HRM Practices and Issues of HSBC Saudi Arabia - Case Study Example

RМ Practices and Issues of HSBC Saudi Arabia Name Institution One of the major growth components that have massively impacted the Saudi Arabian economy is the growth of the banking sector in the county. Apart from being one of the economic hubs of the gulf region, the Saudi Arabian banking needs and customer based has also attracted many foreign banking firms and even joint ventures. Founded in 2005, HSBC Saudi Arabia is also one of the banking firms that have highly impacted the economy of this oil-rich economy through its banking services and products. The bank was formed out of the joint venture orientation between the Saudi British Bank (SABB) and the HSBC, to form the HSBC Saudi Arabia Limited in 2005. Being formed as a limited liability company, the bank established itself as one of the fast growing banking firm in Saudi Arabia rating to a share capital of over SAR 50 million (an equivalence of US$ 13.33 million). With its headquarter in Riyadh, Saudi Arabia, HSBC Saudi Arabia has established itself as the first full service investment bank, and provide services like corporate finance, asset management, investment banking advisory, Islamic finance, equity research, security services, and brokerage services. HSBC Saudi Arabia has over 300 employees, and with its pace of growth, it is viewed as one of the best banking firms that promises better growth in the financial sector of the Saudi Kingdom. HSBC Saudi Arabia, like any other firm does no operate in the industry alone. The banking sector of the Saudi Kingdom does not operate under monopoly, but focuses on competitive environment and rely upon excellence and innovation. In its essence, HSBC Saudi Arabia is positioned as a one stop Saudi bank that offer full financial services to the respective customer target segments (Shoult, 2005). The bank, through its offers to the investment services, has segmented its market into individuals and institutional customers and also in terms of the corporate bodies as well as other SME’s that require customized financial solutions. Basically, HSBC Saudi Arabia draws much of its strength as being among the best banks in Saudi Arabia and also according to the Global Finance (O'Kane, 2011). The bank specializes in investment priorities and also in Islamic banking, the booming banking service in the Middle East. Although the company’ s suffering the threats of the political and regulatory changes in Saudi and the Middle East , the bank draws much of its opportunity based on its competitive advantage of large capital base. The major competitors of HSBC Saudi Arabia include the National Commercial Bank, The Al-Rajhi Bank, and Samba Financial Group (Shoult, 2005). Human Resource Management Practices in the Organization According to organizational psychology, successful organizations are mainly successful not only due to their market position and competitive advantages, but also due to the fact their human capital as their most important asset (Miles, pp. 22). The global pace has changed many organizations in terms of technological advancements as compared to years back. Learning in the management growth and development runs concurrently with the speed of change and consequently, the employees of every organization are adopting to the changes in the demands of their customers, skills and competencies needed as well as innovations to match their rivals. The human resource management is the basic strategic management of employees of the organization, to whom the responsibility of the achievement of the strategic goals and objectives depends on. Assuming that the employees of an organization are individuals with own mental maps and perceptions, own goals and own personalities and as such they cannot be perceived as a whole, HRM holds that the organization should be able to employ both individual and group psychology in order to create changes in employee commitments in the achievement of organizational goals (Miles, pp. 22). Every organization has its goals and missions to achieve through the direction, planning as well as coordination the available resources. Human resources management provides an organization with the effective and efficient work force that ensures these goals and the mission of the organization is achieved. In this case therefore, an effective human resource management system has a critical tool for bringing people together, the right number of people, with the right attitude and skills, in the right place, as well as at the right time (Kleynhans, 2006). Based on the reasons stated above, human resource have tools and activities that help individuals who are employed to possess all the necessary qualities required so that an organization becomes successful in its agendas. According to Caruth, & Pane, (2009), human resource managers consider job descriptions a valuable tool for HRM, but often they are poorly written. However, one of the major role and responsibility of human resource management is the job description and specification which must be very valid, which has the position and what it entails, duties and skills required, the minimum experience needed and many other details need for the task. Basically, firms such HSBC does not only aim at retaining dependable resources (labor) but also attracting them. Labor is one of the best resources that are essential for productivity. Labor can be energized through innovation and technology. However, direct human effort is the fundamental strength of labor input in general. One of the HSBC's strategic imperatives is to attract, retain and motivate the best people. Within its vision of being recognized as the best employer in the Middle East