As our working lives in APAC continue to evolve, we invite you to participate in our 2019 Working in Asia Pacific survey. Building on the success of our previous annual surveys with the Roffey Park Institute, this year we have joined forces with The Next Step to expand our research to include Australia. Our research aims to enable you to thrive in this ever-changing environment, covering topical questions around leadership, diversity, mental health and artificial intelligence, amongst others. For each fully completed survey, we will make a donation to a mental health charity to help foster improved mental wellbeing in workplaces and our workforce. To support this cause and complete the survey, please click here. Click here to take the survey. All responses will be strictly confidential. Respondents will be given a complimentary copy of the final report in mid-2019. Thank you for your participation and we look forward to sharing the report with you.

This article first appeared in the December 2018 edition of Human Resources, the official journal of the Hong Kong Institute of Human Resource Management. ​ With Hong Kong's workforce showing high levels of depression and anxiety – 2.5 times above the global average, the city's frenetic work culture is a key culprit, impacting both the mental well-being of workers and their productivity. In spite of support groups calling for greater awareness to help sufferers, a competitive culture, strong stigma and a lack of understanding among employers mean that mental health issues are largely overlooked in Hong Kong. Mental health is a sensitive topic globally and particularly so across many cultures in Asia. There are often taboos associated with openly mentioning the topic of mental health, which in turn leads to the lack of discussion and initiatives around mental well-being in the workplace. In Hong Kong, a quarter of the workforce show levels of depression and anxiety – 2.5 times above the global average – according to a 2015 survey jointly conducted by the Hong Kong Occupational Safety and Health Council and the Whole Person Education Foundation. Workplace stress is a huge contributor to poor mental health. Collating data from a survey of more than 2,000 respondents in Asia, part of the 2018 Profile Search & Selection and The Roffey Park Institute "Working in Asia" survey found that a heavy workload and a lack of support are both major contributors to mental health issues. Stress at work has been linked to a drop in productivity, an increase in absenteeism, and even in presenteeism – a condition where employees work when they are ill or work longer hours than necessary, but not performing as well as they should be when they are at work. The culture of presenteeism is also associated with lower staff morale, employee errors and higher employee turnover rates, which is certainly not in any organisation's best business interests. To add weight to this, the City Mental Health Alliance Hong Kong (CMHA HK) – a not for profit member-led organisation supporting businesses to create mentally healthy workplaces – reported that 76% of employees they surveyed said they would still go to the office while suffering poor mental health. Of those, 21% admitted their work suffered as they are unable to function at the normal expected level. Through various company-initiated Employee Assistance Programmes (EAPs), however, the CMHA HK has noted that a number of respondents now have access to counselling and coaching services, and in some cases are able to attend mental health awareness talks. While this represents a positive step forward, EAPs tend to be offered as part of an organisation's well-being policies which creates grey areas around how often these programmes are utilised, evaluated for purpose or measured for effectiveness over the longer term. Furthermore, while a third of managers in Hong Kong reported to have been involved in supporting staff suffering from poor mental health, Profile Search & Selection and The Roffey Park Institute data reveals that more than 50% of managers in general do not feel equipped to support or assist those suffering from mental illness. What is more, less than 50% feel comfortable discussing mental health issues with colleagues. So, while there is a gradual and increased awareness towards mental health, far more needs to be done. Opening up about mental health in the workplace As the driver of employee engagement across an organisation, the HR function can play a leading role in raising awareness about mental health problems and ensuring the right channels are in place to help those that suffer from mental illness. Through working with management, for example, the HR function can help to put into action a top-down approach to help organisations to shift mindsets and company cultures. Recognising the importance of mental health and well-being is key to fostering a supportive working environment – quite simply because it is not just a medical issue as much as inherent to the culture and productivity of the entire workplace. The HR function is also in a strong position to encourage an organisation-wide culture of openness and dialogue on the topic of mental illness to reduce common misconceptions and reassure inclusivity by giving employees a voice without fear of reprisal. This is an important step to establishing a sustainable supportive environment and the foundation for future