HSBC UK Bank: Talent Management Strategies and HRM Practices

This report provides a detailed evaluation of HSBC UK Bank's talent management strategies, examining their impact on the organization. It identifies current strategies, including recruitment, training, performance management, reward programs, and diversity management. The report further analyzes the impact of regulatory and environmental factors on HRM practices, focusing on financial regulations and the dynamic financial environment in the UK. A core position within the organization is analyzed, and recommendations are made for aligning talent management strategies with organizational goals, emphasizing the operationalization of these strategies. The analysis covers aspects like financial crime risk management, the impact of Brexit, and the need for transparency in executive remuneration, providing a comprehensive overview of talent management within HSBC UK Bank.

Running head: TALENT MANAGEMENT
Talent Management
Name of the Student
Name of the University
Author Note

1TALENT MANAGEMENT
Table of Content
Introduction................................................................................................................................3
Task 1:........................................................................................................................................4
1.1 Identifying current talent management strategy of HSBC UK Bank...............................4
1.2 Recruitment and selection................................................................................................4
1.3 Training and performance management...........................................................................4
1.4 Reward program:..............................................................................................................5
1.5 Diversity management.....................................................................................................5
Task 2:........................................................................................................................................6
2.1 Identifying the impact of the regulatory factor on the organization and HRM practices in
general........................................................................................................................................6
Task 3:........................................................................................................................................7
3.1 Identifying the impact of the environmental factors on HRM practices of HSBC..............7
Task 4:........................................................................................................................................9
4.1 Identifying and analysing a core position within the organization......................................9
Task 5:......................................................................................................................................11
5.1 Recommendation for HSBC aligning with the strategies that the organization needs to
pursue –....................................................................................................................................11
Task 6:......................................................................................................................................13
6.1 Recommending on how the above mentioned strategies can be operationalized..............13
References and Bibliography...................................................................................................15

2TALENT MANAGEMENT

3TALENT MANAGEMENT
Introduction
This report provides a detailed evaluation of the talent management strategies of
HSBC UK bank. The major purpose of the report is to evaluate the existing talent
management strategies and its impact on the organization and then based on the evaluation,
develop a suitable talent management strategy for the organization. Presently, HSBC is one
of the world’s biggest banking and financial service organizations with the customer base of
38 million belonging to four different global businesses- retail banking, wealth
management, commercial banking, global banking and global private banking.
Presently, the organization is running the operation in 67 nations with the employee base
around 229000 (Hsbc.co.uk. 2018).
Particularly, in UK the organization employs around 40,000 people (Hsbc.co.uk
2018). Such large employee base certainly requires a suitable talent management strategy.
The talent management strategy of HSBC in UK includes broad elements such as recruitment
process through skill test, reward program based on the performance, learning and
development opportunities, pay, bonus and leaves. In addition, the talent management
program of HSBC a clear set of goals which connect business, team, individual goals,
expectation and behaviour of employee and the core value of the organization. So, it can be
ascertained that HSBC incorporate its business goals into the process of talent management
program.
According to the annual report of 2017, the current revenue of the organization is
around $51.4 billion and the profit before tax is around $17.2 billion (Hsbc.co.uk 2018). The
primary strategy of the organization is to stand on where growth exists by running the
business strategically, prospering the economy and eventually helping people to fulfil their
needs as well as help them to understand their ambition. To achieve this purpose, the

4TALENT MANAGEMENT
organization incorporated its business purpose into the strategy for captaining value from its
international network. The strategic initiative of the company is to develop an internal
network and then make investment for wealth and retail business with regional scale.
Task 1:
1.1 Identifying current talent management strategy of HSBC UK Bank
The talent management program of HSBC UK covers a wide area because hence, the
focus is, just not on paying the wages to the employees, the firm tends to attract people and
motivate the talented people who are determined to develop and maintain a long term career
and perform their duties in the long-term interest of the stakeholders. The following is the
recruitment strategy of HSBC UK Bank.
1.2 Recruitment and selection
The recruitment process at HSBC includes some particular steps which the candidates
must follow. First, the candidates are supposed to submit their updated Curriculum Vitae
mentioning the purpose and goals of career and the reason for choosing HSBC UK Bank.
Likewise, the candidates must have to pass the online test, the telephonic and face to face
interview. Once the candidates are done with the preliminary test, the final skill test will be
taken on the basis of the job application post that the candidates have applied for. However,
Acharya et al. (2011), mentioned that in CV criteria developed by banks are no longer
effective because the banks have observed several cases where the candidates have submitted
false CVs; so, candidates’ real skills and expertise are hidden in their counterfeited
Curriculum Vitae.

