HSBC axes 160-year-old management scheme in bid to cut costs

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HSBC has closed a prestigious fast-track management programme that dates back to the bank’s founding 160 years ago, in the latest cost-cutting effort at Europe’s largest lender.

The “International Manager” programme, a legacy scheme set up to develop the next generation of HSBC executives, had been closed to new recruits, according to people familiar with the matter.

HSBC has no plans to add new managers to the programme, which counts among its alumni former chief executives Stuart Gulliver and John Flint. Employees who already have an “IM” designation would keep it, one of the people added.

The decision to stop hiring for the programme was finalised after chief executive Georges Elhedery took the helm last year, said one person familiar with the decision. The scheme was also paused during the pandemic, they added.

The international manager programme was designed to promote generalists within the bank who could move around the international network, conferring a sort of diplomatic status on recruits. International managers were once seen as crucial to maintaining a single working culture around HSBC’s sprawling global business.

International managers, who were once known as “International Officers” and before that as “Eastern staff”, have an elite status within HSBC that has often been reflected in the benefits they receive, such as a tax-free salary, housing allowance and a generous pension.

There are estimated to be fewer than 100 people on the programme left within the bank, according to people familiar with the matter.

Some senior executives have come to see international managers as a relic of a bygone era that created a division within the bank, they said. “HSBC employees don’t need this special status,” said one person familiar with the programme. “There is this snooty attitude and haughty air attached to being an IM,” they added. 

Elhedery was among those who disliked the division between international managers and other staff, said another person familiar with the matter. 

He has sought to reshape the sprawling lender since taking the top job last September, carving the bank’s operations into four units and embarking on a cost-cutting drive that he has promised will deliver $1.5bn in annual savings.

“As we focus on serving customers, supporting colleagues to develop global experience is a key element of our talent strategy,” HSBC told the Financial Times. “We have international managers deployed in markets across the world with over a third of these moving to new assignments this year.”

HSBC stepped up efforts to recruit international managers in 2010 and aimed to have about 600 within three or four years. Successful candidates would complete four weeks in its London headquarters and then were assigned new roles and countries every 18-to-24 months.

“Our [international managers] represent a small proportion of HSBC Group employees, but they are expected to make a big impact,” the bank wrote in a 2010 brochure. “We recruit globally and look for outstanding individuals who have already driven themselves to achieve and have the talent and ambition to reach the highest levels of international banking.”

According to the book The Lion Wakes that charts the history of HSBC, traditionally international officers “had been to public school (but usually not one of the elite public schools), was not a graduate, and enjoyed playing rugby”. In 1977, shortly after the bank started hiring graduates, there were 341 such managers — all men — just over half of whom were based in Hong Kong.