prevention, or at least, early intervention. There are some simple initiatives that could be launched internally to get discussions started. Mind HK, a charitable organisation in Hong Kong set up to raise awareness and increase understanding of mental illness issues, has launched the #LetsTalk campaign, encouraging people to share a photo with the hashtag and then tag it back to #LetsTalk#MindHK. As Hannah Reidy, CEO of Mind HK states "It’s time to start talking". Part of the taboo around mental well-being is the misplaced concept that those affected are in some way weaker, less resilient or lack determination. To combat this, the HR function could work to improve the perceptions of mental health by encouraging education on the topic as well as engaging in refining the language and discourse associated with mental health. For example, in the same way as the concept of "wellness" has gained mainstream focus within organisations –which is reflected through better work-life balance initiatives – organisations, and employees should understand that mental well-being is simply an extension of the same concept. Mental health awareness at work We all have good days and bad days and we all have times in which we are physically fitter than at others. Mental well-being is the same – sometimes exacerbated by work-related stress and sometimes external factors - but ultimately, we all need to understand that it is okay to not be okay. The more people understand the topic, the more confident they will be in talking about it, which is the next step to being able to practically assist someone struggling. As Olivia Parker, Board Member of Mind HK comments "colleagues who see you every day are the best-placed people to tell if your behaviour is out of character, because sometimes they are easier to talk to as they are one step removed from your home life". That said, a robust framework needs to be in place to effectively help line managers support employees that report to them and help employees in general cope with stress-related illnesses. While some employees do attend mental-health talks, CMHA HK studies indicate that 70% of its respondents had never received any form of mental health training. More HR practitioners should receive mental health training – and in fact HR departments could work towards being able to offer all managers the opportunity to receive relevant training and support. Managers are critical in driving change and by equipping them with these skills, they may be able to notice when an employee is experiencing difficulties. Training could mean employing external support or also form part of the firm’s internal processes. Working with managers and leaders to support employee mental health Furthermore, the HR function could work with senior leaders to promote and demonstrate their clear commitment by supporting those who need it and in doing so, show that mental health matters. The HR function could identify and work with a senior employee to be a sponsor or champion to drive the commitment forward and even develop an internal committee or group to support mental health awareness. Taking another positive step, the HR function could assist to promote the committee as part of the organisation's cultural DNA and could adjust or review relevant mission and values policies and workplace Codes of Conduct to reflect this support. In so doing, the HR function could play a greater role in embedding a culture of acceptance, collaboration and mutual education into the organisation's Employee Value Proposition (EVP). As a result, mental health awareness could be built into all induction programmes, and discussions can be encouraged on employees’ mental health during performance reviews, team discussions and regular one-on-one catch ups. They can also be imbedded into engagement surveys and a firm’s mental health can be subsequently measured and tracked. Job content and roles could be reviewed to ensure they are appropriate and conducive to productive work. HR can also ensure there is a process in place to help people return to work smoothly after a time of absence. On an ongoing basis, the HR function could encourage healthy behaviours, promoting well-being activities such as taking lunch breaks, exercising, getting enough sleep and enjoying a balanced diet. It is commonly accepted that organising company events to strengthen working relationships improves collaboration, trust and openness. Corporate Social Responsibility events for example are acknowledged to have a positive impact on general well-being. On the good news front, while many companies in Hong Kong are only at the very early stages of their journey to improve mental health in the workplace, there are undoubtedly signs of positive change. If HR departments in Hong Kong worked to implement just one initiative within their organisation during the coming year, it could make all the difference to a healthier and more productive workforce. For more information on mental health in the workplace, please contact Amanda Clarke, Director, Profile Search & Selection.

