1. Introduction Chapter1.1 Introduction

The nature of the Business environment and Manager Job

has been changed a lot in the last decades. Fierce

competition in the market demand a very strong Human

rescores along with the quality product and services. One of

the major concerns for organizations is to hire efficient

employees. Today's workers have different expectations

from the companies and less hesitant to leave one job for

another if they don't feel those expectations are being met.

In fact, many employees see job skip as an opportunity for

advancement.

Surprisingly, most people do not leave their jobs only for

money. While money usually plays some role in a person's

decision to leave a company, it is not normally the deciding

factor. Insufficient management support is one of the major

reasons of employees leave.

It is expensive to lose good employees. There are some

important issues which organization should consider. Like

the costs of termination, the cost of hiring and training a

replacement, the vacancy cost until the job is filled and the

loss of productivity with a new hire. These staggering

figures should be motivation enough for owners and

1

managers to begin to focus on retaining their best

employees.

1.2 Origin of the report

This report has been prepared as a requirement of the

Internship program of School of Business of Independent

University. HSBC Bank (The Hong Kong Shanghai Banking

Corporation) is the place where I have gathered experience

about the operations of the financial institution. The

organization has been extremely helpful in acquiring

knowledge regarding various aspects and daily banking

activities. This report is the outcome of three-month

internship program. The research has been conducted

under the supervision of Mr. Sheikh Shiblee Sadek and

Ansara Chowdhury from HSBC Bank and Mr. A. Qaiyum

Chowdhury from the University, has also approved the topic

that I assigned for my internship report.

1.3 Statement of the problem

Banking sector is one of the fast growing industries in

Bangladesh. Beside the local Bank, many foreign banks also

2

operate here to provide the service. Because of the strong

competition the banks are continuously innovating new

ways to attract and satisfy their customers. So, they are the

first to interact with customers and have a huge impact on a

customer’s impression of the institution.

Employee turnover, now-a-day is a common problem every

where. A bank may face problems when its employee

turnover rate is increased. Turnover levels vary from

industry to industry, region to region. It has many reasons;

sometimes it is the attraction of a new job in a different

company that “pull” them out of their current organization,

hence on other occasions they are 'pushed' due to

dissatisfaction in their present jobs seek alternative

employment in other company. Sometimes it is a mixture of

both “pull” and “push” factors.

The level of employee turnover varies from hiererchy to

hierechy and organization to organization and accordingly,

the impact of such turnover also varies. Everything depends

on the type of labour markets in which it compete. Where it

is relatively easy to find and train new employees quickly

and at relatively little cost, it is possible to sustain high

quality levels of service provision despite having a high

turnover rate. Employee turnover is a great problem when it

bears costs. Like—

Employee recruitment costs

3

Employee selection costs

Cost of covering during the period in which there is a

vacancy

Administration of the recruitment and selection

process

Induction training for the new employee.

Leak of business informatio/secrecy.

Therefore, in the above scenario it is found that an

internationally reputed bank likes HSBC is also not an

exception. Hence through the research I have tried to know

the reasons of employee turnover in HSBC (CGE branch).

Also I have tried to find out relevant information about

employee turnover.

1.4 Objective of the research:

The objective of the research is- “Identify the reasons of

employee turn over in HSBC”

Specific objectives

To identify the causes of employee turnover.

To suggest solution of employee turnover.

1.5 Methodology:

4

1.5.1 Sampling Plan :

Population – All employees of HSBC bank in

Bangladesh.

Sample Unit--- employees of HSBC bank in CGE

(Nasirabad) Branch, Chittagong.

Sampling type: Non Probabilistic Sampling.

Sample technique: Judgmental Sampling.

Sample size: 30

For selecting employees judgmental sampling has been

used and selected 30 employees from 56 for the sample

unit. All the respondents are the employees of HSBC

bank CGE Branch, Chittagong. To ensure representation

responses have been collected from different layers of

management.

1.5.2 Methods of Data Collection

The report is composed of both primary and secondary

sources of data.

Primary Data :

Primary data may be collected by the following two tools.

5

1. Questionnaire Method.

2. Direct Interview Method.

Data have been collected through questionnaire from the

employees of the Bank. Primary data have been also

collected by informal interview with the officers. Structured

questionnaires were used to collect information from the

bank employees.

