HRMT20024 Managing Human Resources12
HRMT20024 Managing Human Resources12
Students have completed an annotated bibliography for Assessment 2, and that material should be used towards Assessment 3, including the feedback received. Assessment 3 will assist students to apply their learning to a particular industry sector or problem, and tailor their argument to that sector’s specific challenges. It will give students the opportunity to enhance their research, analysis, critical thinking and written communication skills; particularly in the areas of argument development and essay writing.
Before starting this assessment, please read the marking criteria (at the end of this document).
There are two choices for Essay 3 – the mining sector, or the banking/financial services sector.
You will write an essay on the key challenges in attracting and retaining a workforce in your selected sector. Your essay will draw on at least five themes from Week 1 to Week 11 of this unit, being those most relevant to your selected industry sector. Your essay will draw on the academic literature (including the annotated bibliography you developed for Assessment 2), and develop an argument applying that literature to your selected sector.
You must cite at least ten (10) relevant peer reviewed journal articles, and 3 chapters from the Kramar textbook. You can cite other academic references such as books, conference papers, and book chapters but these will NOT be counted as part of the 10 journal articles.
This essay paper is an attempt to investigate the key challenges in retaining and attracting employees in the banking sector and find out what are the main reasons behind this and how it affects the performance of banks in all over the world. The major challenges which are facing by the banks and financial institutions are a shortage of skilled employment, employee turnover, and lack in attraction in youth towards the banking and financial services because of digital advancement in this industry. In recent days, it has been seen that banks are struggling in facing difficulties to manage their HR policies regarding motivation, training, and development of employees. It has been observed that there is a strong relationship between employee retention and employees’ motivation among employees (Gosnell, 2016). Therefore, it is essential for the banking and financial industry to focus on long term planning to face the key challenges that are related to employee retention.
Many banking and financial institutions are struggling in both attracting and retain top talent in the organization, even they offer faster promotions in a bid to win the loyalty of employees and enhance their motivation level with higher salary package. Most of the banks pay a competitive pay package to their employees, but despite being employees move to another organisation. Apart from this, other organisations are also paying the most competitive pay to bank employees because they want to hire the best people from cross-industry skills. However, it is a trend in recent days that young professionals are now looking for innovative start-ups and tech firms because they feel that their future is secure and safe in this form. Moreover, this is one of the major problems for the banking and financial industry that they fail to attract these types of professionals for banking jobs (HRFS, 2018). As financial and banking organisations undergo their own digital transformations, they need to attract people with required skills to effectively apply new technologies and digital services as they are developed. These banking organisations need to retain and recruit sprightly and adaptive employees to navigate the changes that will result (HRFS, 2018). However, with the emergence of new banking and financial players in the market having smarter technology and ability to quickly adapt the market changes- traditional banking and financial service organisations are struggling to stand out in the banking industry (Bland, Church, & Luo, 2016). Therefore, it is essential to take corrective action to attract the right people with the right skills and retain them for the long term in banking services.
Key Challenges In Retaining And Attracting Employees In Banking Industry
When we look in the banking /finance industry where traditional financial institutions are operating today, it can be said that most of the prominent financial companies are fighting and struggling to bring in people with right skills. HRMT20024 Managing Human Resources12
The millennial entering in the banking and financial industry is far more tech-savvy than the previous generation employees are in the same industry. They are grown up with high advance technological devices with a broadband connection, using social media to connect with the real world and latest smartphones in their pockets that enabled them as smarter than the old generation of people. As a result, they are more attracted and being pulled towards the fun, disruptive, and digital-first start-ups that are now storming and trending in the market (Richardson, 2016).
Technology has also some negative affect the people that how these youth generations perceive the financial world. As banking and financial institutions are continuously working on introducing new technologies and advance operating systems in banks to improve operating effectiveness and also focus on improving their performance through doing work hard to update their legacy systems. Many works that were traditionally carry out through human workforce now becoming automated (Ibidunn, Osibanjo, Adeniji, Salau, & Falola, 2015). These changes are leaving out fear in some job seekers that their skills are no longer relevant to the financial sector. Thus, attracting these types of people towards the banking and finance jobs are also a tough challenge for the banking and financial organizations.