PHASE II - GLOBAL FIRMS CONTINUE TO VIE FOR TALENT IN A CROWDED MARKETPLACE In this report, we seek to explore how the market is changing and how the challenges are evolving as time passes. We are looking to share our experience of multiple hires and ongoing searches across the WFOE market; however, we also thought it important to engage CEOs, COOs, GMs and HR personnel involved in the process to share their views directly via Q&A. We hope you find this an interesting read and we are happy to field any questions. For investors backing the China growth story, recent road-bumps such as the ongoing stock market turmoil and rising trade tensions with the US have been a sobering reality this year. However, anyone watching the race for human capital within the on-shore asset management landscape would be forgiven for thinking that market sentiment is anything but bullish. The growing crop of international fund houses looking to plant flags or deepen existing roots in China has shown a real belief in – and commitment to – this long-term and compelling opportunity. This is clear from the ever-growing list of firms setting up wholly foreign-owned enterprises (WFOEs), applying for private fund management (PFM) licences and launching products targeting onshore high net worth individuals and institutional investors. This activity has simply exacerbated the human capital pressures arising from the relative scarcity of talent that we highlighted in our Spotlight on China six months ago. The significant challenge of attracting, hiring and retaining the right individuals, across the front-office and infrastructure positions, continues to be one of the big barriers to firms being able to capitalise on the business potential onshore. We are entering what we are calling “Phase II” of the recruitment landscape. The big difference being that the first movers had to either relocate staff or search from an onshore talent pool, but there were no PFM WFOEs to hunt from; heading into 2019 this is now very different. Established WFOE need to equally focus on Talent Retention as well as Talent Acquisition; new comers will hunt in the PFM WFOE pool as a first port of call; and we are now seeing WFOE to WFOE moves. There has been added complexity to the process of setting up or staffing a WFOE, however as of now these complications do not seem to have had a material impact on the appetite of the overseas asset managers. Recent changes to the Individual Income Tax (IIT) Law for foreign passport holders working in China (although now resolved) could have had a genuine impact, but the reality is a “wait and see”; whilst the slowing down of the approval process from the regulators again appears simply to be an issue to be navigated and not one to change tact. Whilst China remains a difficult market to navigate, and it still not possible to follow a strict formula for developing the WFOE (beware “experts” with concrete advice), the landscape for human capital is maturing. Attracting the right people is difficult (but not impossible), and a local lens does need to be applied. OUR SEVEN OBSERVATIONS As already mentioned, the onshore market is moving so quickly right now that we are in uncharted waters as regards to human capital challenges. Below are seven themes we have identified as being relevant and consistent in the past few months, and as we head into the end of the year. 1. Shift in talent pool means a shift in priorities It seems simple to point out, but the reality of the evolving market means that those firms entering China in 2019 are facing different recruitment challenges and opportunities to those faced by the first movers in 2016 and 2017. The first movers had to either relocate staff or hire from JVs, Chinese Mutual Funds or Advisory/Research WFOEs; and the challenge of culture and operating in an international environment were always seen as a critical part of the hiring decision. Those looking to enter in 2019 will naturally look to hire (in part) from the existing PFM WFOEs as a logical first step, a luxury not given to the early arrivals. This means that the first movers need to focus very hard on Talent Retention over the coming 12 to 24 months; this does not mean simply competitive compensation, but good people management and following through on the strategy that attracted the team in the first place. 2. Sought-after staff still hard to find For new WFOEs, the priority remains a general manager. Since this individual will spearhead the business, it is a decision that will impact the ability to hire within the group going forward. As a result, foreign fund houses face a dilemma: while the available talent for them to consider is shrinking in number, they know that hiring the wrong GM is probably the costliest human capital mistake they can make. In addition, there is an increasing focus on expanding the various front-office and infrastructure roles. Competition is hottest for compliance professionals, traders and portfolio managers. In terms of the latter, however, many global players are now opting to bring on board what some practitioners call “shadow PMs” – where a global fund house puts in place a less experienced individual on-the-ground, with a more senior PM offshore having oversight. 