Secondary Data :

The secondary data have been collected from the

“Employees Job Enlist Record” of HSBC Bank, and from

some journals. Also some important information is collected

form Internet for the report.

1.5.3 Method for Analysis:

In order to analyze and interpret data some tools of

statistical analysis has been used .The statistical tools to be

followed are –

1. Mean.

2. Percentage.

3. Cross tabulation

1.5.4 Survey period

The survey is being conducted from March 10th to April 15th

2008.

1.6 Scope:

6

The scope of the report is limited to all the personnel of

HSBC CGE Branch. The report will explore the reasons of

employee turnover in HSBC.

1.7 Limitations:

Objective of the practical orientation program is to have

practical exposure for the students. Our tenure was for only

three months which was some how not sufficient for

analyzing such a matter. Moreover, it was too difficult for

me to give time for preparing this report after working

whole day in the bank.

Some limitations and inconvenience had appeared as

barriers in accomplishing the report. These are as follows:

The study is confined only to HSBC Bank CGE

(Nasirabad) Branch.

The information that collected through questionnaire

survey and direct interview could be imprecise

because of the biasness of the employees.

As the topic is very much sensitive so, unwillingness

and fear among most of the junior staffs on disclose

any opinion towards their boss.

Some variation in views among the amateur and

experienced personnel.

Insufficient time period.

7

Because of the limitation of information, some

assumptions were made. So, there may be some

mistakes in the report.

8

2. Organization overview

HSBC is a truly unique financial institution that delivers

superior growth and financial performance and be the most

recognizable brand in the financial services in Bangladesh

& worldwide. Through an international network & rapidly

growing capability HSBC has achieved a strong competitive

position over other banks in Bangladesh. It creates new

opportunities for its clients by offering customize services

and maintains harmonious banker-clients relationship. It

contributes towards formation of national capital, growth of

savings and investments in trade, commerce and industrial

sectors.

At HSBC people realize how busy the customers are in

today's fast-paced world. To make the life simpler, they

have created different channels to bring banking closer to

the customer. Customers no longer have to visit our

branches to complete their daily banking transactions. Now

they can access a host of services 24-hours a day from

wherever they are.

2.1 PROFILE

The World’s local bank. Headquarter in London, is one of the largest banking

and financial services organization in the world.

9

2.2 Vision Is to become the world’s leading financial services

company. “Leading” means preferred, admired dynamic and

being recognized for giving the customer a fair deal.

2.3 Mission Is to grow earnings over the long run which will place it favorably in comparison to its peer group.

Also on investing in its delivery platforms, its technology, its

people and its brand to support the future value of HSBC.

Brand HSBC, a symbol of one of the world’s leading brand for

customer, experience and corporate responsibility.

Massage “THE WORLD’S LOCAL BANK”

Parent Company “The Hong Kong and shanghai Banking Corporation

Limited is wholly owned subsidiary of HSBC Holdings Plc,

the holding company of the HSBC Group.

HSBC Group maintains one of the world’s largest

private data communication network and is reconfiguring

its businesses for the e-age. Its rapidly growing e-commerce

capability includes the use of the internet, PC banking over

a private network, interactive TV, fixed and mobile

telephones.

HSBC Group

10

The HSBC group is named after its founding member,

“The Hong Kong and shanghai Banking Corporation

Limited” which was established in 1865 to finance the

growing trade between china and Europe.

HSBC Network HSBC’s international network comprises over 10000

offices in 83 countries and territories in Europe, the Asia-

pacific region, the Americas, the Middle East and Africa.

QualityEmphasis on long term, ethical client relationships.

High productivity through teamwork.

A confident and ambitious sense of excellence.

International in outlook, and character.

Creativity and customer focused marketing.

HSBC in Bangladesh HSBC incorporated in Bangladesh in December 1996.

Started its journey in Bangladesh from anchor tower in

December 1996.

