Banks spend only 0.25pc of operating cost for HRD

The commercial banks in Bangladesh spend only 0.25 per cent of their total operating cost for human resources development (HRD) although employees are the main driver of their profit making, a study showed.

The banks' spending for training and development of human resources has declined by 50 per cent to 0.25 per cent of the operating cost in the last calendar year (2017) from that of 0.50 per cent in 2016, it showed.

Globally the good banks spend some 2-3 per cent of their total operating cost for HRD.

The Bangladesh Institute of Bank Management (BIBM) unveiled these findings of its latest survey on "Human Resources Management of Banks" at a workshop in the capital on Thursday.

BIBM Associate Professor Mohammad Tazul Islam and his team conducted the study on different commercial banks and the Bangladesh Bank.

The study also showed that the commercial banks have even failed to spend their total allocated funds for HRD in 2017, as they spent 73 per cent of their total Tk 359.44 million outlay for training and development.

The spending rate from HRD funds was higher in 2014 (99 per cent) and in 2015 (85.08 per cent).

Meanwhile, the commercial banks' allocation for HRD has fallen to Tk 359.44 million in 2017 from Tk 414.12 million in 2016.

The BIBM findings also showed that the bank authorities consider the hard-skills of employees as highly important factors for their promotions and career growth instead of soft-skills, defying the international practices.

Hard-skills mean academic achievements, banking diploma, banking software diploma etc, while soft-skills mean communication skills, courtesy, flexibility, interpersonal skills, professionalism, responsibility, teamwork, leadership skills, work ethics etc.

The BIBM study found that the banks are falling short of ethical standard, which is affecting their transparency and accountability as well as hampering growth of the banking sector.

"The absence of ethical leaders in banks creates impact on increasing non-performing loans, violation of ethical codes of conduct, fraud and forgery, and declining profits in the commercial banks," it said.

About recruitments, the study said many banks do not follow the standards in their staff recruitment, which many times affect the banking operation.

The study found that forced retirement of mid- and senior-level staffs in the banking sector is increasing.

Some 29 cent of the employees of the banks had the experience of forced resignation in 2017, it showed.

The workshop at BIBM was attended, among others, by BB Deputy Governor Ahmed Jamal, Former A K Gangopadhaya Chair Professor of BIBM S A Chowdhury, DMD of Premier Bank M A Abdullah, and Director General of BIBM Dr Toufic Ahmad Choudhury.

The BB deputy governor said in the context of Bangladesh, the banks have noteworthy involvement in human resources acquisition and retention management by engaging in relevant HRD training, counseling, motivating, developing and leading.

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