Finance

HSBC hikes junior pay and kicks off hiring spree amid deal surge

HSBC is increasing salaries for junior bankers, expanding recruitment and accelerating promotions in the latest efforts from a large investment bank to combat burnout among younger dealmakers.

The UK lender has outlined a series of measures aimed at reducing workload for juniors amid a surge in deals, as well as offering more perks to retain younger bankers as rivals step up recruitment, according to a memo seen by Financial News.

“Our objective is clear: we want to attract, develop and retain individuals who value our diverse, inclusive and high-performing culture,” the memo from HSBC’s senior bankers. “We will do this with an overall employee value proposition aligned to competitive dynamics and to our strategy.”

HSBC is ramping up recruitment of juniors, saying that it will also streamline hiring processes to ensure that analysts and associates are more supported. The bank is also increasing salaries for analysts and associates in key locations including the UK, US, Singapore and Hong Kong, although it has not yet specified the size of the rise.

It will also start a new ‘GB Junior Anonymous mailbox’ for bankers to share their feedback.

READ UBS starts new bonus for juniors as banks look to combat burnout

The UK lender is the latest big investment bank to tackle junior employee burnout amid record deal flow that has pushed an already demanding role into 100-hour plus weeks. UBS unveiled a additional bonus for juniors last week, FN revealed, while JPMorgan’s new programme includes plans to add 190 new analysts and associates globally.

Credit Suisse offered its junior bankers a one-time ‘lifestyle’ bonus of $20,000, while Bank of America has hiked salaries by up to $25,000 for its analysts, associates and vice presidents.

HSBC will also accelerate promotions of associates – those on the second rung of the investment banking hierarchy – from its current programme of four years for those in the US, UK, France UAE, Singapore and Hong Kong.  “Associates with three years’ experience will now be considered for promotion to AD/VP, enabling our best performers to progress more rapidly,” the memo said.

The move towards increasing perks for juniors follows a leaked presentation by a group of 13 Goldman Sachs analysts in June, outlining 100-hour working weeks, rising mental health issues and threats to quit the industry. The US bank has responded by increasing junior recruitment and enforcing existing working restrictions, but has yet to hike pay or roll out new perks.

READ JPMorgan to hire 190 juniors as banks rush to ease stress and workload crisis

JPMorgan also resisted paying its junior staff more, saying during a townhall meeting last week that it sent out the wrong message.

Investment banking analysts and associates contacted by Financial News over the past year have cited the Covid-19 lockdown restrictions as exacerbating an already stressful role as senior bankers dropped work on them at the last minute, and expected them to be online at all times. Meanwhile, working in often cramped apartments has added to mental health problems.

READ ‘I work from 8am to 2am’: The lockdown life of overworked and underappreciated junior bankers

As well as recruitment and pay, HSBC will overhaul some of its working practices for juniors. Pitchbooks – marketing documents for deals – will be restricted to 25 pages, while it will enforce existing policies of protecting weekends from work.

“We know that the past year has been extraordinarily challenging for many of you; we appreciate tremendously your resilience and perseverance – and how you have supported our clients and colleagues,” the memo added.

To contact the author of this story with feedback or news, email Paul Clarke

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