☰ Menu eFinancialCareers

A simple test that will tell you whether you are going to lose your job

One, two, three, four, five...

One, two, three, four, five...

Rare is the bank that is not undergoing some sort of cost cutting procedure in the current market. Credit Suisse, Barclays, HSBC, Nomura, UBS and even Deutsche (which purports to be seizing market share and seems to be hiring) are in the grips of efficiency programmes aimed at driving down costs. 

Some are doing so with the assistance of management consulting firms. Hence, McKinsey has been much in evidence at RBS, while HSBC has gone for Boston Consulting Group (BCG) to help it save $3.5bn by 2013. 

Yesterday, the Sunday Telegraph offered an important insight into how BCG plans to extract these costs at HSBC. The industrious consultants have apparently been going about counting the layers of management between the most junior member of staff and CEO Stuart Gulliver. At worst, they unearthed 17 levels of intervening management. In future they have dictated there must be no more than 8.  

“Every manager must have  at least eight direct reports. We found many instances of two people reporting to one, and several instances of one person reporting to themselves,” Gulliver told the paper.

It’s worth noting that Citigroup underwent a similar programme in 2008, when it dictated that everyone should be no more than, “nine steps to Vikram,” and cleared out middle managers who were preventing this from happening.

BCG says best in class companies have 6 levels of management between the most junior and the most senior staff. Rightly or wrongly, counting levels of management provides a quick and quantifiable route to organisational rationalisation. If you’re a middle manager in a bank with more than 7 tiers between the top and the bottom, you should therefore fear demotion – or redundancy.   

Comments (1)

Comments
  1. Eight degrees of separation? That’s just a ‘Management Consulting Excuse’ for a big cull. Nah. Much easier than that. Just see if the HR drone looks you in the eye. If not, dust off the CV.

The comment is under moderation. It will appear shortly.

React

Screen Name

Email

Consult our community guidelines here