within the financial sector, according to Fitsell, et al. (2007), HSBC's values identify staff as a key resource, and is therefore, very committed to the recruitment of employees on merit and suitability, and encouraging them to realize their full potential while developing and rewarding individual performance (Shoult, 2005). The recruitment and identification of the best placed individuals to fit the given position, qualification is the first specification, but also based on the review of the potential candidates on the basis of vacancies arising in the future. Nationality is a factor to consider as many banks prefer Saudi nationality. However, based on the Human Resources Management criteria, many graduates in the related fields, with good mathematical reasoning, as well as fluency in Arabic and English are given an upper hand. The recruitment process is based on the role and responsibility of human resource management through job description and specification which must be very valid, and which has the position and what it entails, duties and skills required, the minimum experience needed and many other details need for the task. According to Fitsell, et al. (2007), in the absence of an immediate vacancy, qualifying applications are retained for 12 months. During this period, applicants may be contacted for interviews or proficiency tests. The process takes place in the event where an individual possesses the right credentials, motivation and the right attitude to be an active member of the organization becomes recruited. Career at the HSBC Saudi Arabia Limited, according to Jeffreys & Oxford Business Group (2011), is full of inspiration, motivation, self-actualization, and not only institutional development, but also individual development. The human resource department of HSBC Saudi Arabia Limited believes on the following core principles of resource management, culture, and practices; i. The development of individuals’ and organization’s global leadership management and international HRM capabilities ii. The use of coaching and mentoring in competency development, particularly of international HRM professionals and of international assignees/expatriate managers iii. The management of change from the international organizations perspectives and standards iv. Managerial ethics in an international context and also based on the Kingdom of Saudi Arabian ethical contexts Through the human resource management (HRM) department, HSBC Saudi Arabia Limited is not only a trusted provider of financing, strategic and investment solutions, but also offers one of the best human resource management practices that link the Saudi Arabian financial cultures and practices with the global financial practices. In this case therefore, it is true and relevant of the earlier assertion that HSBC Saudi Arabia Limited offer full service to institutional, societal, and individual development. Financial empowerment objective of HSBC Saudi Arabia Limited made the firm to be the first full-service, independent investment bank in the kingdom licensed by the Saudi Arabian Capital Market Authority (CMA). The HRM manages a team of around 300 experienced Saudi and international professionals, that offer a full range of services including advice on raising debt or equity to fund your growth, on mergers and acquisitions to expand your business and on asset management to maximize the return on investments. As this stands, it is a field of resource professionalism that has the local presence that connects with the local affiliate such as SABB and our global resources through the HSBC Group, to ensure the best global solutions structured for the Saudi market. The HSBC Saudi Arabia Limited HRM practices surround the following; i. career opportunities ii. consulting offers iii. new ventures iv. job inquiries v. expertise requests vi. business deals vii. reference requests viii. getting back in touch According to the sentiments of the management, HSBC Saudi Arabia Ltd is an example of organizations that help the world to focus on how human resource management contribute to the achievement of the organizational objectives within the stipulated methods and implementations. Without limiting the corporate culture and practices as described above, the human resource management of the HSBC Saudi Arabia deals with the issues in the firm that are directly or indirectly related to employee or the management for instance, compensation, hiring, performance management, organization development, safety, wellness benefits, employee motivation, communication administration and training. According to Fitsell, et al. (2007), the HSBC Saudi Arabia has a HRM team that function within the organizational focus and limits based on three aspects; recruitment, management and providing directions for the organization. Based on the feelings of the organizational leaders, managers, and employees, and according to reports from Fitsell, et al. (2007), the HSBC Saudi Arabia human resource management team has appropriated their function in achieving the following objectives with utmost apprehension and also in line with the company’s mission and shared values; i. Appropriate selection and identification of over all skills profile ii. Investment in training and development iii. Motivation and appraisal In terms of the strategic component of the company, reflecting values that make the firm to achieve its set goals strategically makes the firm to become very successful. In this view, the HRM section of the company has been very influential in implanting resource strategies that must be used to translate the strategies in to practical action. The planning and implanting these strategies are very important criteria that must