HSBC to Raise Pay for Junior Staff as Banks Battle Burnout
HSBC Holdings Plc’s global banking unit will raise fixed pay for junior investment bankers in key hubs and hire more of them to share the workload, becoming the latest global firm to take steps to address burnout among staff.
The lender will also shorten a four year associate program for certain groups in hub locations, including Hong Kong, London and the U.S., according to an internal memo seen by Bloomberg News. Associates with three years experience will now be considered for promotion to vice president, or associate director, the memo said.
The work-till-you-drop culture of global finance has come to the fore in recent months as Covid-19 has emptied office towers in New York, London and beyond and the industry experiences one of its busiest years in memory.
A recent internal presentation by junior analysts at Goldman Sachs Group Inc. on their workload set Wall Street abuzz when the document found its way onto the internet while a LinkedIn post from an HSBC contractor about his experience in having a heart attack went viral. Several major banks, including JPMorgan Chase & Co. and Goldman, have already promised to lighten the load.
HSBC also plans to increase the number of analyst and associate hires in key business lines and told staff at its investment bank to limit pitch books to 25 pages and that additional measures will be taken to enforce its “protected weekend” policy and ensure that everyone takes enough annual leave. A spokesperson for the lender confirmed the contents of the memo.
The fight for talent is particularly intense in Asia, a region where the bank is pivoting with billions of dollars in fresh investments and big hiring plans. HSBC’s Chief Financial Officer Ewen Stevenson said this week that the lender may increase the size of its bonus pool as it attempts to build out its wealth business in the region, while a surge in trading has triggered pay increases at some rivals.
The mooted pay rises come even as the lender, which cut variable pay about 20% last year, is trying to keep a lid on costs as part of its response to the pandemic, with plans to cut its workforce by about 35,000. Chief Executive Officer Noel Quinn and his top lieutenants were forced to defend bonus cuts to unhappy investment bankers and traders in March.
Bloomberg News reported on Friday that CLSA Ltd., controlled by China’s biggest securities firm, is boosting the monthly paychecks of some bankers by 30% on average as the Hong Kong brokerage seeks to stop defections after a two-year exodus of key staff.
While HSBC focuses more on Asia, its investment bank in Europe has seen cutbacks and is undergoing changes in its senior ranks with Philippe Henry, HSBC’s head of global banking in the Europe-Middle East-Africa region, retiring after 32 years.
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