Now HSBC has 9 offices and 8 branches in

1. Dhaka 2. Chittagong 3. Sylhet

The Line of Business in (HSBC) Investment Practices

11

o Payment and Cash Managemento Custody And Clearingo Trade Services

Personal Financial Services

o Personal Credit Operationo Customer Serviceso Branch Operationo Personal Loans

Commercial Banking

o Leasing, Finance and Factoringo Payment and Cash Managemento Trade Services

Human Resources (Salary, Benefit, Appointment etc)

Insurance Services Network Service Center

HSBC ASSET PRODUCTS

Home Loan

Home Equity Loan

Car Loan

Personal Installment Loan

Travel loan

Student loan

Life style loan

Wedding loan

Furniture loan

Motorbike loan

12

CNG conversation loan

Partial Secured Loan

Other Loan Product

Personal Secured Loan Personal Secured Credit

HSBC LIABILITY PRODUCTS

Current Account

Savings Account

Savings Plus

Power vantage

Amanah Account

Time Deposit Account

Monthly Interest Bearing Time Deposit

Account

HSBC Savings Plan

Children’s Savings Plan

Education Savings Plan

Holyday Savings Plan

Peace of Mind Savings Plan

Retirement Savings Plan

Smart Savers Plan

Family Protection Plan

13

PRODUCTS FOR NON RESIDENT BANGLADESHIS

Foreign currency current account:

A non-interest bearing transactional account to be

opened with funds remitted from abroad. US Dollars,

Pound Sterling and Euro.

Foreign currency time deposit account:

An interest bearing time deposit account. Tenors ranging

from 1 to 12 months.

Private non-resident taka account:

This account can be opened with taka or funds

remitted from abroad. This is a local currency account

and can be opened as an interest paying savings account

or non-interest bearing current account.

Wage Earner Development Bond (WEDB) and US Dollar Bond (USDB):

Government bonds issued by the Bangladesh Bank,

especially for the NRBs.

Personal secured credit:

A taka credit facility secured by foreign currency time

deposit, WEDBs or USDBs.

Personal secured loan:

14

A fixed loan secured by foreign currency time deposit,

WEDBs or USDBs.

3. Literature Review

Conceptual Learning:

Turnover, in a human resources context refers to the

characteristic of a given company or industry, relative to

rate at which an employer gains and loses staff. If an

employer is said to have a high turnover, it most often

means that employees of that company have a shorter

15

tenure than those of other companies in that same industry.

Similarly, if the average tenure of employees in a particular

sector is lower than that in other sectors, that sector can be

said to have a relatively high turnover.

Like recruitment, turnover can be classed as 'internal' or

external. Internal turnover involves employees leaving their

current position, and taking a new position with the same

organization. Both positive and negative effects of internal

turnover exist, and thus this form of turnover may be as

important to monitor as its external counterpart. Internal

turnover might be moderated and controlled by typical HR

mechanisms, such as an internal recruitment policy or

formal succession planning. Unskilled positions often have

high turnover, and employees can generally be replaced

without the organization or business incurring any loss of

performance. The ease of replacing these employees

provides little incentive to employers to offer generous

employment contracts. However, high turnover rates of

skilled professionals can pose as a risk to the business, due

to lose of intellectual property such as skills, training, and

knowledge. Notably, given the natural specializations of

skilled professionals, these employees are likely to be re-

employed within the same industry by a competitor.

Therefore, turnover of these individuals incurs both

replacement costs to the organization, as well as resulting

in a competitive disadvantage to the business. (TAYLOR, 2002)

16

High turnover often means that employees are unhappy

with the work or compensation, but it can also indicate

unsafe or unhealthy conditions, or that too few employees

give satisfactory performance (due to unrealistic

expectations or poor candidate screening). Low turnover

indicates that employees are satisfied, healthy and safe, and

their performance is satisfactory to the employer. Many

psychological and management theories exist regarding the

types of job content which is intrinsically satisfying to

employees and which, in turn, should minimize external

voluntary turnover. Dismissals should also depend

negatively on the cost of monitoring since firms with high

monitoring costs would be expected to monitor their

workers less intensely. Employees resign for many different

reasons. Sometimes it is the attraction of a new job or the

prospect of a period outside the workforce which 'pulls'

them; on other occasions they are 'pushed' due to

dissatisfaction in their present jobs to seek alternative

employment. Sometimes it is a mixture of both pulls and

push factors. For a fourth group reasons for leaving are

entirely explained by domestic circumstances outside the

control of any employer, as is the case when someone

relocates with their spouse or partner. It is important to

appreciate that the reasons people give for their

resignations are frequently untrue or only partially true.