be well organized in logical manner. Such is what the human resource management of the HSBC Saudi Arabia limited team does as reported by Jeffreys & Oxford Business Group (2011). Through appropriate selection that reflects the values of the company and also within the social ethical standards in Saudi Arabia, HSBC Saudi Arabia Ltd has highly depended on the human resource management in collecting and evaluating the relevant information about individuals before employment. The management, through Jeffreys & Oxford Business Group (2011), argues that just like any other selection process being done in a normal legal environmental constraints, the HRM team has highly help the management to boost its performance through better selection process. In the competitive business world of today, managers are very keen on increasing their performance through the improved performance of employees. Through the increasing aspects of these standards and criteria, managers depend on the appropriateness of the selection process, especially in the banking industry. According to Oxford Business Group (2007), increased performance increases the competitive advantage of the firm. HSBC Saudi Arabia depends highly on its employees to clink to its competitive edge of being the best banking firm in Saudi Arabian Kingdom. Customers, society, and other stakeholders rely heavily on the employees of the firm since they reflect the practices and objectives of the firms itself. Accordingly, the human resources management provides an organization with the effective and efficient work force that ensures these goals and the mission of the organization are achieved. In this case therefore, an effective human resource management system has a critical tool for bringing the needed number of people having the expected attitude, perceptions, as well as skills to work as one for the benefits of the organization (Miles, pp. 22). Based on the reasons stated above, human resource have tools and activities that help individuals who are employed to possess all the necessary qualities required so that an organization becomes successful in its agendas. Training of the employees is one of the major human resource functions that keep the employees with the constant changes that take lace in the market, considering the changing technological applications, competitors, and the customer changing taste and preferences challenges. As reported by the employees and confirmed by the human resource management, the selection process of employees of the HSBC Saudi Arabia ltd follows the following criteria; i. Considering the need of manpower in the company and advertising for the position in media, journals and newspapers ii. The management leaves the duty and responsibility of mentioning the skills and knowledge required for the post with the human resource department of the bank iii. The human resource departments is responsible for conducting interviews checking on the needed qualities, and responsibility after monitoring the application received and sort the apt candidate who posses all the skills and qualification required for the job iv. The interviews are conducted in steps that involves test conducted to all selected candidates to check the technical knowledge about the work they are going to perform. This is followed by the HR interview conducted to know more about the candidate and check whether the candidate is apt to the organization. In addition to that, there is group discussion that is effected to assess the behavior and commanding skill of the candidate. Finally, a final interview is conducted by the head of all the departments regarding the functions to perform in the bank. Challenges One of the major factors affecting many human resource managements in the modern world societies is the changing values of global financial economy and the changing aspects of the world business. although HSBC Saudi Arabia is marginally committed to using its financial prowess and the global network of experts in ensuring there is high growth of finance and investment in Saudi Arabia, there are far-reaching issues that does not only challenge the management status of the bank, but also the economic growth of Saudi Arabia. One of these challenges was and is the Euro-money issues that have highly impacted negatively on the capital marketing. The bank taking full advantage of its access to the capital market of Saudi kingdom is directly affected by this monetary backdrop. With the oncoming may 6-7th conference that focuses on effects of the Euro-money on the Saudi economy, senior banking leaders, representatives, managers as well as human resource manages are expected to tackle this issue. Meanwhile, it remains one of the challenging factors that negatively impacts on employment rate and therefore labor productivity. According to Miller (2013), many businesses have conflicting priorities considering the need to reduce costs in the operations of the organization as well as the need to increase employee engagements in the affairs of the firm. The duties of the human resource management range from functions to functions, majorly to increase the employee engagement in the affairs, success, and growth of the organization. The basic component of the HRM achievement is measured by the impacts of the human factors input into the success of the business. In this case therefore, the management and the human resource management operate between these conflicting priorities of the business organization, both the current and the future, despite the coming and going situations where these priorities fail to relate positively to each other. This may occur in situations where the role of the HR differs with the impacts. With the aim of