diversity and change work

HSBC launched a transition campaign in 2015, deciding to downsize its existing staff by 50, 000 jobs and divest a portion of the company in order to concentrate on the Asian market. The action was to last two years, from 2015 to 2017. (Arnold & Pickard, 2015). The move that would see 8000 workers based in Europe and others in other host countries lose their jobs was viewed by the bank's strategists as a move that was to help the bank save $5billion annually by the end of the two years. The action announced by the bank would comprise selling of the HSBC outlets in Brazil and Turkey that would reduce the workforce by 25,000 employees. Bray (2015) in his report highlighted that the next course of action was to reduce the number of workers in the retained outlets by between 22,000 to 25,000 job cuts. This analysis will explore the 2015 decision with the focus on the layoffs of the 8000 workers in the main branch in UK.
The bank made the decision to shrink the poorly performing outlets in the Europe and America markets and focus those resources on the worthwhile Asian market. The target market by the HSBC Asian move was the River Delta developed region in southern China (Bray, 2015). The move was viewed as strategic in restoring investors’ confidence in the bank’s management having been on the news with a series of scandals and a rising and falling compliance cost. Riley (2015) argued that the move by HSBC was following the recent global trend that has seen several companies in different industries increasingly getting a connection with the Asian market, especially in China and India. HSBC management expected the actions taken in this change program to help the bank capture anticipated future growth opportunities and in turn deliver value to the investors.
Internal and External Elements that Influenced the Change Program
The internal factors within HSBC Bank that influenced the change comprised reduced profitability in the recent years that the company management attributed to the high costs of operations (Riley, 2015). The rising cost of operation was as a result of several factors like labor costs inflation rates, exchange rates and interest rates among other factors. Amongst the leading factors that pushed the cost of operation higher, the cost of labor is the factor management has control over. HSNC bank has not been performing well in some parts of South America, and Europe that affected the company’s profitability and the management deemed it necessary to shut down those branches (Riley, 2015). The underperformance of the bank's outlets influenced the selling of the outlets in South America located in Brazil and the European outlets in Turkey. The selling of the two branches would see 25,000 workers lose their jobs.
An external factor that influenced the change program included the increasing focus and business inclination to Asia. Asian is on the rise forming one of the fastest growing and slowly becoming the biggest economy globally. According to Flavelle (2015), HSBC management had planned to accelerate the company’s investments in Asia that involved an expansion of the asset management and insurance business with the intention of fetching more profits from the Asian market that is rapidly expanding the class of the freshly wealthy group. Flavelle (2015) further explained that the expansion of the company’s presence in the Asian market necessitated downsizing of the existing business in Europe to allows for a refocus of the assets to the Asian market.
Strategy
The main strategy the company employed to limit the effect of the layoffs was spreading the process to last two years to allow time for adjustment (Benn, Dunphy and Griffiths, 2014). Change programs that affect the normal operations of a company need well-thought strategies not to risk having the company’s operations halt in the process of implementing the change. HSBC bank’s change program comprised two actions first selling out the underperforming branches in South America and Europe and the second action being laying off some workers as a means of lowering the cost. Laying-off of workers affects the normal operations of a company (Benn et al., 2014). HSBC in cautioning against the likely effects on the normal operations of the company had the strategy of spreading the laying off process to a span of two years to allow time for adjustment. The two years was to create time for the employees who were retained to adapt with the additional roles. The company had programs for compensating the workers who were laid off to avoid public condemnation and court battles that would affect the reputation of the company.
Challenges
Players in the financial industry have been hit by the falling economic trends across the globe that reduced bank’s profitability significantly and augmented investor pressures (Bray, 2015). Several banks and not only HSBC had considered downsizing their operations to lower their cost of operations since that is one of the factors under their control. The move by HSBC to sell out some of its underperforming branches and cut on the number of employees was a right move in company’s efforts to reduce the cost of operation (Flavelle, 2015). However, the move was not to go on smoothly without creating hitches within the organization. The first challenge was the looming scarcity of talent since the company had to send home a considerable number of employees and to adjust with the remaining employees must take time.
The second challenge is dealing with the existing staff. Any news on downswing creates unnecessary instability amongst the retained staff, killing their morale and creates fear of the unknown. Besides, branches like HSBC Canada had their employees unsettled for a while since they were not sure if the management would make a decision to sell or shut down the Canadian Branch (Flavelle, 2015). The change program affected the normal operation at the organization that in turn affected its profitability. The other effect was public outcry and condemnation of the massive layoffs that damaged the bank’s global reputation. The 2015 layoff was arguably one of the biggest in the history of the bank.
