HSBC may be about to decimate its headcount in offshore technology locations, but this could ultimately mean more jobs for IT professionals in more developed financial centres.
The bank has cut over 6,000 IT staff since announcing its cost-cutting measures last year, according to a report in the Financial Times, and could make deeper redundancies as it moves away from captive offshore centres and towards an outsourced model.
This is something of an about turn for HSBC, which has been increasing offshoring since 2011, when it said that 40% of technology headcount related to its investment bank would be based in cheaper locations.
“HSBC is effectively following other banks and moving away from huge captive offshore technology centres and using third-party outsourcing providers,” said Martyn Hart, chairman of the National Outsourcing Association. “Usually, outsourcers spread IT development across locations, and wholesale banking IT development work is conducted in locations close to the front office in places like London and New York. This could be beneficial to IT jobs in Western locations, albeit not directly connected to the bank.”
HSBC has about 20,000 technology staff working in eight offshore centres in India, China, Brazil, Malaysia, Poland and Canada. Despite the fact that it’s likely to rein in its offshore centres, recruiters suggest that its Guangzhou, China technology centre has been the focus on much of the hiring in recent months and its careers centre suggests that there are still plenty of jobs there.
Nick Mayes, head of research at Pierre Audoin Consultants, said that move towards outsourcing over offshoring inevitably means some redundancies, but third-party outsourcers also bring in the banks’ own talent. “The big outsourcing providers are have got very well-oiled HR machines, and they’re much better at attracting, and importantly retaining, technology staff in places like India where there’s a very competitive labour market,” he said.
HSBC is likely to offset some of the job cuts by hiring for mobile banking projects in the future, suggests the FT. Recruiters in London are seeing few signs of this currently, however, and there are just four current vacancies related to mobile banking globally. If this does take off, though, there will be some roles created in major financial centres, said Mayes. “Typically, 70% of the work is carried out offshore, with the remaining 30% onshore near to the bank’s headquarters,” said Mayes. “The front end, digital transformation is carried out close to home, and the more generic programming work is carried out by cheaper offshore resources.”
HSBC didn’t respond to requests for comment.
It’s also worth noting that technology recruitment is still relatively active in the City at HSBC in certain areas. Its Client Onboarding and Account Maintenance is hiring architects, project managers and technical business analysts, suggest recruiters , while its Central Change Delivery unit, which is looking to standardise technology projects, is hiring PMOs and project managers.