As a headhunter, most of my work is helping people move to the larger financial centres, but it's not always the case.
On the forums, people have been talking about Dubai, and other Middle Eastern financial centres.
I can see why it is tough to get people to Dubai, even though of course it is radically different to places like Riyadh. Dubai has a much more liberal political and social climate, but even then there are issues. If you're trying to get people to go to any lower tier financial centre there are a few factors working against you.
Entry level people are looking to longer term issues like learning the core of their business, and getting good brands on their CV. That's hard to do outside London/NY/Chicago and Paris, let alone the Middle East, so we have a critical mass issue, it hard to get the best entry level people to help you grow, until you have grown. This doesn't just apply to the Middle East, few non-Germans show any enthusiasm for Frankfurt, and a large % of Germans want to come to London or NY.
Older people often have families and/or partners, and this makes any form of international movement non-trivial. Now that women have real jobs, they are a non trivial component of household income, so in a place where good female jobs are rare, you need a substantial pay hike just to get even. And of course a growing number of bankers are women.
Even the most politically correct educated western woman can become rather reactionary at the thought of having to live in any Moslem country. That cuts both ways of course, since the majority of quants are unmarried men, are they really going to want to go to Dubai for more than a few months ? Back when Britain had an empire, there were a huge number of military nurses, governesses and nannies...
Kids are an issue, although both Britain and America have amongst the worst education systems in the developed world, this makes quant-parents much more conservative about the quality in the location you want to move them to. Also, getting back into the system can be hard.
That doesn't just apply to education, but the careers of the parents, and you would not be sensible taking a job outside the major centres that did not leave you a path back in, even if you feel that the new location is a long term home. First of course, the liquidity of the labour market locally may be terrible, so there may be nothing for you to move to without seriously screwing with your personal life, and this can keep people in unsatisfactory jobs for years.
We also see what I call the Stargate Effect. When you set up shop, at first it's easy to find some locals with skills that you need, independent of what those skills are, and where you go. Quant finance has grown to the point where there are quants from every city on the planet. Locals are typically cheaper than staff in Western Europe and North America, which attracts some banks to the idea. That sets a price expectation in the minds of management. However, the next round of hires are from a smaller pool, and you may need to get in staff from other locations. That means the premium that RiskCapital rightly points out, but I fear it's not enough to do it well. Quality typically suffers, since management sees the earlier price as "fair".
Also of course, the first wave of hires see the newbies get more money, and because management hasn't offered enough you get later employees of lower value getting more than the higher quality low paid first wave. That can cause staff turnover, often to move clean out of the offshore location. We see this in India big time in other industries, with amazingly high levels of staff churn, but actually I call it "Stargate" because I first saw it happen in Stevenage, England, whose post code is SG1. Lots of firms moved to the cheaper location, vaccuumed up local talent cheaply, and hit a horrible wall as they expanded. Firms moved there to escape the high London cost base, but it was relatively close to London. So was seen as a good compromise. But once the local labour pool was used up the only nearby source of skilled workers, who actually wanted more money because travel was awkward.
So it's a pattern independent of country or industry.
These are all reasons why banks still have so many staff in horribly expensive locations.
The current market makes it easier for Dubai/Riyadh, but at the same time people are becoming more conservative, and the needs of Dubai will not really match the skillset people who've been dumped in this wave.
To all this we see a serious decline in the quality of of packages offered to staff who are asked to relocate offshore within their current firm. "offered" is actually the wrong word "threatened" is a better one.
Housing costs can make a big hole, and forget any useful allowance for partner and family. "Norms" for locations are set for rent, etc and they are usually much lower than you would pay for yourself.
Although air fares are much lower than they were 10 years ago when I used to travel a lot, (but higher of course thaqn 1 year ago), firms are now very tight fisted on trips home.
You will typically be taxed on housing allowances, which can hurt when you are maintaining a home, if your family don't come with you.
Even in foreign cities I have been many times, I cannot live as cost efficiently as one in my own country, and I think that is generally true, so even in a cheaper city, you may find yourself paying more for things.
It used to be the case that 'internal' expats were expected to make more money, but now they find that the detail of packages mean they are substantially worse off. Since we deal with the smarter end of the labour market, few I talk to are naive enough to believe the verbal promises that this experience will be valued by the bank, and will help their career.
The worst I saw was HSBC who said to a set of "non-critical" (ie non-executive level) staff that their jobs were redundant, but they could work in Indonesia at local rates.
Quite quickly they discovered that there were more critical people than they had first thought, and had to backtrack big time. We've seen JP Morgan do the same thing, but on a more individual basis.
Later, I'll share what can be done about this...