5TALENT MANAGEMENT
1.3 Training and performance management
HSBC UK has the strategy of recognizing the talent and diversity of its people which
remains as foundation of their success. The managers and supervisors as the part of their
performancereview process, work with the employees to prepare clear and concise career
development goals and provide them with the feedback and support to achieve them in a
timely manner. Likewise, human resource department of HSBC helps employees for driving
own personal development plan. In addition to this, the employees are able to access ad use
the comprehensive tools and learning materialsbased on the specific roles and business areas
through the HSBC School Program (Hsbc.co.uk 2018). Therefore, it is worth mentioning that
HSBC has a complete performance development plan for their people and this is probably the
reason of their uninterrupted success. In addition to this, HSBC provides long and extending
learning opportunities to the employees and as the purpose of the learning program, the
employees are provided withmonthly learning opportunities such as e-learning.
1.4 Reward program:
According to Güngör (2011) people cannot be treated as just logical decision makers;
people have the needs for creativity support recognition and self-affirmation. The reward
program at HSBC UK is designed on the basis of performance criteria. Each individual at
HSBC is provided with a separate target and on the achievement of their target, the
candidates are rewarded with rewards which includes both monetary and nonmonetary
benefits. The monetary benefitsinclude the additional incentives and on the other side, the
non-monetary benefits may include the opportunity of availing credit cards. However, such
benefits are only given when a candidate’sperformance is consistent with the goals set.

6TALENT MANAGEMENT
1.5 Diversity management
HSBC’s seven global networks play a great role in accomplishing HSBC’s ambition
for diversity and the major focus on this initiative is gender, ethnicity, LGBT, working
parents, capability and Faith. Each of this network has a different role in maintaining the
diversity at HSBC (Hsbc.co.uk 2018). For example, the abilitynetwork is dedicated to
leverage the diverse skills and abilities of candidates as well as the career of the employee
with visible and invisible mental health challenge.
Task 2:
2.1 Identifying the impact of the regulatory factor on the organization and HRM
practices in general
The major framework legislation that governs the operation and regulation of banking
in UK is the “Financial Service and Markets Act 2000 (FSMA)”. On the other side, Berger
and Bouwman (2013) mentioned that the regulation of banks in UK is undertaken by three
fundamental regulations such as Banks of England, Prudential Regulation Authority (PRA)
and Financial Conduct Authority (FCA). According the principles of RPA framework, HSBC
must have to maintain the safety and soundness of those institutions which is authorized by
PRA by ensuring that the business is performed in a way which neglects the negative impact
on the stability of UK’s financial system.
According to the principles of the framework, the banks with the average core
deposits of more than £25 billion may fall under the newly developed ring-facing legislation
as well as be subject to System Risk Buffer (Bénabou and Tirole 2016). Such changes in the
regulatory bodies, has a direct impact on the organization and on the human resource

7TALENT MANAGEMENT
practices. To avoid and deal with this and other related regulatory challenges such as
financial crime and bribery, the human resource department of HSBC develops multiple
operational team. The firm has extended its HR functions and categorized them including
different set of activities. Thefollowing section discusses the extended HRM functions caused
by the changes in the regulatory framework.
It is certain that regulatory bodies have a strong impact on the multi-national
organizations. In the case of HSBC, there is some external incidents that largely influence
HSBC’s operation. Increasing governmental tax and regulations related to the security and
confidentiality of services remain as the major challenge to the organization. Financial crime
risk management is also a challenge to the organization and thereby to deal with such
challenge, the organization has also developed a strong financial crime compliance
framework along with a global footprint. In addition to this, the organization has also
developed anti-bribery policy and their policy gives practical effort for the global initiatives;
for example, the global initiative may include Organization of Economic Co-operation and
Development.
The organization continues to make investment in technology and training and
particularly, in 2017, almost 98% of its total employee base has been trained through a
mandatory e-learning course called “My Financial Crime Risk” (Hsbc.co.uk 2018). Under
this new program, the employees are properly trained so that they can deal with their
financial crime roles and responsibilities. Furthermore, the organisation has applied the UK
tax authority’s “Code of Practices on Taxation for Banks” and consequently, HSBC pays fair
clear share of tax in all nations where it operates (Hsbc.co.uk 2018).

