HSBC and union row over sales culture

Finance union Unifi yesterday began drawing up a dossier to prove to the City regulator that HSBC has introduced a sales culture that is detrimental to customer service.

The call by Unifi to its 175 representatives inside the self-styled world's local bank to provide evidence for a submission to the Financial Services Authority represents a shift in the relationship between the union and the financial services sector, and HSBC in particular.

HSBC is at odds with the union over 7,500 job cuts - some 4,500 of which are going to low-cost centres overseas - and new sales targets that the union insists are putting pressure on staff to sell financial services products if they are to keep their jobs and earn their annual bonuses.

Unifi officer Cathy Tinston said relations with HSBC have reached a lower ebb than those with any of its rivals, even though they too are cutting jobs.

"HSBC is at the worst end of the spectrum," said Ms Tinston. "Every bank has its rewards system but sales is the only element at HSBC."

The row between HSBC and its union began after the arrival of Michael Geoghegan from the bank's Mexico opera tions to head the British division. Mr Geoghegan wants to boost sales at the same time as tackling costs, hence the staff cuts and a move to send 4,500 jobs offshore.

The overseas call centres are adding to the union's anger because it insists British staff are having to rectify their mistakes. While stressing the union's policy on diversity, Ms Tinston said: "There has be to a debate about the level of the standard of English and the service provided."

HSBC further angered the union by insisting global centres are just as efficient - and in some cases more efficient - than their British rivals.

Ms Tinston intends to tell the FSA that in its role as a regulator it should be concerned that the "ever increasing sales culture inside HSBC cannot be in the interests of customers".

The FSA said it would take "any allegation of unacceptable treatment of customers seriously" but had yet to receive any such claims.

HSBC is adamant it has done nothing wrong. The bank insists its sales targets are not new but admits that it is now able to track sales on a daily basis, which it could not do before.

"The suggestion [of the union] is that sales are a dirty word. It has to be sales through service," HSBC said.

All of HSBC's competitors have introduced systems to try to motivate staff inside their branch networks. Lloyds TSB, which has faced regulatory action over sales of products, introduced a "balanced scorecard" to ensure staff are not motivated purely by sales but have other targets such as customer service, people development and risk management.

HSBC insists the union is wrong in its claim that only sales matter when assessing staff performance. "Every one of our branches is ranked by customer performance," the bank said. It is hiring 1,000 staff to deal directly with customers.

The City is not surprised by attempts to cut costs and drive sales. Martin Cross, analyst at broker Teather and Greenwood, said: "One is not surprised to see the tree being shaken after a long period under the previous chief executive."

Mr Geoghegan took over from longstanding British chief executive Bill Dalton at the start of the year. HSBC admits it is has ground to make up. It is ranked as the best mortgage provider in value for money terms by Moneyfacts but has a 4% share of the mortgage market compared with 15% of current accounts.

One of the few banks able to claim it is global, its British banking business makes 25% of its profit but accounts for 33% of the costs. Hence the argument that it needs to cut costs.

The bank has made extensive efforts to appease employee relations and is aware of the impact of bad publicity. A protest by a cleaner at the 2003 annual meeting over pay and conditions secured a wage rise from £5 to between £6.40 and £7.10 an hour by this year's annual meeting.

It is not yet clear how this latest tussle will end. The union, which is in the process of merging with Amicus, laments that it is not able to have a "robust and respectful" relationship with HSBC and maintains that jockeying for position inside the merged union is not the motivation for picking its current fight.

The union also cites the type of complaints it is receiving from customers. One caller referring to HSBC's Cardigan branch was told by an offshore call centre that Cardigan was a garment, not a place.