3. Regulatory changes to JV structures to create new openings Recent regulatory changes in China to loosen restrictions on foreign investors’ ownership in joint venture (JV) fund structures are the source of further competition. There is uncertainty around the outcome of existing JVs based on ongoing negotiations, bargaining power and the existence (in some cases only) of previous agreements between the foreign and Chinese parties. As a result, many senior candidates from JV mutual funds are now more active in the job market. Many foreign firms are trying to look to the potentially-larger commercial opportunities outside the PFM world and see this as a journey where the map is becoming clearer over time. 4. Demand moves beyond Shanghai Whilst Shanghai undoubtedly remains the hub for the PFM WFOEs, increas­ing business needs in Beijing especially for foreign managers are apparent. We see a shift in demand among our clients towards Beijing-based executives, which represents an evolution from the previous focus on hiring only in Shanghai. Among the drivers of these trends are: a need for replacement staff; gaps left by individuals leaving current representative offices; and new roles created as a result of recently-established advisory WFOEs in Beijing. The current market environment is also challenging international asset managers to tap the existing, relatively-shallow talent pool. Some other foreign funds setting up WFOEs are run by life insurers and even private banks. 5. Sequencing of hiring is becoming critical As the number of international asset managers with WFOEs grows, we are seeing a sequenced and pragmatic approach to human capital becoming more prevalent. Best practice in today’s market seems to be hiring the GM and Chief Compliance Officer first, with the top-picks being individuals who possess a combination of strong government relations, deep market knowledge, relevant contacts and an ability to interface with management in offshore offices. A second wave of hires will tend to consist of heads of legal, operations and trading. Firms then need to decide on the type and size of Investment teams they want onshore. Sales hires are now more likely to be much later in the process to avoid staff being hired who are unable to perform their duties while waiting for regulatory approval. 6. Differentiation starting to pay From an investment perspective, many investment management WFOEs are looking to differentiate themselves by offering a more diversified range of products today than they did a year ago. In line with investor demand, these include, for example, quant strategies, commodity trading advisors (CTAs), multi-asset funds, real estate, private equity and fund of funds. To achieve this, these WFOEs need to either hire local talent onshore, or relocate employees from outside of China, including Hong Kong. Another option is to acquire local private funds or mutual funds. 7. Buy or build? We have observed a number of overseas firms exploring the possibility of buying existing fund management companies in China. This seems to be driven by a desire to either turbo-charge an organic build, or to short-circuit the organic build altogether. The strategy seems simple in theory, but execution appears fraught with complexity. In China’s vast fund industry, the foreign presence is still small. To date, a total of 14 foreign managers have received permission to launch products that invest onshore to domestic professional investors. However, this is out of 9,000 PFM licence holders, according to recent statistics from the Asset Management Association of China (AMAC). Foreign managers have launched 16 funds aimed at domestic professional investors out of 36,000 total products available. This poses an interesting question to global firms: is it better to buy a PFM-licensed firm or a local mutual fund to leapfrog the process via the existing track record and AUM? LATEST FUND ACTIVITY The current WFOE landscape offers multiple opportunities for international asset management firms to access the local base of institutional and high net worth investors. The business scope depends on the specific category of licence: Qualified Domestic Limited Partnership (QDLP) licences apply to managers that have only registered a QDLP WFOE with AMAC Private funds are for managers that have only registered an investment management WFOE as an onshore private fund manager with AMAC Dual-track applies to managers that have registered both a QDLP WFOE and an investment management WFOE with AMAC There are also firms with an unconfirmed status – a licenced QDLP and/or investment management WFOE but which have yet to register a WFOE with AMAC. Approved QDLP managers in 2018 ​International fund houses with PFM licences ​​ Q&A WITH LEADERSHIP GROUP As the market moves quickly and the competition for the best staff intensifies, we conducted confidential interviews with three senior industry decision-makers to gather comment directly from individuals responsible for hiring staff for their PFM WFOEs onshore. Below is the summary of this cross-section of views based on the same six questions around human capital opportunities and challenges. Respondents A Hong Kong-based CEO of a fund manager that has built a WFOE (CEO) A Shanghai-based General Manager of a leading WFOE (GM) A Hong Kong-based Chief Human Resources Officer of a fund manager that has built a WFOE (HR) Q&A Attracting talent What do you see as the most significant barriers to hiring the right talent in China’s asset management market? CEO – Cost and candidates with sufficient and relevant experience, such as in asset management, both locally (ideally in private funds and mutual funds) and globally. GM – There are certainly challenges today, but not in comparison with those I expect to see in the future, once WFOEs move in to the direct retail distribution channel. When this happens, there will be direct competition between foreign and