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Is this the real purpose of the new HSBC hierarchy?

What's really going on at HSBC?

If you work for HSBC in Hong Kong or anywhere else in the world, you’ll be aware that the bank has just introduced a whole new career structure, but unpicking what it all means is not straightforward.

The bank says it is creating a ‘simpler leadership framework’ that makes it less hierarchical the higher up you go.

HSBC currently has four management bands below Group CEO Noel Quinn: group managing director, group general manager, GCB1 and GCB2, where 'GCB' stands for 'Global Career Band.'

These have been deemed too unwieldy and HSBC has therefore whittled them down to three, namely: group executive, general manager and managing director.  Below this, it will keep its existing bands that range from GCB3 to 8, where employees designated 8 are the most junior. 

The bank says this isn’t a cost-cutting move, and a spokesperson said that “there will be no change to contractual employee benefits as a result of this change.” In other words, if someone doesn’t make the cut in the new MD layer, and is effectively down-graded, they won't lose any of their perks.

As things stand, the average progression from Analyst to MD is around 15-20 years. Under the current structure, an analyst is likely to be a GCB6, an associate would be GCB5, an associate director GCB4 and a director GCB3.

As part of the changes, all HSBC's employees in GCB2 will automatically be renamed managing director in March 2022.  Also, in the original internal announcement from the group head of HR Elaine Arden seen by eFinancialCareers,  it was suggested that there might be a chance for lower bands to get promoted more quickly to MD. - “The managing director band will encompass a wide range of roles across layers three to five,” said that letter. By the time the official letter was circulated, the reference to those specific layers had disappeared.  

Sadly then, it looks like the changes won't make it any easier to become MD at HSBC, unless you’re a director who’s already doing the job of an MD but without the title. To understand what HSBC is trying to do, look upwards, rather than downwards: it’s an attempt to cut some of the fat (or at least the differentiation in compensation) from the levels above MD.

Arden said that under the new structure “your contract will remain the same and there will be no negative impact on existing pay of benefits.”

“Existing” is the crucial word here: the change could set up a rather different future.  Under the previous titles, group managing directors and group general managers enjoyed perks like first class airline travel and top-notch accommodation in Hong Kong  along with big pay rises. While no-one who currently enjoys these perks will lose them, the new structure could allow a reset for people who gain future promotions.  In future there will be no GCB1s, which was seen as a halfway house between being MD and group general manager.

Instead, there'll just be the new general manager band sitting right below the group executive committee. General manager will cover roles that are responsible for leading the group’s most significant businesses, regions and playing a longer-term role in forming strategy.  HSBC is set to announce who the general managers will be imminently, and they will be formally promoted in September. It’s fair to assume that Matthew Ginsburg, the newly-appointed global co-head Capital Financing and Investment Banking Coverage unit will be one. Under the new definition, Greg Guyett, chief executive of global banking, would presumably slot into the group executive bracket while sector heads will fall under the definition of MDs – if they’re not already. 

One former senior banker said:  “Their whole structure is lop-sided.  They have good level five people who are running things but are not ranked higher because they haven't been around as long as say a commercial banker with 30 years service who doesn't do much. They're trying to make people accountable. It will be interesting to see if it works.”

The aim of the changes is to create “a leaner and more focused, agile and competitive bank” said Arden. That’s no bad thing. But getting rid of underperforming senior staff would achieve a similar aim. Perhaps the conclusion is that is easier to shape the future, than change the past. 

Have a confidential story, tip, or comment you’d like to share? Contact: in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.) 

AUTHORDavid Rothnie Insider Comment

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