Rethinking HR in banking

Rethinking HR in banking

The book 'The Future of Human Resource Management' edited by three vanguard HR professionals: Mike Losey, Dave Ulrich, and Sue Meisinger sparked me. The book is an eclectic mix of articles written by 64 HR thought leaders. These stellar academics, consultants, and practitioners look at the future of human resources and explore the critical HR issues of today and tomorrow. The book reveals how leading companies hire and retain their talents, explore HR's role in brand development, highlights HR's contribution to business strategy and many more. While reading the book, I was pondering about the current and future HR issues in banking. I would like to share some glimpses of my musings in this article.

In any organisations, HR professionals turn organisational aspirations (mission) into actions. To carry out this, they generally focus organisation's three attributes: talent, cultures and leadership. Talent encompasses competence (skills and abilities), commitment (willingness to engage and work hard), and contribution (ability to find meaning from the work) of the entire human resources of the organisation. Culture entails the right organisational capabilities that enable to shape an identity outside and pattern of behaviour inside the organisation. And, leadership includes the succession planning in such a way that the leaders throughout the organisation are focused on the right things and execute strategy in right ways.

As banking is a service industry, Human Resource Management (HRM) plays an instrumental role for banks. Management of people and management of risk are generally two factors that determine the success in the banking business. But efficient risk management may not be possible without efficient and skilled manpower. So banking has been and will always be a 'People Business'. As skilled manpower is becoming scarce both in quality and quantity, it is quite straightforward that they need to be properly managed for the benefit of society, in general, and of the bank in particular.

Apt manpower planning integrated with the business plan and strategy of the bank is a pivotal part in HRM. It captures the type of people a bank requires, the level at which they are required and clearly defined roles for everyone. This plan may also entail lifecycle approach of an employee from his/her joining to retirement, steady, carefully calibrated recruitment programme, and cultural adjustments and change management among various generations of employees.

In recruitment stage, banks need to revisit their existing recruitment strategy to review whether they target right kind of people. For example, if the competitive advantage of a bank is mass banking with a lot of rural branches, then the bank naturally structures its recruitment strategy to attract the talents who have the right attitude to work in rural areas to serve the mass people. As a result, in addition to problem solving skills, various psychological skills may be incorporated in the recruitment test. In lateral recruitment, banks may think to induct professionals outside the banking with specific skill sets and experience pool.

Though competitive remuneration is a vital reason why people select and stay with a particular bank, other factors such as images, especially in transparent situations with a high level of competitiveness of the bank, training and re-skilling of employees, performance measurement, promotion policy, transfer policy, talent management, communication, etc are also crucial for employee retention. The changing nature of banking business requires massive re-skilling of the existing workforce and continuous skill up-gradation. Online platforms may be used for in-house training facilities. Banks may cut layers of bureaucracy that have created over the years and adopt an effective way of delegation to empower their people.

Exit interviews of the employees may be an effective way to determine why people are leaving the banks. It will not only help to find out intrinsic system failures in the banks, but also gain some effective recommendation to develop them. Banks may leverage the inherent loyalty of their retired people in brand building efforts, financial inclusion initiatives and other non-financial activities.

Mohammad Arifur Rahman | thefinancialexpress-bd.com