local players. At that point, language and investment skills will become more important and will be in even greater demand. HR – The challenges often depend on the role; for some, there could be language barriers, whereas for others there is a small talent pool, such as for PMs with three to six years’ experience who do traditional bottom-up investing. We find that we need to move much quicker in China than in some other markets, so we don’t have the luxury of trying to compare three or four candidates and bring them all through the process; we need to be decisive. In addition, educating internal managers that are new to working with Asia, and especially China, requires us to choose the right people, not just those who are the best communicators. Finally, the increasing tax for potential internal transfers is another challenge. Biggest talent influence in the China market Has the shortage of talent in some areas of the China market influenced the plans for expanding your business? CEO – Not yet, but the universe of decent candidates for certain functions is very small, for example in compliance. GM – Unless we have the right people, we won’t be able to launch funds across various asset classes. It is challenging to attract the right investment personnel as some of the best people work at local funds and are often managing funds of significant size, at least in comparison with the AUM of WFOE-run funds. HR – No. Hiring pain-points What would you say are the main ‘pain points’ when hiring talent in China? CEO – Cost, along with candidates who can understand the bigger, global picture. GM – Finding people who understand China and also how to work within a global franchise. Very few, if any, candidates that we speak to are going to be perfect; we need to look more at the value they can bring. We need to approach the situation with flexibility and not get too focused on someone’s ‘day one’ value. A ‘growth and potential’ mind-set is more appropriate in determining someone’s long-term value, rather than finding ‘plug and play’ talent. HR – Dealing with regulators. This can make it difficult for people to resign from current companies, depending on their previous role and what they will do at their new firm. Leadership characteristics What specific leadership characteristics do you look for in the talent you hire for your China business? CEO – The ability to see beyond China, to accommodate a global perspective and champion the culture of a global organisation within China. GM – Cultural fit is the most important characteristic. The desire to put clients first is also essential in anyone we decide to bring on board. They need to operate in a transparent way and be able to articulate themselves. They also need to be a team player. HR – Adaptability, strong communication skills and an ability to work across functions versus just being a technical expert. As there are many challenging situations that are very complex, we need someone who can navigate the ambiguity and keep internal stakeholders informed. We don’t necessarily need someone who has done this type of role before; we prefer someone who is looking to build a business, so that they are hungry and driven. We want to hire someone who really questions our business plan and strategy before they are willing to join us, since this shows they appreciate that it will not be an easy road for a foreign firm. Trade tensions Are the ongoing global trade tensions having any impact on your plans for the expansion of your asset management WFOE business in China? CEO – Not yet, but recent news about a policy shift back towards another QDLP slowdown suggests that the global trade war is now having an impact on asset management. GM – Not at the moment from the standpoint of investment into the WFOE. The only risk, for a US WFOE, is multiple licensing processes being potentially delayed in some way. However, at this stage there is no evidence this is happening. Talent retention How are you approaching talent retention in your China business? Do you have a specific strategy in what is a very competitive market? CEO – This is a work in progress. A critical success factor in talent retention will be finding a way to give Chinese employees ‘skin in the game’ via equity in the organisation. GM – We try as best as we can to bring in the right people under the right conditions in the first place. We have put in place a hiring process that places honesty and transparency at its core. We aim to ensure, through constant open and honest dialogue, that we know what people think about the direction things are going in. We also look to ensure there is a firm-wide understanding of how to engage with people in different geographies. We want to provide the right amount of support and resources for staff, so we continually seek to understand how comfortable the staff are with the business strategy, their personal progress and how they are evaluated. We try to create clear goals to which people are held accountable. Stability is key, as is the need to ensure that the views from both the Hong Kong and China perspectives are aligned. HR – We ensure they have accountability and the right level of autonomy. We also want their voices to be heard, to get lots of regional and senior leadership attention. We fully understand that there will be turnover, so we need to focus on building the right infrastructure to be able to sustain turnover and