HR development: Banking perspective

Partnering with and placement of skilled, experienced and responsible workforces is a daunting task for HR (human resources) function in any business arena, particularly in service-oriented industry. HR professionals in general hire and fire workers, assist with employment paperwork, manage company benefit packages and provide ongoing training and development to the workforce. In the big companies, HR is seen as part of the back office, not what is required to run a business. Because HR professionals deal with individuals and groups of workers regularly, various issues can arise from time to time which requires impact-driven decisions and actions to improve situation and mitigate any conflict arises.
Modern HR practices are moving from personnel to human resources - to people management and development. Nowadays, CPO (Chief People Officer) instead of CHRO (Chief Human Resources Officer) and People Organisation instead of HR Division are widely used in the multinational companies (MNCs). Hence, moving towards the contemporary practices of HR learning and development (L&D) is seen as a central and strategic issue of organisational development. People management issue is as vital as governance issue. Strategic HR management focuses on various vital areas such as organisation, resourcing, professional development, change management, capacity building, gap analysis in core competency areas, performance management, knowledge and talent management, reward management and employee relations. Befitting people in an organisation strive for efficiency in the form of best practices ensuring optimal solution.  
HR development occurred at both nationwide level and firm-wide level. It 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. World Bank studies show that investment in HR development is one of the major factors for rapid socio-economic progress of East Asian region. Research findings show that the overall spending levels, organisation structure, and team size have far less impact on business performance than the skills of the HR professionals themselves.  In case of high-impact HR practices and development for excellence should offer benchmarks, tools, real case studies, operational frameworks, and proven service models acceptable worldwide. Hence, HR development focuses on continuous improvement efforts when looking at HR structure, services and infrastructure.
In the banking sector, well-accepted HR practices and development include ability to source the best talent, hire top candidates on board, identify and develop leaders, build a culture of learning, allocate compensation effectively, and drive high performance through coaching and feedback. HR development demands proactive adaptation of new practices, selection of right solution providers and creation of a culture of partnership with business leaders. Here 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 banks need to adopt innovative means and ways and the skills. 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. In this sector trust, honesty and integrity are critical for workforce success, and also sustainability and development of the business. Rapid technological changes transform the business and demand a continuous skill upgradation. With most banks now adopting modern technology, including new delivery channels, technology no longer remains a major differentiator among banks.
The key differentiator amongst the banks in the decade ahead will be the ability to harness the HR and building a competitive advantage on the strength of them. Thus, lean, technology-enabled, well-learned HR teams are able to take advantage of modern talent practices and partner with business leaders to drive impact in this sector.
HR is often seen as a core capability and 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 and passionate employees from around the world is considered as of the key enablers to fulfilling organisational strategic ambitions. They consider HR development as a part of the long-term planning and implementation. Globally most admired companies such as Marks & Spencer, Shell, Nissan, Sainsbury's Unilever, Ford, John Lewis and Cadbury acknowledge the concept of "disciplined people" to move with the fast-changing business world.
Many MNCs in financial sector 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 available on INTRANET to every employee, children care facilities for women employee, employees of organisation accepted volunteer 20 per cent salary cut to save others' jobs, family involvement in celebrations i.e. induction certificates in front of families, no doors inside any offices and transparency in profit sharing initiative with workers.
HR professionals in banking sector are facing challenges under various categories like regulation, remuneration and restoration globally. These have likely impact on an employee's full life cycle from entry to exit. HR function is facing constant application of regulatory rules worldwide. There has never been so much external intervention before in the banking sector. Banks that empower key HR professionals to take on a "strategic business partner" role shows outperformance. Those banks focus heavily on more advanced internal HR skills outperform by integrating strategic ownership of knowledge-sharing, collaboration and social networking. The challenges for HR professionals today are living up to the high expectations to drive business outcomes through prioritisation and alignment of HR strategies with the business.
Progressive HR partners are realising that they need to change their strategy integrating with technology. In the dynamic banking business scenario people are finding their skills are 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 endeavour 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.
Research findings show that banks excelling in workforce planning drive four times the value of those who focus on the consolidation of HR technology systems. Hence, payroll, benefits, administration are still critical issues in business success. In modern changing business arena these functions should be globalised.
Banks must address the pertinent HR issue 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. The HR development as an utmost concern needs to be debated at senior level. The concerned authority of banks 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, redesign of organisation structure and other pertinent areas for sustained inclusive development and growth.
The writer is a banker pursuing professional accountancy
with ACCA UK.
 [email protected].