8TALENT MANAGEMENT
Task 3:
3.1 Identifying the impact of the environmental factors on HRM practices of HSBC
Financial and business environments in UK has become dynamic because the human
or the social needs are rapidly changing. Banking crisis occurs when the banks run short of
funds. In the recent time, UK’s banking sector has observed a significant financial crisis due
to occurrence of Brexit and long-term economic volatility in Chinese bank. Particularly, due
to Brexit, HSBC’s major clients in European nations have ended the business terms with
HSBC (Dhingraet al. 2016). On the other side, the price value in Asian nations have dropped;
therefore, the revenue sours to UK from those nations were not active for a period of time.
Financial risks compel the companies and organizations to encounter illegal instances and
scandals. These issues destroy the reputation, resulting in customer and employees turnover.
All these aspects seem true for HSBC bank. According to BBC news, credit crisis
loss of 17$ is revealed. This is the after effects of the US housing market affecting the loans
(Bbc.co.uk 2018).On the other side Campbell and Slack (2011), HSBC has faced a significant
challenge caused by the financial crisis after the ineffective bad debts in UK. This means
when HSBC in UK was dealing with Brexit’s impact, the retail business in UK has suffered
$4.3 billion. This particular division of HSBC has been hit due to the sub-prime mortgage
crisis which has compelled many homemakers to default on their loans and hand over the
properties. Ob the other side, according to the recent data provided by BBC news, the unpaid
credit card debts are also increasing, which is reflected on the unemployment rate of
UntiedKingdom.
Consequently, a large amount of fines have been used on six banks including HSBC
for the rigging of foreign exchange contracts. The banks in UK had to pay 6 billion as the
penalty for labour rigging and at the same time, bosses of the bans in UK are paying

9TALENT MANAGEMENT
themselves a large amount of bonus (Bbc.co.uk 2018). According to this incident, there is no
transparency in the bonus system of the banksAccording to Bennett and Kottasz (2012), the
executive remuneration should be reformed permanently and then the executive should be
paid salary for the job positions but the bonuses should be paid exceptionally, which should
never exceed the amount of salary.
In this context, Haldane (2013) also commented that the “mega bonus pay” culture
among the banks in UK promoted a lethal combination of reckless as well as excessive risk-
taking. Conversely, Fahlenbrach, Prilmeier and Stulz (2012) argued that bonus culture of
banks do not haveany large impact on the organizationaloperation and the author has
mentioned that in order to measure the rusk of profitability trade-off in trading, the research
completed a ratio of trading earning to its volatility which is known as “Sharpe Ratio of
trading”. So, based on this theoretical perspective, any incentive system that increases the
value of the bank and this is socially optimal (Martin 2011).

10TALENT MANAGEMENT
Figure 1: Average Bonus Share
(Source: Martin 2011)
Task 4:
4.1 Identifying and analysing a core position within the organization
The job role that is being considered as a part of the report plays an important part in
the internal management of the organization HSBC and the development of the same in the
processes. The job role that is considered in this section of the report is Recovery of Fraud
Analyst.
Job description

11TALENT MANAGEMENT
The company offers specialist positions in the fraud detection team where the new
recruited candidate is required to analyse the risks and thereby resolve the disputes, frauds
and claims that are faced by the clients of the business. The position will be helping the
organization to detect the frauds and thereby minimize the same. Exposure to the issues and
challenges helps the personnel to plan the required changes.
Person specification
The person who shall be recruited by the organization must have certain qualities that
are compatible for the effective functioning of the job role in the structure of the organization.
It is based on the understanding of the job role that the specifications of the candidates are
framed by the organization.
 Effective verbal and written communication with internal and external customers
 Documentation of customer account activities
 Must be able to assist customers with electronic/check fraudulent and merchant
dispute transactions on Debit (Becker et al. 2010)
Recruitment channels
 Referral from the Former employees
 HSBC’s Company website
 Sales recruitment agencies and consultancy firms
 Online platforms like the social media and Linkedin profiles
 Local & Industry News
Selection methods