not cause issues in other functional areas. WHAT ARE BOTH SIDES LOOKING FOR We thought it would be useful to provide a recap from our previous China asset management report on the common factors and recurring themes that continue to impact the decision-making for candidates and potential employers in China. Some of these factors remain unchanged from six months ago, while some have risen in significance and others have fallen. We have included drivers for foreign employers in non-PFM WFOE structures also. Local candidates – considering a foreign employer Drivers Increasing their compensation, including potential equity participation Boosting their status in the domestic market Being part of a firm committed to growth in China Gaining autonomy to make management decisions Playing a bigger role within the development of the industry Leveraging a strong global product-set yet working within local distribution channels Deterrents Concerns over the sustainability of the target employer’s strategy in China Limited opportunities to advance beyond a mid-tier role A potential culture clash within a foreign firm Challenges in communication with offshore management Fear of not having a ‘voice’ – a lack of autonomy in devising onshore strategy Missing out on the opportunity to grow organically with a Chinese firm Senior staff do not want to be the “execution arm” of the global strategy Foreign employers – looking to hire local talent Drivers Market knowledge, experience and connectivity in the domestic market Language skills and a similar mind-set to connect with global colleagues A track-record working within global firms to understand international processes An ability to cut through red tape onshore and be effective in ‘getting things done’ Able to be a trusted advisor locally with corporate best interests at heart A strong appreciation of the overseas/HQ regulatory environment Deterrents Insufficient knowledge and/or connections within China A lack of seniority or gravitas to attract other hires and drive growth Limited (or zero) experience working within an international firm Questionable motives or loyalty stemming from a (perceived) focus mainly on money Weak communication/language skills and/or cultural awareness Unable to generate genuine levels of personal trust WHAT'S NEXT Forgive us for stating the obvious, but the market remains hugely busy; demand for talent is high and the qualified candidate pool is thin. However, behind the self-evident headline, we genuinely feel that the landscape in China is changing and the challenges that go with this are changing too. Foreign firms that are established now have a much better grip on the market and are being driven equally by their local leadership. New entrants, meanwhile, have a different talent landscape to look at, including those that have already trodden the WFOE path. 2019 promises to be a busy and eventful year. Our observation and opinion is that we are entering “Phase II” in the evolution of the WFOE story from a human capital perspective. Conclusion Both employers and potential employees understand the market better, and whilst high demand persists the slightly frenzied atmosphere of early 2018 has passed. The demand for talent in the roles of GM, Compliance, PM and Sales remains high, and fundamentally the decision-making criteria for both parties has not changed. Many foreign firms are thinking two steps ahead to majority JV control or gaining local Mutual Fund Licenses. The importance of sequencing hires and establishing goals for the next 24 months is thus paramount. Demonstrating strong commitment to the China market and to the regulators, and others who influence the issuance of licences now and in the future, is very important to those who hold the keys to success; and those foreign firms attempting to be “fast followers” will face increased challenges. The ability to clearly articulate a well-thought-out, long-term China strategy is the key to attracting the best talent; however, then having the organisational fortitude to deliver on that promise in a complicated market is crucial to either retaining, or losing them. Outlook 2019 and 2020 will inevitably see more regulatory change and the firms that are forward thinking, adaptable and nimble will continue to be the ones who make the most progress. “Talent Retention” for established WFOEs is key in 2019. We have started to observe candidates moving WFOE to WFOE to trade upon their experience gained, and this is usually at a premium. Those firms arriving in the market a little later face a double-edged sword – there is a talent pool whom have 18 months WFOE experience; but they are harder and more expensive to shift. Clear articulation of the long-term China strategy of the group is even more important in 2019 than it has been before – there are simply not 50 tier-one GMs or Heads of Sales, and the best will be discerning. Many firms are exploring innovative ways to tie in senior staff long term via incentive programs. These could be linked to equity, shadow equity or profit share in the WFOE. This is a sticky topic and a difficult one to work out, but the goal is aligning senior staff to the success of the WFOE. OUR ASSET MANAGEMEN TEAM For more information on recruitment trends, please contact our Asset Management team: Hong Kong Office - Andrew Oliver Singapore Office - Stanley Teo Shanghai Office - Yao Xiong Beijing Office - Winni Wei