HSBC, UK: Increasing the labour market participation of underrepresented groups – women
HSBC, a major bank in the UK, has taken a number of initiatives in recent years to increase women’s employment levels and improve their representation in management. The measures cover flexible working hours and childcare. HSBC is the first company in the UK to offer all its employees either a childcare facility or assistance with childcare costs through vouchers. The company’s policies have been recognised with awards from the Working Parents Campaigning, Research and Advice Organisation and the 4Children Child Care and Family Support charity.
HSBC Holdings has 253,000 employees in 77 countries and is one of the largest companies in the UK with about 57,000 employees. Its main activities are retail and commercial banking and it runs a nationwide branch network and provides 24-hour banking phone and internet service through its First Direct subsidiary.
As with other banks in the UK, women make up the majority of the workforce (62%) but most senior managers are men (86%). The bank has been introducing a wide range of policies, not just to make it a more attractive employer to women, but also to help women make greater progress into management positions.
There is a long-established collective bargaining and trade union representation structure within the bank involving the trade union Amicus at the local and national level.
HSBC began developing its childcare policies in the late 1980s before the current Labour government began work on its 10-year childcare strategy. The government’s aim is to increase significantly the number of childcare facilities available. An important part of the government’s strategy is making childcare more affordable and it has introduced measures to enable employees to save on tax and national insurance contributions when paying for childcare.
Description of the initiative
HSBC Holdings emphasises the need to have a diverse workforce that reflects the many different communities in which it operates around the world. This includes the need for the workforce to have the right gender balance. The bank tries to ensure that this is a key issue for senior managers. The managers are required to demonstrate an understanding of the need to create diverse teams, and to have a positive attitude to work-life balance and flexible working practices.
There is a wide-range of family-friendly policies implemented by HSBC, but its childcare scheme, now available to all employees with children, is what separates it from other employers.
HSBC (formerly Midland Bank) in the UK has been a leading company in terms of childcare provision since the late 1980s. Partnerships were established with nurseries around the country to provide subsidised childcare facilities for the children of HSBC employees. The first nursery was opened in Sheffield in 1989.
Aware of the high costs of recruiting and training new workers, the bank had been monitoring the rate at which women returned to work after maternity leave. Research showed that childcare assistance in some instances raised the rate of return from 30% to 80%. The bank decided that help with childcare provision would contribute to reducing the estimated £18 million a year spent on replacing women who didn’t return after maternity leave.
There was a very high demand from employees, with long waiting lists for the facilities. Following a survey of employees in 2004, the company decided in 2005 to increase the number of facilities available and to offer childcare vouchers to all 28,500 UK employees who currently have children under the age of 16. This means that the scheme is straightforward and there are no longer complicated rules about eligibility. It also covers more families as the previous scheme only provided help for those with preschool children.
Currently, there are 450 HSBC designated nurseries, where employees have access to a subsidised place for their children. In addition, there are 1,800 places with discounts of 5% or 10% depending on which chain of nurseries is used.
Vouchers can be used to pay for childcare for children up to age 16, through a variety of registered or approved childcare options. The options include nurseries, child minders, nannies, au pairs, out-of-school schemes and holiday play schemes.
The scheme operates under a system in which employees allocate a part of their existing salary to the scheme in order to take advantage of the savings on tax and national insurance contributions. Childcare fees are then paid directly from the employee’s gross salary and are thus free of tax and insurance payments. The only rules are that the worker has to be a parent and an employee of HSBC UK, subject to tax and National Insurance.
The tax and NI-free option has been available since April 2005 and the government increased the amounts applicable to £55 a week (from £50) and to £243 a month (from £217). So it is up to the employee how much of their salary they allocate to this scheme, up to the maximum amount.
A website has been set up to explain the childcare arrangements and to enable employees to register and manage their account online. There also is a newsletter, which keeps employees up-to-date with changes to the scheme and other developments of interest to working parents.
HSBC has promoted the benefits of childcare provision by making it a high-profile part of its equality initiatives. HSBC supports outside organisations, such as the Daycare Trust charity, in the work they do around childcare and policies for working parents.
The combination of childcare provision and the option of flexible working hours, particularly the possibility of working part time, have contributed to a large increase in women returning to the company after maternity leave, up from 30% in 1988 to 85% in 2005. As well as saving on recruitment and training costs, this means that the bank can rely on the experience and knowledge of women workers who are already familiar with the company.
Although the childcare policy is the most high-profile part of HSBC’s equality initiatives, the company also offers a range of flexible working options to help working parents achieve a better work–life balance through part-time work, job sharing, flexible start times and working from home. Apart from the standard forms of leave – maternity, paternity, adoption and parental leave – HSBC also offers the option of an extended sabbatical with up to five years of unpaid leave, although this does not guarantee a return to exactly the same job.
The company also funds an internal network for working parents, which enables employees to get together to discuss how the bank’s policies are working and how they might be improved.
Exemplary and contextual factors
HSBC is exemplary in its policies for working parents, particularly for the lead it has taken in offering subsidised nursery places to employees, now supplemented with childcare vouchers that are available to all employees. Childcare provision is supplemented with flexible working options that help employees achieve a good work–life balance, allowing the company to achieve a marked reduction in turnover of experienced staff.