The use of exit interviews is widespread yet they are

17

notoriously unreliable, particularly when conducted by

someone who may later be asked to write a reference for

the departing employee. They are reluctant to voice

criticism of their managers, colleagues or the organization

generally, preferring to give some less contentious reason

for their departure. (Robbins, 2005)

The major methods of costing employee turnover are

described above. Obtaining accurate information on reasons

for leaving is harder. Where exit interviews are used it is

best to conduct them a short time after the employees hand

in their notice. The interviewer should not be a manager

who has had responsibility for the individual and who will

not be involved in future reference writing. Confidentiality

should be assured and the purpose of the interview

explained. Alternative approaches involve the use of

confidential attitude surveys which include questions about

intention to leave and questionnaires sent to former

employees on a confidential basis around six months after

their departure. (TAYLOR, 2002)

Empirical learning:

Turnover is a fact of life. Bankers may think they have it

awful, but virtually every industry faces turnover

challenges. The national fast food chains run an at

unbelievable 85% – 120% annual turnover. While the

18

turnover rate is consider “high” today, it should be accepted

that some normalized rate in the 10% – 15% range would be

expected for even a high performer. The good news about

turnover is that the economy is doing well and employees

have options. Great companies do achieve lower turnover.

While turnover is a fact of life, some companies have simply

put this issue to bed. Low turnover alone does not drive

better performance – While great companies typically have

low turnover, it’s important to note that low turnover does

not necessarily make you a great company. It is found that

there is no mathematical correlation between a bank’s

turnover rate and its ROA or efficiency ratio. Performance

has too many variables for turnover alone to be a primary

driver.

Turnover is not an HR issue, it’s a business design issue – If

bankers expect the HR department to solve the turnover

issue, they will be sorely disappointed. Instead, bankers

should get to the real strategic issues about why someone

would work at their bank instead of anywhere else. Humans

naturally want to work for winning teams, a bank with a

clear strategy that been drilled down into the culture has a

lot better shot at reducing turnover. The costs of turnover

are real and painful. Bankers intuitively accept that

turnover is costly, but few banks ever make real attempts to

measure this cost. Experts say that it costs 20% of an

employee's annual salary to replace the lowest production

19

worker and five times the annual salary to replace

executives. One of the universal truths in business is that no

one likes to work for a wicked person. While the Human

Resources department cannot be expected to solve the

employee turnover issue, it certainly can be the coordinator

and catalyst for going after the problem. However to face

this problem the first thing HR can do is to make the

turnover issue visible and the costs real. Making visual

report will keep management focused quarter to quarter on

the issue. Another practice the HR can do is to conduct exit

interviews with employees to learn and to know the reason

behind their leave. (TAYLOR, 2002)

There is no set level of employee turnover above which

effects on the employing organization becomes damaging.

Everything depends on the type of labor markets in which

the company competes. It is possible to sustain high quality

of service provision despite having a high turnover rate. By

contrast, where skills are relatively scarce, where

recruitment is costly or where it takes several weeks to fill a

vacancy, turnover is likely to be problematic from a

management point of view. This is especially true of

situations in which organizations are losing staff to direct

competitors or where customers have developed

relationships with individual employees as is the case in

many professional services organizations. Again, it has been

noticed that some employee turnover positively benefits

20

organizations. This happens when a poor performer is

replaced by a more effective employee, and can happen

when a senior retirement allows the promotion or

acquisition of a young, energetic employee

Turnover is one of those issues that floats around every year

at the bank but never seems to get a groundswell of action

to address it. It’s because most bankers have wrongfully

assumed there’s some mystic practice that HR can follow to

address the issue. Going forward, bank managers should

jump in feet first and get involved in the business issue of

keeping employees, and HR can start this process by

making the facts about turnover more visible with senior

management. (RANKIN, 2006)

21

4. Findings and Analysis:

Analyzing the data collected through the questionnaire

survey with the bank personnel some findings has been

explored.

Employees intention about switching the existing job-

Frequency Percentage

Yes 3 10%

Not sure 18 60%

No 9 30%

N=30 100%

From the chart it is evident that, while one third of the

employees showed strong commitment towards the

organization. A significant proportion of the employee

exhibited no organizational commitment. In addition 60%

of the employees were uncertain about staying in the

existing job, which revealed their lack of loyalty towards

their existing job. This group of employees might be

actively responsible for the further turnover. Therefore the

22

low level of loyalty of the employees is the core cause for

employee turnover in HSBC (CGE Branch).

