The turmoil in global financial markets is causing many asset managers and banks in Asia to rethink hiring plans, recruitment executives have noted. However, optimism about the outlook for Asia remains strong.

A number of investment banks and fund management firms have already pulled down the shutters on hiring this year, but many of those still recruiting -- mainly large firms with annual hiring needs -- are now pausing for reflection, says one Hong Kong-based recruiter.

While hires are unlikely to fall through altogether, they are being postponed, he adds.  “Clients are looking at their budgets and asking themselves: ‘With the markets tanking daily, is this really a critical hire?’”

He suggests their hesitancy stems from the debt crisis in Europe more than anything else. “But once all the problems in Europe die down, I think Asia will rebound strongly,” he adds.

Another Hong Kong-based search executive tells AsianInvestor that asset managers, investment banks and private banks have been nervy since the start of the year. “There’s been a lot of back and forth and more pulling out of deals than usual,” he affirms.

“We’ve seen a few cancelled mandates because clients have been worried about investing [in new hires],” he says, adding that some are withdrawing even after signing deals.

Asian, European and US firms are all affected. And in terms of business areas, he notes that support-type roles will be subject to review, whereas revenue-generating roles will not.

A number of banks are now following the Goldman Sachs model of regularly cutting the bottom 10% of staff in performance terms, says another recruiter who asked not to be named. “It's a convenient way of explaining why you are firing people when you are hiring people into other critical areas, which is normally a difficult thing to do.”

Other search execs are upbeat on asset management recruitment. Jeremy Harris, managing partner of Wellesley Partners in Hong Kong, says there has been significant movement among portfolio managers in the past six months, with ongoing hiring in sales and marketing.

Emerging markets and fixed income have been growth areas among asset managers, he adds, and he expects this will continue.

“A year ago, as the industry view on asset management in Asia was changing, it was clear there would be a renaissance in the hiring of portfolio managers, and that is now very much under way,” he says.

Managers are realising that unless they are happy marketing a niche offshore product into Asia, they can no longer afford to have just a couple of marketers based in the region to raise assets, Harris adds.

He suggests one of the next areas to experience a pick-up in hiring will be product specialists: “As people find it harder to get investment staff on the ground here of the quality and track record they want, the next best thing [after portfolio managers] is to have high-quality product specialists, people who can talk well and credibly on behalf of asset managers located in the US or Europe.”

Everyone is looking at their books given what is going on in the market, notes Harris, but hiring in asset management in Asia will be less affected than other markets unless there is a significant global contagion.