achieving success in their respective businesses, the HR department as well as other and the departmental stakeholders of HSBC Saudi Arabia ltd have aligned business priorities for the future and the current business situations. Under the circumstances of the current economic climate, cost management of the business operations is a challenging factor for both the HR leaders and the Business leaders (Miller, 2013). In such cases, the HR is in tune with the rest of the business and understands the current environment in which its organizations are operating. However the persisting focus on cost management raises a tension for HR in terms of how it balances the immediate issue of cost control with simultaneously needing to put in place what the organization needs for its long-term health (Miller, 2013). However, the disconnection comes in handy with the perceptions of the HR’s impacts on the business performance in terms of the HR’s involvement in strategy and its use of metrics to demonstrate its contribution to achieving business objectives (Miller, 2013). The global economy of today dictates that companies must invest continuously in human capital. In close connection with this global situation, and also in connection to the role of the business partners, the human resource management department of the HSBC Saudi Arabia plans to closely work with other senior management to attract, hire, develop, and retain talent. Booming economies like that of oil-enabled economy of Saudi Arabia, normally experiences skills and workforce shortages, from the socio-economic and cultural challenge (Fitsell, et al., 2007). In this view therefore, the bank and its HRM department plans to focus its objectives towards the changing demographics, global supply chain, aging workforce elimination, and increasing global mobility. This department has more focus on its approach towards talent management to best harness talent. In the end, they will be positively positioned to succeed in this competitive industry, where banks like National Commercial Bank, The Al-Rajhi Bank, and Samba Financial Group Conclusion Employee motivation is a major factor and role in the human resource department that have real impact on the employee working mentality and productivity. In order to reflect these impacts to the performance of the organization (the bank), the Human Resource Management appraise and motivates the employees. This can be founded on the reflection of the larger section of employees who agrees on their commitment to the company. Critically, motivation and appraisals reduces the gap that exists in many firms between the employees and the management. However, as echoed by the employees of the HSBC Saudi Arabia, there is an easy link between the management and the employees since every body is viewed equal and have an equal share pertaining to the success and productivity of the bank (Oxford Business Group, 2007). The competitiveness of the banking services and product in Saudi Arabian kingdom stipulates that the performance of an organization must be well coordinated, strategically aligned with the principles of the targeted policies. This must be well reflected by the performances of the workers whose motivation and the will to work reflect the human resource management’s effort to alleviate them. Through work force planning, training and development, recruitment of long term employees, employee performance evaluation, and cost control, the human resource management is very clinical in ensuring that the HSBC Saudi Arabia ltd achieves its financial and social objectives and mission. Essentially, one of the promising sectors of the HSBC Saudi Arabia ltd is the human resource management that positions the firm to rate among the best financial institutions in Saudi Arabia, and also in the world. Through proper implementation of the human resource management strategies, the HRM has taken the firm into new level of customer banking that relies on the cultural orientation of the Saudi society and also the world. This has been made possible by making sure that employees are properly trained to achieve their targets both in the short run and also in the long run. The employees are very motivated and appraised and thus become innovative and highly productive as well as basing their commitments to the bank policies. Finally, the HSBC Saudi Arabia ltd has achieved a major role in their customer's satisfaction in the competitive industry that has banks like National Commercial Bank, The Al-Rajhi Bank, and Samba Financial Group, banks that have cultural-base advantage than HSBC Saudi Arabia. References Fitsell, T., Williams, R., & Hongkong and Shanghai Banking Corporation. (2007). HSBC's guide to cash and treasury management in Asia Pacific 2008. Hong Kong: PPP Co. Ltd. Grunor, J. A. (2009). Enough to make you sick--: Tainted counterfeit imports!. New York: iUniverse. Jeffreys, A., & Oxford Business Group. (2011). The report. London: Oxford Business Group. Kamso, N., & Ng, T. M. (2013). Investing in Islamic funds: A practitioner's perspective. Singapore: Wiley. Miles, A., (2013). Agile Learning: Living With the Speed of Change. Development and Learning in Organizations, Learning Content Journal, Lumesse, Brighton. Vol. 27 (2); pp.20-22. Miller, J., (2013) Views from the Top: A variety of Leaders perspectives on HR’s business impact, Strategic HR Review, Volume 12, Issue 4. O'Kane, M. (2011). Doing business in Saudi-Arabia. Lexington: Al-Andalus. Oxford Business Group. (2007). The Report: Emerging Saudi Arabia 2007. London: Oxford Business Group. Ramady, M. A. (2010). The Saudi Arabian economy. New York: Springer. Shoult, A. (2005). Doing Business with Saudi Arabia. London: Blue Ibex Ltd. Read More