Part 2
Implementation, Resistance of the Change Management Approach
In HSBC Employees Perspective
The global banking industry is faced with several needs for change that is driven by both external and internal forces. The external forces are often beyond the control of the banks, but the internal forces are dependent on the internal structures of the bank that can be changed by the executive. HSBC was faced with the challenge of low profits that was mainly pushed by the global trends in technology, oil prices, exchange rates and interest rates. HSBC management identified one internal factor that contributed to the increasing fall in the company’s profitability, and that was the cost of operation. Langley, Smallman, Tsoukas and Van de Ven (2013) added an important point that HSBC’s cost of operation was mainly pushed by the high number of employees. The company deemed it reasonable to cuts down the number of employees to help the company cut down on the cost of operation. Making changes before enforcing is important in helping the company gain competitive advantage.
HSBC is among the largest players in the banking and financial industry in the world. As the bank is progressively embracing the global markets, its workforce becomes gradually more disconnected from the organization and from each other. According to deliberations by Georgalis Samaratunge, Kimberley and Lu, (2015), the move by the bank to restructure its scales of operation by significantly reducing the number of employees did not come at a better time. Marcus (2014) contributed to this discussion adding his idea that the disconnection between the different sections of the bank due to the geographical separation makes its complex for the employees to adjust with the reduction in their numbers. An employee may be forced to take up a role in departments that the employee might not understand. HBSC Company strived to create environments that allow its workers to feel free to speak their mind on any pending change program.
Change can be challenging and can face resistance from the employees like for the case of the change program HSBC implemented that had a direct impact on the employees. Skillful planning and implementation of change are important. According to Cummings & Worley, (2014), the main phases of the HSBC employee cut change program included driving the change, prioritizing change, preparing for change, selling the change, implementing the change. Cummings & Worley (2014) explained the relevance of the different stages stating that they are for making the affected or interested parties understand the proposed change, make their contribution to necessary change if any and participate in the implementation process.

Theoretical breakdown of the Change Management Approach
The process with which HSBC management implemented the change program that entailed cutting down on the numbers of employees by 50, 0000 with 8, 000 in the UK branches cane be linked to the Kurt Lewin change model (Flavelle, 2015). Lewin proposed a three-stage model in which the first stage is unfreezing stage, followed by change and them refreezing. The unfreezing stage in the HSBC change program is the stage in which the company prepares for change. According to Langley et al. (2013), the company evaluated the crucial needs at the moment; the management made several deliberations on the best options to have the company reduces its cost of operations. The company later determined that the two options with its powers are to lay off some workers and shutting down outlets in regions that are underperforming and channeling the resources to the Asian market that is actively expanding (Flavelle, 2015). The bank’s management in consultation with the strategic bank advisers deliberated and concluded that the move would save the company $5 billion every year.
The change stage as explained by Lewin is the actual implementation of the options identified in the freezing stage. According to Lewin, the change phase often takes the time to happen since people usually take some time to embrace the new system, changes or developments (Bray, 2015). The management provided a period of two years to have all the layoffs done. Lewin explained in his model that at the change stage good leadership and reassurance is significant to have a smoother process. According to Flavelle (2015), the important tools at the change stage are communication and timing to sure the process is successful. The management of HSBC must ensure the employees who are retained to continue working in the company are assured of their job security to restore their confidence since in the event of layoff the other employees get scared that they might be on the line. Bray (2015) further discussed the third phase in the Lewin theory is the refreezing stage that comes after implanting the change, and the company stabilizes again. In the change program at HSBC, the change phase is set to end in 2017 and the refreezing phase thereafter.
Managing Change
The change program of the HSBC Bank can be divided into stages as discussed below.
Driving Change
This stage involves identifying the need for change; the bank identified the trends in the global market and determined that the Asian market and specifically China was providing rich ground for banking services (Craig, Nevin, & Odum, 2014). The management also identified the wasted resources in running the outlet in Brazil and Turkey, and the company earned little returns from the outlets. The bank then communicated the intended change. Craig, Nevin, and Odum (2014) further elaborated their point with the argument that the change implementers in the organization must recognize the relevance of the people working in the organization by providing continuous training and development to ensure they get most out of the team retained. The management team must hold discussions with the workers to understand the impending change, discuss the aspects that will or may affect the normal roles various employees play in the organization and the need to make adjustments or replacements.