12TALENT MANAGEMENT
 Well designed Interviews for identifying the psychological perspectives of the
candidates
 Psychometric testing of the capabilities
 Aptitude test of the candidates
 Preparation of the Presentations
 Group exercises for making the candidates familiar with the team work
Performance Management Criteria
The performance exposed by the employees is managed by the managed through the
consideration of certain criteria. The determination of the performance management helps in
the retention of the skilled workforce of the business. The major aspects of the change that
the organization, HSBC, aims to undertake is based on the functionality of the KPI (Key
Performance Indicators), which will be helping the organization in understanding the
balance between the needs of the organization and the capabilities of the workforce to
achieve the assigned targets (Alwaer and Clements-Croome 2010).
Task 5:
5.1 Recommendation for HSBC aligning with the strategies that the organization needs
to pursue –
In the above presented discussion, it was identified that recruitment and selection
method followed by HSBC is not effective enough to hire and retain skilled and talented
people. Therefore, to strengthen and authenticate the recruitment and selection method, the
following suggestions have been provided.

13TALENT MANAGEMENT
Submission of Curriculum Vitae: Once the job description for the desired post is
revealed through the advertisement in the corporate site of the bank, now the bank needs to
analyse the submitted CV. In order to avoid the counterfeited information in the CV, the bank
needs to design a skill test in which the criteria should be aligned with the skills mentioned in
the CV. This means for each candidate, the criteria and requirement for the skill test should
be different.
Skill test:On the basis of skills mentioned in the CV, the candidates are supposed to
be give an online skill test, which will be aligned with the job requirement. More specifically,
there should be a proper time slot for each candidate’s test.
Psychometric- An emotion test:As put forward by Gullone and Taffe (2012), the
cases of counterfeited information in CV have created the urge for psychometric test. The
author has pointed out that there are many cases where the candidates write, for example,
“hardworking and positive” but these characteristics often appear to be fake as found
whenperforming the job responsibility after joining. Therefore, a psychometric test should be
taken which includes a standard and scientific technique to measure individual’ mental
capabilities as well as the behavioural style. Fonseca and González (2010) also mentioned
that when an organization looks for talents that match their job criteria psychometric test
could be an effective tool which is designed to measure the suitability for a particular role
based on the personality characteristics and aptitude.
Face to face interview: When the candidates are able to clear the online written test, the
candidates should be called for the face to face interview and psychometric test.

14TALENT MANAGEMENT
Task 6:
6.1 Recommending on how the above mentioned strategies can be operationalized
Implementation CV submission method- When keeping the CVs of the candidates,
the organization must ensure that candidates send their qualification details which are
mentioned in the submitted CVs. The candidates should send the scanned copies of their
qualification details. The personnel involved in the human resource department compare the
details with the CVs and scanned copies.
Online skill test verification: This is an important step because Saleemet al. (2013)
mentioned that in most of the cases, the candidates hire experts to give the skills test; thereby,
it is mandatory for the organization to ensure that the test is given by thecandidates only. So,
to implement this step, the bank should design a portal live video test, where candidates’ face
should be recorded when giving the test. This recorded face should be compared during the
face to face interview session.
Record for psychometric test score: The human resource department has to ensure
that the candidates have met their initial requirements for the position by reviewing CV
submitted by the candidates. Once it is matched, now the personnel have to send out a letter
with some specific instruction for taking part in the psychometric test. The prime objective of
this test should be about the identification at the early stage of the candidates who may not
successfully meet the job requirement.
The bank needs to set a special benchmark or cut-off criteria, where the candidate must have
to reach or exceed the cut off in personality and characteristics test. The device should be
designed with true or false criteria, which will help to identify the true or false characteristics
of the candidates.

