As the brain drain in Hong Kong continues, chief investment officers (CIOs) have had to work harder to retain talent by providing a supportive working environment and being proactive with people management.
“If the pool of actuaries and investment professions in Hong Kong shrinks as some expats go back to their home countries, and the overseas and China onshore professionals have become less mobile due to Covid, it becomes more difficult for everyone to hire and retain talents,” Richard Chan, the AXA Hong Kong CIO and Asia head of asset-liability management (ALM), told AsianInvestor.
Chan’s team has grown by over 50% since he joined AXA in 2018, and his team of 14 investment professionals including himself, responsible for $25 billion of assets as of the end of March, survived most of the pandemic without losing staff.
But several members left in late 2021 for more senior roles at other insurers or asset management firms both within and outside of Hong Kong.
Hong Kong has been facing a brain drain in the insurance as well as broader financial industry. A survey by the Hong Kong Financial Services Development found that recruiting qualified candidates from overseas had become increasingly difficult.
Additionally, 30% of international insurers in Hong Kong have said that they are relocating their global and regional teams and 80% of all insurers are experiencing high turnover, including in their actuary and finance departments, according to a recent survey from the Hong Kong Federation of Insurers.
Industry insiders have cited stringent Covid-19 restrictions and the territory’s sweeping National Security Law as reasons for their colleagues leaving Hong Kong and difficulties in attracting talent from overseas. The city lost 93,000 residents in 2020, followed by another 23,000 in 2021.
As most of the world’s developed markets have lifted Covid travel restrictions, Hong Kong still requires overseas arrivals to undergo seven days of quarantine in a hotel room that must be booked months in advance. Under mainland China's Covid-zero policy, visitors from Hong Kong and overseas face at least 14 days of isolation in a hotel.
But Chan believes it’s not all about Covid restrictions. Accounting standard changes like Hong Kong’s new risk-based capital regime (RBC) and IFRS17 for insurers also increase the demand for actuaries and other financial talents, he noted.
To avoid brain drain within the team, Chan said he makes use of AXA Group’s advantages as an international company and lays out a clear career roadmap for his members within the organisation.
“I try to be a more flexible leader to be more decentralised in terms of the day-to-day work and decision-making process. We hire people who are serious about their careers. Naturally, they will want to have more authority, and want to be the ones who come up with new ideas,” he said.
“By having a more decentralised team, the members will be more engaged,” Chan added, noting that some of AXA’s sophisticated hedging programs were initiated by middle-level staff rather than top-down.
He will also ensure regular one-on-one meetings with team members about medium- to long-term career goals, as well as personal life, so that everyone gets the attention they need.
On the teammates that he lost in recent months, he said: "This is in a way a good sign as it means that other insurers and asset management firms recognise the good quality and training of my team."
Agreeing with Chan, another Hong Kong-based CIO of an international life insurer said the increasing emphasis on environmental, social and governance (ESG) and responsible investment also makes it challenging to manage the investment team to make sure the right people are doing the right things.
Although the total working hours and workload are kept healthy, the portion of time spent on ESG-related work has significantly increased since Covid started, they said, noting that they always advocate a good work-life balance within the team.
As a parent of young kids, the CIO told AsianInvestor that it was important to communicate to the team that quality time with the family after hours is supported by the management.
To achieve this, timely and sufficient communication is necessary, which includes communication within the investment team, with the global office and across other relevant departments in the organisation.