Factors Driving Change
There are a number of factors that can cause the need for change in the financial sector. The factors are in two groups that are internal factors and external factors. Riley (2015) explained that the internal factors within HSBC Bank that drive the change are the reduced profitability in the recent years that the company management attributes to the high costs of operations. The rising cost of operation is as a result of several factors like labor costs, inflation rates, exchange rates, and interest rates among other factors. Riley (2015) added that external factors that influenced the change program included the increasing focus and business inclination to Asia. The Asian economy is on the rise creating one of the fastest growing economies and slowly becoming the biggest economy globally.
Prioritizing the Change
Organizations will always be presented with several areas that need change, and i thatf an organization decides to have changes they must be in the order of priority (Hickson, Miller and Wilson, 2003). The rise in the cost of operation and the need to focus on the Asian market were the two main reasons why the bank wanted to implement the change program. One option the company was considering was selling the bank outlets in Brazil and that in Turkey to cut the number of employees by 25, 000 and then another 25,000 cut from the banks that were to remain in operation. The management prioritized the changes depending on the ease of implementation. The first priority was the selling of the two outlets since the process demanded fewer procedures compared to the change that required reducing the number of employees in outlets that were still in operation. The second option that was reducing the number of employees in the branches that were to remain in operation, this option comes in second in the order of priority because the change required a gradual process to have the system adjust to save the bank from the risk of halting its operations.
Setting the Change and Managing Resistance

The most baffling and obstinate of the various challenges that organizations face in the process of change management and implementation is the problem of employee resistance to change (Lundy & Morin, 2013). Employee resistance can be manifested in a number of forms like requests for transfer, reduction in output, increasing cases of employees quitting their positions, bad-tempered hostilities and continuous quarrels in the office. The change implemented by HSBC was, without any doubt, likely to attract several resisting forces among the employees. Employees were likely to oppose the change seeking to reduce the number of employees since the normal operation would have to continue and the only way the company was to make-up on the positions left behind by the employees laid off was giving extra duties or extra working hours for the remaining employees.
Companies before commencing the process of change implementation must have strategies for managing resistance in case it arises (Marcus, 2014). Some of the major strategies that HSBC could apply to help manage employee resistance was first to have the employees being part of the change process; the management should make the employees understand the reason behind the decision by the company to downsize and the criteria the company used to lay off this is to help clear any suspicion of favoritism. The second strategy is to understand the true nature of the anticipated resistance. Lundy & Morin (2013) added another argument that the company needs to understand the concerns of the employees that are retained to work in the various branches of which other employees were laid off.
Resistance often comes because of certain attitudes and blind spot on the side of the employees because of some preoccupations in their technical features (Marcus, 2014). The company must come up with measures for addressing the grievances of the workers retained in the various outlets. Some of the strategies that the company may use are having rewards for extra duty covered and any extra hour worked because of the additional responsibilities (Lundy & Morin, 2013). The company executives must take the initiative to engage directly with the staff members to encourage them to do their best to maintain company stability irrespective of the employees laid off.
Reasons for Resistances
The employees at the HSBC Bank would reject the proposed changes for a number of reasons. One of the major concerns was the issue of loss of status at the company or job insecurity (Lozano, 2013). If the organization is laying off employees no employ is likely to support the idea. Lozano added other details to the discussion stating that the retained employees would not support the change program since that sends a message that the remaining employee would too be on the line in the near future. The proposed change would also be rejected by the employees since they will have to carry out extra duties that can overlap into extra time that the company may not willingly compensate.
The non-reinforcing reward system, HSBC were reducing the number of employees but maintain the normal operations. This had the implication that the remaining employees will have to undertake extra roles. HSBC just like any other company will in most cases fail to reward the worker an extra pay for the extra job done (Appelbaum, Degbe, MacDonald & Nguyen-Quang, 2015). Fear of the unknown is another reason for the employees to reject the proposed changes. The employees may be scared to continue doing their best at the company since they may fail to understand the reasons behind the layoff. In such cases, the employee's output reduces since they are not sure of their future at the company. According to Watson, (2013), Organizational politics often stand opposing grounds in terms of the proposed changes. Organizational politics create tension that may influence the management to reconsider an earlier decision.

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