Relationship between nature of job and the related

satisfaction level—

Satisfaction level

nature of job

Stressful

Challenging

Interesting

Boring

Highly Satisfied

33.33%

33.33% 33.33% ------

Satisfied 67% 33% ------ ------

Neither Satisfied nor Dissatisfied

----- ------ ------ 100%

Dissatisfied 67% ------ ------ 33%

Highly Dissatisfied

85% ------ ------ 15%

23

The chart above, exhibits employees relative satisfaction

level with the nature of their existing job. Surprisingly,

irrespective to the level of satisfaction majority of the

employees perceive their job as stressful. This high job

stress is one of the major causes for employee turnover. In

addition there is a prevalence of a group to whom the job is

just boring. This group may propel the level of turnover in

long run.

Hectic work schedule----

Type Of Work Frequency Percentage

Target Oriented 9 30%

Routine work 6 20%

Both 15 50%

From the table it is found that, maximum employee’s job is a

combination of both target oriented and routine work.

Besides performing the routine work, attaining the target

put enormous pressure on them, so soon this tight schedule

become burden some, which is likely to be responsible for

employee turnover.

24

Involuntary turnover---

Year No Of Employees

Average turnover

2006 5 6

2007 7

From the analysis it is found that over the year involuntary

turnover is increasing due to inability to attaining the

target. Average turnover is 6, which is very high relative to

the level of workforce.

5. Recommendation

Organizations must have a planned approach in order to

provide successful solutions to employees' concerns. It

needs to become part of company culture, if the

organization demonstrates to employees that they are

willing to make an investment in them ensuring positive

results to follow.

If an employee resigns, then good amount of time is lost in

hiring a new employee and then training him/her and this

25

goes to the loss of the company directly which many a times

goes unnoticed. Even after this new hiring cannot

guarantee the same efficiency from the new employee.

Management requires time to judge his capabilities and

work nature. The loss is even graver if the efficient

employees of the organization switch to their major

competitors.

For all these and many other reasons organization need to

retain employees. For retaining employees, Management

need to understand the requirements of the employees and

at the same time should make them clear about the

expectations of the company from them. The company

management should make their employees accountable for

their respective jobs and make them feel that they are very

important for the smooth processing of that process

HSBC can take the following steps to reduce their turnover

rate and make a long time commitment with the employees.

Career Development Program

Every individual is worried about his/her career. HSBC can

provide them conditional assistance for certain courses

which are also beneficial from business point of view. For

getting admitted to such program, Management can

propose them to sign a bond with the company, like they

26

cannot leave the company for 2 years or something after the

successful completion of the course.

Performance based Bonus

To get more work out of the employee, HSBC can make a

provision of Bonus. By this employee will be able to relate

himself with the company’s profit and hence will work hard.

This bonus should be productivity based.

Making the employees easily accessible to managers

HSBC should make the employee easily accessible to the

management. Top Management expectations should clearly

communicate to the employees, so they can perform their

job better.

Employee empowerment

HSBC Management can increase sense of belongingness of

each employee so that they can also feel themselves as

important as their officers in higher hierarchy. If employees

can develop this sense of belongingness then, they will

reconsider leaving the company.

Loyalty Bonus

HSBC can introduce a Loyalty Bonus Program in which

Management can reward employees after a successful

27

completion of a specified period of time. This can be in the

form of Money or Position.

Involve in the decision making

Involve in the decision making can bring a significant

employee satisfaction. Employees can feel they are a part of

the whole process. Also this involvement can create a sense

of responsibility to be more attentive in the planning

process.

Gifts at some Occasions

Management can give some gifts at the time of one or two

festivals to the employees making them feel good and

understand that the management is concerned about them.

Surveys

HSBC should conduct regular surveys for feedbacks from

employee about their satisfaction as well as other issues

and suggestions. This will make them feel of their

importance and the caring nature of the company. Some of

the suggestions might be of real good use for the company.

28

For a company, the workforce is like an intellectual

property, both in terms of skills and money. A trained and

content workforce can lead a company to new

heights while an opposite one can hamper it badly. So

Management needs to take the necessary steps to minimize

the employee turnover and create a bond with the

employees.

