China’s newest bankers discover the “golden rice bowl” isn’t so attractive anymore

China's Transition
China's Transition

For decades, a job at a Chinese bank meant the promise of a respected, secure, and lucrative career, regardless of the post. Not anymore.

Because most big banks are run by the state, or “in the system,” Chinese society traditionally valued positions at a bank higher than similar ones with a private insurer or a stock broker. Chinese college graduates who majored in finance didn’t mind being a bank clerk for years, if it meant they could get a more lucrative position at the same bank in the future.

But now China’s massive state-owned banks, the world’s largest, are coming under pressure to cut costs as the economy slows and profits shrink. At the same time, a record number of finance graduates are entering the Chinese job market. The banks are suddenly packed with disillusioned young employees trapped in repetitive jobs, working longer hours for lower pay than their predecessors just a few years ago.

Once seen as a “golden rice bowl,” a term for a cushy state-sponsored job for life, young finance professionals are finding it miserable instead. As a result, they’re doing what was once unthinkable—quitting.

Falling staff at state banks

Some 35,000 employees were cut from the payrolls of China’s 19 listed banks in the first half of this year, according to the latest company filings. China’s four biggest state banks alone have slashed 25,000 jobs since the end of last year, the biggest cull in at least six years.

It’s hard to tell how many of these departures represent workers being cut by the banks versus bankers leaving voluntarily. Many young bankers told Quartz entry-level jobs have become so terrible that they and their young co-workers are being practically forced out.

Chinese banks employ an estimated 3.8 million people (link in Chinese), and the big four state banks—Agricultural Bank of China, Industrial & Commercial Bank of China, China Construction Bank, and Bank of China—collectively hire almost half of them. After ramping up hiring from 2011 to 2015, they’re now doing the opposite, as all of China’s state-owned companies come under pressure to cut costs.

In the first half of this year, ICBC cut 7,600 workers, the most of the big four, while BOC reduced staff by 2.2%, the biggest as a share of its workforce.

China’s lenders typically have a staff surge in the second half of the year, thanks to massive hiring of college graduates in the summer, and see a drop in the first half because workers quit their jobs after getting year-end bonuses. Still, this year’s first-half workforce drop is the biggest since at least 2010. And the surge in the second half of 2015 was the lowest since at least 2011.

A big wave of bankers began to quit their jobs two years ago, as internet and private firms expanded into financial services, said Song Jie, general manager at Shanghai-based G&E Human Resources Consulting. Prominent among them are tech companies like Alibaba and Tencent and retail giant Suning. Young bankers believe that joining the state system comes with less ability for promotion and less exciting work, he said. “Key positions are not necessarily determined by your ability,” and “there are many administrative appointments” in state banks just like any other state-owned corporate entities, Song said.

The turnover trend is more visible this year because more lower-level bank employees—including recent college graduates—are also quitting in droves, as they have little confidence about the future of China’s traditional bank sector, Song noted.

A record number of finance graduates

While Chinese banks payrolls are shrinking, Chinese colleges are churning out more finance graduates than ever. In 2016, an estimated 9 million college graduates held economics and management degrees, making up 24% of the total, official figures show.

The glut translates into fiercer competition. Financial enterprises now favor college graduates with dual degrees, ideally one in finance and the other in science and engineering, Jiang Yuewei, head of C0-Progress Education Group, which co-organizes an annual campus job fair for about 150 financial companies in Shanghai, told local media (link in Chinese). Jiang suggested finance students get more credentials, like the Chartered Finance Analyst certification, to gain an edge on their peers. Those certificates will bring them “better job opportunities, higher payment, and more promising careers,” he added.

Long hours and low pay

Two years ago, Shirley, a 24-year-old economics graduate, was happy to find a “stable job” as a bank teller at Bank of China in her hometown of Chongqing, and thought that she would work there for a long time. But she found the job didn’t meet her expectations, or society’s.

