialCareers recruitment roundtable in Hong Kong discuss the topical issues of recruitment agencies, referrals and contractors. If you haven't read part I, click here.

The roundtable was attended by attended by 16 senior HR professionals from major international financial institutions. Attendees asked not to be named in this article.

In the immediate aftermath of the financial crisis, HR teams at financial services firms (especially the global banks) came under increasing pressure to reduce their use of expensive recruitment agencies and to manage more of their own hiring.

But although boosting direct sourcing is still an objective for some banks, many are already feeling the strain as vacancy levels pick up. External recruiters, it seems, are making a rapid comeback.

One roundtable delegate commented: “The tipping point for going back to agencies is now, or at least very soon. Direct recruitment stretches resources. It’s not just the initial interview that takes time, it’s managing the whole selection process.”

For some banks, the job function helps determine whether or not they outsource their hiring. “In treasury and securities, we’re doing it ourselves. But in private banking we do need agencies. RMs often have long-stranding relationships with headhunters throughout their careers, so it’s hard to move them without dealing with their recruiter.”

We need recruiters, but…

Although firms in Hong Kong need to raise their reliance on recruiters, they remain worried about whether they will receive a good service in return.

Since the start of the financial crisis, recruitment firms have chopped and changed their consultants in response to declining revenues, so HR professionals have found themselves dealing with different people from month to month, making it difficult to develop worthwhile relationships.

Another headache for HR is the tendency for consultants to spam too many CVs. “We often get multiple calls from different people at the same agency. The quality of recruiters has depreciated and so has their reputation. They are shooting from all angles, sending us too many candidates,” bemoaned one roundtable attendee.

High-level search firms, however, generally enjoy more solid relationships with banks than their mass-market counterparts in Hong Kong. “We see more value in them. Boutique firms are more attentive to your needs and will consider changing their fees.”

The rise of referrals

The ultimate inexpensive hiring solution is of course the internal referral. While it wasn’t very PC for banks to promote these programmes at the height of the retrenchment season six months ago, they are now seen as an important staffing solution.

Internal communication and marketing efforts have increased (but cash rewards have largely stayed the same), in order to make employees more aware that recruitment is back on the cards.

But while HK banks are busy with referrals, asset management firms don’t usually run formal schemes because their hiring is on a smaller scale and suggesting potential recruits is seen as part of your job.

The challenge with contractors

Some firms are trying to expand their internal referrals to cover contractor roles because these vacancies are proving difficult to fill.

Financial institutions currently need people to take on fixed-term, project-based work, but there is a shortage of career contractors in Hong Kong, so candidates tend to accept these jobs out of desperation.

“The mindset is slowly changing, but contracting is seen as a stop-gap. Some even need a completion bonus to stop them jumping ship, if they find permanent work. There’s still a stigma attached and people don’t like it on their CVs. If you want specialist skills, it’s very hard to find them.”