Standard Chartered ‚Äúlocalizes‚ÄĚ China strategy to recruit rich kids
British bank Standard Chartered Plc., which has a large presence in emerging markets, particularly Asia, is apparently taking the concept of localization of talent in China in a new direction by offering highly sought-after internships to the offspring of VIP clients.
For many students hoping to enter the financial services industry, an internship is a vital step, offering first-hand experience and a chance to network. The recruitment process is fiercely competitive, and while it is generally regarded as merit-based (these companies want the best and the brightest) it is an open secret that connections can help.
But if local media reports are true, Standard Chartered is taking a much bolder approach: the bank will give priority for internship places to the children of its VIP clients -- those with a deposit account of at least 500,000 yuan ($80,000).
An unnamed PR officer from the bank was cited as saying by Xkb.com.cn that if two candidates of the same calibre came head to head, the VIP candidate would be favored.
Such a distorted recruitment process, if true, would cast serious doubts on whether Standard Chartered can actually adapt to local competition or whether the bank is downgrading itself in its China operations and sacrificing its reputation for service quality.
The British bank isn’t alone in hiring the children of the rich. Due to the fact that Chinese lenders rely heavily on the difference in deposit and lending rates to make money, they aggressively pursue depositors.
By attracting the offspring of the wealthy this way for internship programs, banks in China can at the very least attract one deposit account. For those who play the game smartly, they can effectively buy themselves into a network of “second generation rich”, the children of those who have made fortunes during China’s economic reforms of the past 30 years, extending their pool of borrowers and depositors.
No matter whether they are the children of the rich or the children of government officials, China’s one-child policy means that parents will spare no expense or effort to secure the best possible future for their young ones. In other words, future capital injection is secured by the joining of the second generation of the rich and officials (ŚĮĆšļĆšĽ£&ŚģėšļĆšĽ£).
In contrast to their domestic peers, who are typically better connected to local communities and domestic business people, foreign banks are more public in attracting second generation interns, and have lower barriers to entry. Major state-owned banks reportedly ask for as much as 10 million yuan to test the quality of the job-seeker.
This strategy casts doubt on the quality of services offered by such interns. Certainly, it would be unfair to imply that all privileged second generation rich are not academically suited the position or do not possess the proper skills, however, judging a candidate on their wealth is not a progressive point of view.
Does Standard Chartered employ such criteria on a global level in their supposed unified service standard? Would the bank compromise the quality of its workforce to get ahead of the competition?
No profits and no transactions seems to be the industry new standard. More and more foreign banks are reportedly fighting to attract depositors through “VIP recruitment”. But shouldn’t they see the bigger picture of local competition from a long term view instead?