5. Conclusion

In the present scenario, world is turning into a global

village. In this situation, the biggest challenge for a

company is to retain its workforce intact especially the

efficient employees. Employee retention is more than a buzz

word, it is a very real and powerful part of doing business in

today's marketplace. It is becoming more and more difficult

to find and retain top talent. The company must recognize

and embraces the need of its employees. Satisfied

employees can lead to provide better service to the

customers and earn greater reputation and profitability for

the company.

29

Appendix—

Questionnaire:

I am a student of Independent University

Bangladesh and currently enrolled for my Internship

program in HSBC Bank. I am conducting this survey

to prepare my Internship Report on “Identify the

reasons of employee turnover in HSBC”. The

purpose of the survey is to know the reasons of

employee turnover in HSBC (CGE Branch).

30

Your participation in this survey is really

appreciated and will help me to conduct the survey

successfully. It is assured that the information you

will provide will be strictly kept confidential and

used for educational purpose only.

Thank you for your time and cooperation.

Sincerely

Sultana Pervin Keya

Please choose your best option among the

choices-

1. Gender of the respondent?

a. Male b. Female

2.Mention your job designation?

…………………………..

3.Which level of management best describes your position in the hierarchy?

a.Top

31

b.Midc. First line (low).

4.How long have you been working for HSBC?

a.1-2 yearsb.2-3 yearsc. 3-4 yearsd.4-5yearse.5years above

5.Did you work for any other companies before joining at HSBC? (If Yes then answer the next question)

a. Yes b. No

How long did you worked for that company?

a. less than 1 yearsb.1-2 yearsc. 2-3 yearsd.3-4 yearse.more than 4 years

6.What was/were the dissatisfying factor/s with the company you used to work?

a. Incompatible salaryb.Job positionc. Limited opportunity for personal growthd.Other (specify) ______________.

32

7.Would you switch this job if you get any better offer in any companies?

a. Yes b. Not sure c. No

8. What sort of job you are currently doing in HSBC?

a.Target orientedb.Routine workc. Both

9. How do you perceive the job you are in?

a.Stressfulb.Challengingc. Interestingd.Boring

10. Are you satisfied with the nature of the job?

5 4 3 2 1 | | | | |

Highly Satisfied Neither satisfied Dissatisfied Highlysatisfied nor dissatisfied dissatisfied

33

11. How do you rate satisfaction level with your existing salary?

5 4 3 2 1 | | | | |

Highly Satisfied Neither satisfied Dissatisfied Highlysatisfied nor dissatisfied dissatisfied

12. How secure do you think your job?

5 4 3 2 1 | | | | |

Highly Secured Neither secured Unsecured Highlysecured nor unsecured unsecured

34

Employees intention about switching the existing job-

Frequency Percentage

Yes 3 10%

Not sure 18 60%

No 9 30%

35

0%

10%

20%

30%

40%

50%

60%

Yes Not sure No

Emplyees intention

Percentage

Relationship between nature of job and the related satisfaction

level—

Satisfaction level

nature of job

Stressful

Challenging

Interesting

Boring

Highly Satisfied

33.33% 33.33% 33.33% ------

Satisfied 67% 33% ------ ------

Neither Satisfied nor Dissatisfied

----- ------ ------ 100%

36

Dissatisfied 67% ------ ------ 33%

Highly Dissatisfied

85% ------ ------ 15%

Nature of job and satisfaction level

Highly Satisfied

Satisfied

Neither Satisfied norDissatisfied

Dissatisfied

Highly Dissatisfied

Hectic work schedule----

Type Of Work Frequency Percentage

Target Oriented 9 30%

Routine work 6 20%

Both 15 50%

37

Hectic work schedule

30%

20%

50%

Target Oriented

Routine work

Both

Involuntary turnover---

Year No Of Employees

Average turnover

2006 5 6

2007 7

38

Involuntary turnover

01

23

45

67

8

2006 2007

No Of Employees

Reference:

www.hsbc.com

www.gmi.org/research/websites.htm

www.cipd.co.uk/surveys

39

TAYLOR, S. (2006) ‘Are you keeping your

employees happy?’ The HR Director. . London:

Chartered Institute of Personnel Development. 

40