However, with the digital transformation in banking and financial institutions, new jobs are created that are required new skills of employees such in big data, cloud computing, web development, mobile technologies, and IT security etc. Once the director of Ernst & Young said in the report of this institution is that “we will not know what the bank of future will be like until we feel our way there” (Ernst & Young, 2018). From his statement, it is clear that it is the responsibility of banks and financial institutions to bring skilful and tech-savvy people in the banking and financial institutions and connect them into the guts of the banking and financial services.
Banking Digital Talent Crisis And The Skills Gap
A study conducted by Capgemini in last year, it was found that 62% of senior leaders in the banking industry believe that the digital talent gap has been widening over the past couples of years because of the advancement in the technology used in banking and financial institutions. It was more than any other industry surveyed, including retail, insurance, or automotive.
(Source: Capgemini Digital Transformation Survey, Digital Talent Gap, 2017)
Apart from this, the skills gap in the finance/banking industry is also widening. According to a survey conducted by PwC Survey, it was found that 70% of financial services CEOs found in their observations that the lack in availability of key skills is a threat to growth in the banking sector (Tunji-Olayeni, Afolabi, Omuh, Ojelabi, Amusan, & Ogundipe, 2017). The enhancement in technological advancement and its capabilities and roles in the financial sector such as data scientist and artificial intelligence also poses threat to retain and attract competent workforce in the banking and financial sector. However, there are large numbers of people available who are developer and experts in data science and are also experts in finance, and vice versa, but they are not interested to do the job in the banking and finance field. It is so unfortunate for this industry to attract these job seekers towards the banking industry. This problem persists.
Some people believe that if banking and financial sector can repair its reputation, it could help in decreasing the skills gap and bring more qualified talent in the banking and financial institutions. Many organisations in banking and finance industry are lost their image and popularity because they were failed to hire new and fresh qualified graduates or pursuing in finance and skilled and multi-talented only because of the economic downturn in the banking industry (Craig, 2015). The economic downturn is another reason for the banking industry that enabled them to attract new fresh talents towards the banking industry jobs. HRMT20024 Managing Human Resources12
Shortage Of Mid-Career Candidates
It is not only the problem of crisis of fresh-faced millennial graduates who are not interested in the banking jobs rather it is also a problem that there is a shortage of midcareer candidates as well. After the 2008 economic crisis, many finance professionals leave their jobs in the financial and banking industry. It means there are few mid and upper-level professionals are working in today’s financial sector job market. However, the demand of these professionals rises as the banking, finance industry has since improved, and there has been tremendous growth in this industry (Narteh & Odoom, 2015). Thus, it may be possible for a banking organization to attract and recruit talented professionals who have gained experience in both account related works such as payroll, accounts payable, and accounts receivable with great knowledge of technology such as data science and cloud computing etc.
The Problem In Retaining Millennial Talent
One of the major problems in the banking industry is that people tend to leave the job after a very short period of service (Erickson, 2015). This case is especially applied to millennials because very few millennials plan to work in long-term. As research, it was found that almost 90% of millennials are looking for job change after a very short period of job duration. It costs an organisation too much if the organisation hires a fresh replacement and if organisations fail to retain an employee in the organisation (Gosnell, 2016). Apart from this, organisations also bear costs for providing training and development to form a new employee in the organisation. To put this into perspective it can be said that 90% of millennials workforce who are not interested in doing jobs for a long time of period, resulted in the organizational cost-per-hire could be increased tremendously. To short out this problem a financial organisation need to be employing a variety of retention strategies to retain their skilful and best employees such as rewards and incentive benefits, regular appraisal, and a good work environment. If banking organisations provide professional development opportunities to their employees, it created employees that are more knowledgeable and increase an employee’s investment in their financial service career (Alkhalaf, Zaballero, Alzahmi, 2015).
HRMT20024 Managing Human Resources12