By: Syazwan
Photo by chuttersnap on Unsplash
Human Resources (HR) share similar roles and functions across the board, and are nuanced according to the industry to which they are in. In the Human Capital Society’s efforts to understand HR from a plethora of perspectives, we are starting on a series of articles delving deeper into HR in various industries. Through this series, we hope to enlighten our fellow peers on the impact and importance of HR in different business conditions.
To kick-start the series, we begin with the banking industry. Why the banking industry first you ask? Well, we have two main reasons, highlighted below:
1. As the majority of NUS Business School students are specializing in Finance, we aim to reach out to and connect with others outside the MNO spectrum! (For the marketing, supply chain, and students from the other specialization, fret not, we will write about your relevant industries in the upcoming editions!)
2. Given the rapid digital developments in the banking industry, we felt that this is a pertinent time to discuss HR’s role in these changes
The main activities that HR in the banking industry conduct can be classified broadly into bringing value to the organization, spurring changes (such as digitalization), and facilitating manpower and diversity planning. These critical functions form the majority of the work that HR contributes towards the successful operations of banks today.
Enhancing Value
HR professionals in banks value-add to the banks through developing appropriate human capital policies to further the corporate goals. In a 2018 survey compiled from 420 banks, recruiting and retaining millennials, the largest generation in the U.S. population, is at the top of mind for many banks. More than half (51%) of the banks surveyed said retaining younger talent was either very challenging or somewhat challenging, highlighting the need for the right HR policies to prevent the loss of these talents.
According to findings from ManpowerGroup, millennials are driven by a desire to “make a positive contribution” to the business and to “work with great people: Hence, financial institutions like banks need better employee engagement policies to engage the younger generations more proactively in this area, providing them opportunity to make an impact through projects at work. This is definitely feasible given how technology and innovation have started to permeate and reshape the financial workforce.
HR continues to play an increasingly important role in banks amidst the competitive business landscape in ensuring that they retain their top talents. While this may be viewed as a supporting role, we cannot discredit the crucial role HR plays in this value chain that allows banks to tap into and develop their workforce to greater heights.
The Swedish bank, Handelsbanken places great value in long-termism and it has a philosophy of decentralisation which encourages employee engagement. For example, it’s slogan regarding its philosophy is “the branch is the bank”; branch managers are empowered and entrusted to build local customer relationships and prudent lending and investment is based on these one-to-one relationships. By fostering these employee relationships and engagements, they create motivated workers who are willing to go above and beyond for the bank, a prime example for other banks to follow.
Spurring digitalization
With the rapid pace of digitalization in today’s world, banks need to leverage on this trend through enhanced technological methods. Such a transformation of the banking sector will not be achieved without a transformation of its management style. By adapting the corporate management style to utilize technology in augmenting operations, banks are primed to ride on this exponentially rising trend towards greater growth.
HR comes into the picture as the catalyst for these changes to take place appropriately and swiftly, improving current processes while maintaining corporate values and principles.
A report by McKinsey & Co. shows that machines will be capable of performing approximately 30% of the work done at banks. Hence, HR plays a paramount role in ensuring that as automation and machine learning creates this paradigm shift that alters the way work is done, employees do not become redundant, but are equipped with the skills to work with these technologies and maintain a certain level of efficiency in their jobs.
The fine balancing act that HR performs to achieve the right balance of spurring digitalization while maintaining workforce efficiency is the cornerstone of banks in leveraging on these developments. HR sustainably spurs digitalization for balanced growth in banks with the long term in mind.
Facilitating manpower & diversity planning
A core function of HR across the board is in the manpower and diversity planning within companies. In a similar vein to the idea expressed in the first point of enhancing value, HR focuses on ensuring that the various departments in the company are appropriately staffed with the best people possible for that role.
HR departments are charged with the challenge of implementing diversity policies, recruitment policies, and regulation and compliance standards both in their own offices, and on a national and even global level. Goldman Sachs, one of the leading Investment banks globally, is extensively focused on ensuring workforce diversity and equal opportunities for all.
In the banking industry, HR facilitates interviews between prospective employees and functional teams to ensure that the talents that are ultimately hired are aligned with departmental as well as corporate needs. The stringent fit- and capability focused interview assessments conducted by HR form the backbone of the bank’s workforce. For instance, assessments may involve looking at a candidate’s learning agility especially if the banks are planning for extensive organisational developments in their business, in this age of uncertainty.
Photo by Hunters Race on Unsplash
Coming Together
Coming from Justin, an upcoming Year 4 NUS BBA undergraduate who has interned in several banking institutions, “HR in banks are very focused on grooming talents from management associate programs instead of direct hires; they want to develop culture and standards from the ground up”. It is clear, even to the interns, that HR is a foundational pillar that supports the bank through strategic manpower policies and planning.
HR in the banking industry may not receive as much limelight as the other roles present such as in investment banking but without it, banks would not be able to develop the necessary programs to actualize the full potential of those working in these roles.
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