“I was embarrassed to say ‘I’m working for a bank, and have such a low salary,’” she said after quitting in August. I was embarrassed to say ‘I’m working for a bank’  

During the first year at BOC, Shirley earned a monthly salary of 3,000 yuan (about $450), plus bonuses ranging from several hundred yuan to a thousand yuan every month. That’s an acceptable rate for fresh graduates in Chongqing, she said. This year, she was paid nothing but the 3,000 yuan basic salary, but still worked more than eight hours per day. Among the 80 employees at the branch she belonged to, eight quit their jobs in the first half of the year. Half of them are not looking at bank posts anymore, she said.

Shirley is going to take the national civil service exam in autumn, at her parents’ suggestion, which would qualify her for a local bank regulatory job if she passes. Being a civil servant can be more comfortable than a bank teller, but still pays about the same, she said. “Every day from nine to five… they don’t have many tasks to do,” she said.

It took just 10 months for 27-year-old Kathy Wang to submit her resignation to her higher-ups at BOC. In March 2015, the master’s graduate in journalism was hired as a bank teller at a BOC branch in the eastern city of Wuxi. She quit the job in January, and now works as an accountant at a local court.

Wang worked more than 12 hours a day, and took off only one day every month, thanks to endless training that took up her nights and weekends, and even fell sick from time to time. She was paid only 2,000 yuan per month, “not even enough for seeing a doctor,” she said. Someone in the same post was paid at least four times higher between 2008 and 2012, longer-term employees told her. 70% of the college graduates Bank of China hired last year in Wuxi had quit within 10 months.  

Wang is not an outlier. Among the 180 college graduates BOC hired in Wuxi last year, Wang said, 70% had quit their jobs by the time she did. Half of the new hires had master’s degrees, she said, and some even graduated with economics majors from prestigious foreign schools like Imperial College London and Cornell University. Still, everyone “has to work as a teller for at least three years,” she said, before qualifying for promotion to sales posts.

Michael Sun, 24, is a bank-teller-turned human resources executive with a Shanghai-based asset management fund. He feels more fulfilled with his current job than he did at mid-sized Shanghai Pudong Development Bank (SPDB), he said, because now he can have some “real communication with other people.”

The economics graduate from a prestigious university in Shanghai was originally hired by SPDB as a wealth manager two years ago. He worked as a bank teller during a three-month probation and stayed at the post after a fellow clerk took went on maternity leave. He never had a chance to switch to wealth manager because the post was “almost saturated” at his branch, he said.

Sun said he had a huge expectation gap. He envied graduates who joined in the same year as he did, but were soon promoted to wealth managers only because of their “family connections,” he said, which translated into sales of financial products. “They are from schools that are no better than mine,” he said. As for his bank teller role, “anyone who can do math can take it,” he said.

400 customers a day

Young employees still working with Chinese banks are struggling. Jaunty Y, 23, an English major who asked to only reveal the initial of her surname, joined a Shanghai branch of ICBC three months ago. Now she is looking for a way out.

Y thought the working environment in banks would be “orderly” and “tidy,” she said. Starting her career at the world’s biggest bank by assets meant she “won’t make the first step wrong,” she said. But rather than handling investments or research, much of her six-month job rotation has been rudimentary customer service for a huge number of mom-and-pop investors, “400 people a day at most.”

This year, ICBC installed self-service machines to partially replace bank tellers at some branches. As a lobby manager, Y’s job includes tutoring some tech-illiterate middle-aged investors how to use these machines and other newly launched online services. Once she spent almost an hour explaining to an elderly woman how to set up password on a mobile app to check her account balance.

“A week later, she came again with the same question,” Y said.

There’s no promise that Y wouldn’t be assigned to a similar post when this rotation ends. So, she is looking for opportunities with international consumer goods companies where she doesn’t to need to “do the same thing at every moment of every day.”

Tom Tsui contributed reporting.

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