The book titled "Start with Why" by Simon Sinek has stirred me a lot as the book deals with the importance of identifying the employees' "why" and its impact on their engagement. Partnering with and placement of skilled, experienced and resourceful workforce is a daunting task for Human Resources (HR) function in any business arena, especially in service-oriented industry like banks and financial institutions. HR professionals in general hire and fire workers, assist with employment paperwork, manage bank's benefit packages and provide ongoing training and development to the workforce. In the big banks, HR functions are seen as part of the back office, and since HR professionals deal with individuals and groups of workers regularly, various issues can arise from time to time which require impact-driven decisions and actions to improve situation as well as mitigate conflict, if any.
Contemporary HR practices are moving from personnel to human resources to people management and development. For example, nowadays, Chief People Officer (CPO) instead of Chief Human Resources Officer (CHRO) and People Organisation instead of HR Division are being used in many MNCs. Hence, strategic HR management focuses on various vital areas such as organisation, resourcing, professional development, change management, capacity building, gap analysis in the evolving areas, performance management, knowledge and talent management, reward management and employee relations.
HR development is an indispensable component for growth and economic development. The augmentation of HR development of a country is dependent on the government and national policies, while at the firm or micro level, HR development can happen through workplace learning and efficient utilisation of resources. Resources are efficiently utilised to support HR development when the maximum benefit is shaped at the lowest possible cost.
HR development has vast impact on socio-economic development. Counties such as Singapore, Hong Kong, Korea, Taiwan, China and Japan have achieved rapid development over a short period of time due to HR development. The World Bank studies show that investment in HR development is one of the major factors for rapid socio-economic progress of the East Asian region. Research findings show that the overall spending levels, organisational structure and team size have far less impact on business performance than the skills of the HR professionals. In case of high-impact HR practices, development for excellence should offer benchmarks, tools, real case studies, operational frameworks and proven service models which are acceptable worldwide. As such HR development must be focused on continuous improvement efforts when looking at HR structure, services as well as its infrastructure.
In the financial industry, well-accepted HR practices and development include ability to source the best talent, hire top candidates, identify and develop leaders, build a culture of learning, allocate compensation effectively and also drive high performance through mentoring and seeking effective feedback. HR development demands proactive adaptation of new practices, selection of right solution providers and creation of a culture of partnership with business leaders. Hence, HR managers aspire to be strategic partners with line managers. Practices for implementing a strategic-business-partner model for HR with a focus on the strategy, structures and systems require banks need to adopt innovative means and ways. Line managers also need to understand the new HR roles and what capabilities they uphold in those roles. The key competencies that drive results in modern-day banking business are familiarity with integrated talent management, understanding of workforce planning, and comfort with social networking and HR technology.
Rapid technological changes transform the business and demand a continuous skill up-gradation, and in this environment many banks are adopting modern technology, including new delivery channels. However, technology will no longer remain a major differentiator among banks. The key differentiator among banks in the decade ahead will be the ability to harness the HR and building a competitive advantage on the strength of them. Thus, technology-enabled, well-learned HR teams will be able to take advantage of modern talent management and partner with business leaders to drive high-impact in banking.
HR is often seen as a core strategic factor within a bank as such both tangible and intangible benefits are integrated with best practices in HR. In the multinational banks retaining skilled employees from around the world has been considered as a key enabler to fulfilling organisational strategic ambitions. These multinational banks consider HR development as a part of the long-term planning and implementation. Globally most admired banks such as Wells Fargo, JPMorgan, Citigroup, Royal Bank of Scotland acknowledge the concept of "disciplined people" to move with the fast-changing business world. These banks have also adopted more innovative HR practices such as 'ethical test', two-day compulsory workshop dedicated to learning value of the company, 'career manager' for every workforce, CEO's appraisal on Internet to every employee, child-care facilities for employees, family involvement in celebrations, i.e., induction certificates in front of families, no doors inside any offices and transparency in profit sharing initiative with employees at all levels.
Modern HR partners are realising that they need to change their strategy integrating it with technology. In the dynamic banking business scenario, people are finding their skills portable, and companies can't afford to lose that expertise. As there are a lot of people with immense knowledge and good ideas, HR professionals need to add such behaviour and skills as listening attentively, empathy, humility and developing others by using coaching and democratic styles of leadership. All these endeavours will increase engagement, commitment and loyalty, and lead to sustainable productivity and performance of financial services. Hence, HR professionals have a great role in being enablers of change and the custodian of the corporate conscience in a bank. Banks should devise sound HR practices aimed at building a competent and highly motivated workforce base. High impact-oriented strategies are required to promote HR development in banks to ensure the pool of talent to sustain the long-term growth of the industry.
Banks must address the pertinent HR issues such as structured governance, advanced workforce planning, right HR philosophies, reduced administrative work for HR business partners, flexible HR organisation design, improved employee-facing HR systems and outsourcing HR services strategically. Therefore, the HR policy of banks needs to be strategically aligned and connected with business.
Competent authority of any bank needs to give proper attention on HR issues like formulation and deliberation of strategies involving leadership development, succession planning for critical levels and specialised areas, performance standards, compensation and rewards management, redesigning of organisation structure and other emerging issues for sustained and inclusive development of entire workforce.
The writer, a banker, is a Certified Expert in Risk Management (CERM) from Frankfurt School of Finance, Germany. firstname.lastname@example.org