HSBC is among the world’s leading banking and financial institutions. HSBC provides banking and financial services across the globe with a well-established market share in various established and emerging markets and economies worldwide. The multinational organization has well-developed operations in both established and emerging markets. Currently, the banking and financial corporation which was founded 1865 has its operations in 74 countries and serves over 100 million customers globally, through its banking and financial services. The core business services of HSBC includes the provision of retail banking and commercial banking respectively. Also, central to HSBC’s core business functions is asset management as well as the provision of global private banking services to clients worldwide. With over 6000 offices, the organization employs over 250,000 staff, from operational employees, middle-level management, and the top level management. To ensure optimum productivity and management of employees, HSBC utilizes various human resource policies, key among them is the compensation of employees. This paper comprehensively explores and analyzes the compensation of HSBC management trainees, particularly managerial employees. Equally important, the survey includes a comparative analysis of HSBC competitors as it pertains to salary compensation, to establish the organization’s external competitiveness.
Comprehensive and Comparative Salary Survey
HSBC compensation policy consists of four key aspects which include, fixed pay, a range of employee benefits covering elements such as health, insurance, and savings, annual leave, performance-based discretionary awards. The average annual compensation for HSBC employees currently stands at $88,000 per annum. However, it is best to take into account, one’s role and job description is a key element determining compensation in HSBC (Berber & Morley, 2015). Other factors that drive HSBC compensation system is how long an individual has worked for the organization, as well as where one lives.
According to a research conducted by PayScale (2017), numbers indicate that for instance, relationship managers earn an average of $77, 439 and portfolio managers take home an average salary of $88, 233 per annum. Compliance managers earn an average of $ 111,588 per year, with I.T managers and operations managers earning $107,557 and $61,204 on average per year. For management trainees, compensation ranges from $59,755 – $64,067. Between the first and 5th year of working the median pay stands at $68,000 per annum. On average those who have been the organization for 5 to 9 years earn $85,000 annually, as those who 10 to 19 years fall under the approximately $90,000 annual compensation mark. In comparison to HSBC competitor, Bank of America, a study conducted by PayScale (2017) indicates that, the portfolio manager earns averagely $84,000, relationship manager earns $69,000, and the I.T manager earning $114,000 respectively. Bank of America compliance managers earns an average of $69,000 and operations manager making $60,000 annually. On the other hand, the compensation of project managers is at an average of $114,000, as management trainees compensation is at $51,000 and $64,000 annually.
Factors Shaping HSBC External Competitiveness
It is best to begin by taking into account that external competitiveness refers to the dynamic environment in which an organization operates or competes in along with its competitors. In other words, it is safe to say that external competitiveness involves the strategy adopted by an organization to compensate staff in comparison to its competitors (Berger & DeYoung, 2012). As such, an organization that offers high compensation and benefits than their rivals in the industry stand a chance of attracting and retaining a better set of talent and employees, albeit at a high labor cost and the possibility of reduced profit margins.
From a wider perspective, the primary factors shaping HSBC external competitiveness includes the following factors; the aspects of the labor market, product aspects, as well as organizational elements. The aspects of the labor market factor are determined by the nature and principles of supply and demand. On the other hand, the product market factors can be defined as the level and degree of competition and demand for the product in the market in which it operates. Organizational factors encompass elements such as strategy (UNCTAD, 2016). However, from a much broader perspective, the other main factors shaping the external competitiveness of HSBC is the rapid technological evolution. The technological revolution has triggered globalization and facilitated the integration of the national and local markets and economies, therefore promoting international trade in an unprecedented manner. Other factors include the regulatory environment and geopolitical climate.
- Nemanja Berber & Michael J. Morley. (2015). Management compensation systems in Central and Eastern Europe: a comparative analysis. The International Journal of Human Resource Management, 7 (13) 34- 65. http://dx.doi.org/10.1080/09585192.2016.1277364
- Berger, A, R & DeYoung, H. (2012). Globalization of financial institutions: evidence from cross-border banking performance. Brookings-Wharton Papers on Financial Services, 23-158.
- United Nations Conference on Trade and Development (UNCTAD). (2016). United Nations Conference on Trade and Development World Investment Report. UNCTAD Press, 10 (4) 71 – 86
- PayScale Human Capital Research. (2017). Average Salary for HSBC Employees. Retrieved from PayScale website https://www.payscale.com/research/US/Employer=HSBC/Salary
- PayScale Human Capital Research. (2017). Average Salary for Bank of America Corp. (BOFA) Employees. Retrieved from PayScale website https://www.payscale.com/research/US/Employer=Bank_of_America_Corp.(BOFA)/Salary/Page-2