The main concern of this Human resource management essay is to analyses the issues faced by the finance industry for attracting and retaining the best employees in the sector. The rate of employee turnover has increased in recent days and this rate leaves an impact on the growth of the financial sector, but as a side effect, it also increases the expenses of the management of human capital. There is a specific relation between the employee turnover and the profits of the monetary and non-monetary employees. The financial sector has a major role in making the national economic structure strong. The process of strengthening the structure happens through a huge contribution of GDP in the financial sector. As per the government economic records, there is a huge input of around $159 billion to the GDP in the financial year of 2018-19. This is one of the biggest investments to the GDP, which makes the financial sector of Australia to hold the strong and increasing workforce of approximately 450,000 people.
Though there is a successful growth rate in the industry, there are some issues regarding the turnover of the employees in the past years. There is an insight of the roles and responsibilities of HR in order to seek solution to the issues in the financial sector in this essay. There is a detail analysis of the challenges that the finance sector is facing in order to attract and retain the employees to their job roles.
It can be noted in this Human resource management essay that finance industry is the only sector that comprises of job roles which are very much interconnected with each other. Normally, Banks operate with serves which are accessible to all employees and the data updates normally take place at different systems and different locations. As the banking industry comprises of integrate calculations and procedures of data updates regarding transactions, it is important that the employees stay update of each other's activities. If there is no link or communication in between the employees and limited amount of communication, then there will be situations where the employees will grow frustrated and leave the firm (Hussain, 2015). Thus, it is important that Organisations across the world in the finance sector are encouraging a co-operational and employee centric culture that is supportive towards communication. Banks and other financial institutions are often regarded as workplaces which are monotonous and thus it can be said that the excess work pressure and the monotonous activities are often responsible for policies and systems which are too slow and stagnant as far as Organisational change is concerned.
The above mentioned reason creates the chances of excess workload and employee frustration when there are sudden changes in the systems and policies. The Organisational change management theories in this case must be revisited so that the challenges can be addressed (Asad, 2018).
The aspect which further increases the challenge in this case of Human resource management essay is the communication in between the experienced employees and the new graduates. The employees can be responsible for communicating the issue of monotony and inflexible culture with the new trainees or graduates and this commutation mostly occurs outside the firm at a personal level. Thus it can be said that the issues can pose a threat for the firms as far as employing and retaining employees are concerned. It must also be remembered that banking sector is a very demanding industry as far as employee commitments are concerned and thus the culture of the firms play a major role in effecting the decisions of the employees (Khadka, 2018). Due to increase of consumer demand and the Organisational objectives, banking firms are often left with limited amount of options.
In the banking sector, there are different activities which require the firms providing the new joiners with ideal time and quality of training. The Organisations in these cases face challenges as the training of employees can include factors which are belonging to the external environment and thus they are hard to control. The challenges faced by banking sector in training employees are as follows:
- Firstly, the banking sector must align its activities with the rules and regulation of the government and if such changes are occurring at regular basis. The firms can face excess cots in updating their training and development facilities and design them accordingly with the rules (Tariq, 2015). Often there are situations where the firm is unable to make sure that they appropriate and well informed instructors are found. This also occurs as the rules keep changing.
- One of the situations discussed in this Human resource management essay that are responsible for the firms facing training and development challenges is the learners or the trainees not paying attention. In the banking sector, the development sessions can be unsuccessful if the training activities are prolonged. Thus, engaging the learners can also pose to be a problem for the firms (Martins, 2018).
The measuring of training effectiveness can also be difficult for several Organisations due to the fact that often as per company policies, employees are not allowed to take on fresh duties until their training is finished. Therefore, situations can occur where banks are not sure if the training was a success due to the fact that they cannot ask the employees to work on fresh duties when their training is underway. This can call for unnecessary confusion and as a result the outcome can be adverse. The process of conducting exams within the training process on the other hand can increases costs and thus overall it can be said that the developing effective employees is a major issue for firms across the financial sectors often require the employees to be present at the workplace regularly and this can negatively impact the employee decisions if they are not able to keep the balance between workplace and personal life. In most of the occasions, the firms or Human Resource Management has nothing to do as demands should be met so that there are no gaps in.
It is obvious that banking industry like other Organisations are dedicate towards making sure that they implement the most recent technologies in order to enhance operational ease and competitive advantage. However, the issue with technology is that it can change and upgraded from time to time. This creates a situation where the employees have to be vetted once again so that the firm understands the capability of them being able to operate the new technologies. The creation of training and development in this case can be a good option, but there is the disadvantage of added cots. However, changing with the technological changes is necessary due to the fact that it involves the firms being able to provide the employees with appropriate facilities that can be sued to perform effectively (Ledimo, 2018). For example, if there are situations where new software is available which is efficient for creating Final Accounts, then, it must be implemented so that the employees are able to effectively go about their operations of creating final accounts. To make sure that operational resources such as employees stay consistent as per the changing demands and situations, the implementation of technology must be accepted. However, the above mentioned issues in this Human resource management essay that come along with the implementation can turn out to be a challenge as far as retaining employees are concerned.
The competition in the finance sector as opined by Kashyap et al. (2016), is a trending factor at recent times. The competition is apt for sometimes but sometimes it follows by financial crisis. It is being hard for the HRs to appoint new employees, as there is an acute scarcity of skilled employees in the industry. The transformation of the finance sector is started to happen as per following the deregulation of the sector since 1980s. This transformation mentioned in this Human resource management essay opens the surface to the system of bigger viable forces. The regulatory act started to affect the sector from that point of time and it becomes important for the market participants to take part in the periodical dynamics of the risk taking method (Hussein & Goel 2016). The rising effects of poaching affect the industry highly. This reduces the retention of the employees in the finance sector. The threats of the new entrants have an important role on framing the financial sector. It is seen in Australia that the entrance of the originators of mortgages reduces the scope of distribution of cash rates on the mortgage properties. There is entrance of the overseas banks in the online deposit sector, which makes a relative increase in the deposited cash rate.