15TALENT MANAGEMENT
Role play: In the face to face interview session, the recruiters of HSBC should tale a
role play session in which the candidates will be given a real-world business or financial
problem. Now, the candidates should play the role of dealing with the given problematic
situation.

16TALENT MANAGEMENT
References and Bibliography
Acharya, V.V. and Schnabl, P., 2010. Do global banks spread global imbalances? Asset-
backed commercial paper during the financial crisis of 2007–09. IMF Economic
Review, 58(1), pp.37-73.
Acharya, V.V., Gujral, I., Kulkarni, N. and Shin, H.S., 2011. Dividends and bank capital in
the financial crisis of 2007-2009(No. w16896). National Bureau of Economic Research.
Alwaer, H. and Clements-Croome, D.J., 2010. Key performance indicators (KPIs) and
priority setting in using the multi-attribute approach for assessing sustainable intelligent
buildings. Building and Environment, 45(4), pp.799-807.
Bbc.co.uk (2018). HSBC in $17bn credit crisis loss. Available at:
http://news.bbc.co.uk/2/hi/business/7274385.stm [Accessed on 20th April 2018]
Becker, J., Bergener, P., Räckers, M., Weiß, B. and Winkelmann, A., 2010, December.
Pattern-Based Semi-Automatic Analysis of Weaknesses in Semantic Business Process
Models in the Banking Sector. In ECIS (p. 156).
Bénabou, R. and Tirole, J., 2016. Bonus culture: Competitive pay, screening, and
multitasking. Journal of Political Economy, 124(2), pp.305-370.
Bennett, R. and Kottasz, R., 2012. Public attitudes towards the UK banking industry
following the global financial crisis. International Journal of Bank Marketing, 30(2), pp.128-
147.
Berger, A.N. and Bouwman, C.H., 2013. How does capital affect bank performance during
financial crises?. Journal of Financial Economics, 109(1), pp.146-176.

17TALENT MANAGEMENT
Campbell, D. and Slack, R., 2011. Environmental disclosure and environmental risk:
Sceptical attitudes of UK sell-side bank analysts. The British Accounting Review, 43(1),
pp.54-64.
De Haas, R. and Van Horen, N., 2012. Running for the exit? International bank lending
during a financial crisis. The Review of Financial Studies, 26(1), pp.244-285.
Dhingra, S., Ottaviano, G., Sampson, T. and Van Reenen, J., 2016. The impact of Brexit on
foreign investment in the UK. BREXIT 2016, 24.
Fahlenbrach, R., Prilmeier, R. and Stulz, R.M., 2012. This time is the same: Using bank
performance in 1998 to explain bank performance during the recent financial crisis. The
Journal of Finance, 67(6), pp.2139-2185.
Fonseca, A.R. and González, F., 2010. How bank capital buffers vary across countries: The
influence of cost of deposits, market power and bank regulation. Journal of banking &
finance, 34(4), pp.892-902.
Gullone, E. and Taffe, J., 2012. The Emotion Regulation Questionnaire for Children and
Adolescents (ERQ–CA): A psychometric evaluation. Psychological assessment, 24(2), p.409.
Güngör, P., 2011. The relationship between reward management system and employee
performance with the mediating role of motivation: A quantitative study on global
banks. Procedia-Social and Behavioral Sciences, 24, pp.1510-1520.
Haldane, A., 2013. Constraining discretion in bank regulation. Central Banking at a
Crossroads, p.15.
Hsbc.co.uk. 2018. Welcome to HSBC UK banking products including current accounts,
loans, mortgages, credit cards. Also Premier and Advance banking and more…. [online]
Available at: https://www.hsbc.co.uk/ [Accessed 27 Apr. 2018].

18TALENT MANAGEMENT
Martin, R., 2011. The local geographies of the financial crisis: from the housing bubble to
economic recession and beyond. Journal of Economic Geography, 11(4), pp.587-618.
Saleem, S., Majeed, S., Aziz, T. and Usman, M., 2013. Determinants of job satisfaction
among employees of banking industry at Bahawalpur. Journal of emerging issues in
economics, finance and banking, 1(2), pp.150-162.