As said by Hellmann et al. (2016), the financial sector of Australia is controlled by four major controllers, four banks are important in the banking sector and four important insurers to control the insurance sector. The highest rate of market share is over 75% in the markets for lending loans to small business initiatives. The market share of the insurance sector goes up to the rate of 80% or higher for those who seek any kind of insurances. The changes in the financial structure are at specific in terms of the improvement in the market share results. The structures of loan for the small business have more obstructions as the lack of proper information about the lenders. The advanced technical support can bring some improvement in the scenario (Forbes et al. 2015). In addition to that, there is a major lack in the alternative sources of funding to the bank loans, which reduce the chance of improvement of the financial infrastructure. The excessive competition is harming the financial stability of the country. There is a constant competition to maintain the safety of the banking sector, which acts as an implication of the competition. Due to all this exceptional situations illustrated in this Human resource management essay, the banking sector is gradually losing their capability of sustaining their employment. The lack of basic knowledge about the sector and the fear of sudden recession stop employees from entering to this sector (Green 2016).
The shortage of skilled employees is increasing day by day in the finance sector. In a recent research of West & Bhattacharya (2016), it has been seen that around 70% of financial personnel find the accessibility of the basic abilities as a growing threat in the market. This is increasing the tendency of using the technology as a substitute of the human work force. There is emergence of the digital alternatives such as Artificial Intelligence (AI), software engineers and data scientist in the financial sector that reduces the chances of human employment in the sector. A recent financial research shows that around 76% of financial institutes has introduced with new IT roles for improving the banking sector. The financial firms have more need of complied authority in recent times, which includes the ACA act, anti-money laundering regulations, capital requirements and consumer protection act (Zingales 2015).
A basic knowledge about the Exchange and Securities requirements are important for controlling the public and corporate office roles. The general terms of acceptance of the accounting principles is an essential factor to know about this sector. The multilingual abilities are considering as the basic requirement for the banking professional, lacking of which makes an employee incapable for the job as the banking sector is tending to expand in to new countries and markets. Another hindrance as opined by Zhong et al. (2016), comes in the shape of monetary offense and anti-money laundering which needs specific attention for reduction in the growth of the banking sector. The hierarchy of the banking sector requires intense skill and abilities lacking of which misbalances the sector accordingly. This high demand of skills and abilities in the banking sector sometimes act as a drawback for engaging maximum number of employees in the work sector.
Financial sectors mentioned in this Human resource management essay are also experiencing a huge revolution with the introduction of the technical support. The digitalized work force provides such effectiveness in the work process which incompatible in terms of human work force (Ruming 2016). The automation procedure increases the customer satisfaction and enhances better experience for the customers. This reduces the chance of indulging human work force in action. This comes out as the reduction of job profiles in the banking sector. The high-speed services decrease the expenses of several banking operations. However, the performance management as stated by Gomber et al. (2017), also starts to engage the technical supports with them in order to enhancing their work ability and improving their performances. This helps to improve the entire performance of the organisation. According to a recent study, it is noted in this Human resource management essay that around 46% people are remarkably enhancing their work skill with the technical help. Still, the digital transformation in the work sector plays a challenging role for engaging employees in the banking sector (Marti et al. (2016).
Incentive acts as an influential factor for an employee, which motivates him/her to work with better output. Every beneficial step taken by the management for the betterment of the employees is counted as incentives. Two types of incentives are available in the banking sector, financial and non-financial incentives. Financial incentives are provided to individuals or to a group in oder to satisfy their monetary need (Nair et al. (2016)). This also helps in creating a secured future. Nonfinancial incentives are serving the aspects apart from the monetary and security needs. This type of incentive comes in the shape of status, work environment, scopes for better career and many more. The main purpose of this type of incentive is to fulfill the basic needs of the employees, which cannot be measured in terms of money. Proper application of incentives attracts the employees to stay connected with the banking sector. As working with banking sector is a boring and stressful job, incentive is the only factor that can motivate them in performing their best. The misuse of this facility is the biggest challenge that the sector is facing at present time (Hussein & Goel 2016).
The factors mentioned above in this Human resource management essay can be regarded as important issues for firms across banking sectors as far as recruiting and retaining employees are concerned. The Organisations however can follow the recommendations below in order to make sure that the recruitment and retention issues are nullified.
- The Organisation can firstly make sure that proper employee management department or HRM is in place. The positions that will be created in the HRM departments must make sure that the Organisational activities are planned and executed after consultation with the Human Resource Management Department. This will be an important factor in term of making sure that the employee interests are taken into account when subjecting them to any duties. The Organisations that already have an HR Department can make sure that their policies regarding managing employees are revisited.
- The up gradation of reward systems can also be regarded as one of the factors which plays a major part in makings sure that the experienced and talented employees are retained. This retention process must also be backed up by effective budgeting. The performances as a result will increase and the operational efficiency will be increased significantly as well.
Employees can be regarded as one of the main stakeholders in any Organisation regardless of it being related with any sector. The banking sector however, is very challenging as the job profiles are normally very demanding and there are fewer margins for errors. Therefore, it is ideal if the Organisations are aware of the strategies that can help in keeping up with the employee interests. The study of Human resource management essay above is very much effective in terms of making sure that the barriers for effective employee selection and retention are identified and thus the learning can help in future operations.
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