In today's day and age, organisations are facing numerous challenges from internal as well as the external business environment. One of the critical challenges is attracting and retaining the best talent in an organization. The banking sector is one of those sectors that is currently facing issues, such as high employee turnover, poor workplace motivation, and poor performance. This is where the role of HR Management and Planning comes as the HR department is required to handle such issues as soon as possible. In this essay, the challenges and issues related to attracting and retaining the employees in the banking sector are discussed. Furthermore, certain solutions to the issues will be provided which will be related to the five themes that are selected for this task. These are human resource development, performance management, human resource planning, recruitment and selection, and employee retention.
Talking about the day-to-day tasks and processes of the banking sector, the workers are required to carry out transactions and keep a record of the transaction in the computerised system. The job in itself is considered to be stressful and hectic as employees are expected to achieve the target daily. For that purpose, they are under a constant pressure to perform well and attain new skills in order to match the changing environment of the banking sector. There are many challenges that have been highlighted by many researchers related to the Banking sector associated with employee attraction and retention.
The first and foremost challenge highlighted by Bose& Gupta (2017) is the lack of career growth & development opportunities. Banks are failing to create growth opportunities for employees to advance their careers. Gulati& Khera (2013) mentions that nearly 66% of employees working in a different sector believe that lack of career growth opportunities is enough reason to change the job and also causes employee attrition. Both consequences are problematic and costly for organisations. Banks are required to improve their opportunities for employees to mobilise within the organisation. Employees want to improve their knowledge and key strengths and for that purpose, they seek growth opportunities. Hence, it is required from the banking sector to create enough positions and career advancement opportunities for the employees.
Mittal (2013) highlighted that poor work-life balance can be a major factor in high employee turnover in the banking sector. Due to the high workload, employees are expected to work overtime and sacrifice their personal life and ignore their personal needs. This can frustrate employees and may cause burnouts. If this happens anyway, then employee's morale may start getting low. Nowadays, banks are expecting employees to stay longer even after the working hours, work overtime, and do extra shifts to handle the workloads. This disturbs the employee physically as well as mentally. It has been noticed that when workers are overscheduled and they do not get enough time for rest. Employees may sometimes find it hard to match themselves with scheduling needs. The problem is solely related to the poor human resource planning and inability to hire additional workers to ease off the burden of existing employees. Sometimes, the unfair distribution of load can also contribute to increasing employee turnover.
Some researchers like Kowsuvon& Burgess (2016) highlighted those unrealistic expectations by the management from employees. Managers in the banking sector usually set deadlines that may appear unrealistic to employees. Also, they ask for unachievable results while they are provided with limited resources and a limited budget. Tight deadlines may result in poor work quality. For achieving the unrealistic expectations of management, employees might be forced to carry out work in a rush, ignore quality checks, and cut corners. This makes their work susceptible to mistakes and errors. All these events make employees demotivated and they may start looking for a change where they learn new things and give quality work.
Among all the factors affecting employee’s retention rate, poor leadership and directions from managers is also one of the top reasons.It has been seen that when the organisation lacks strong leadership, everyone starts taking their own decisions and this weakens the team spirit and creates chaos within an organisation. Banks may not be able to achieve their peak performance as workers are not getting proper directions and motivation. Due to a lack of leadership, employees remain in confusion as their tasks are unclear. This makes it difficult for an employee to work for the banks. The lack of poor leadership can have consequences, such as hazy goals and targets, lack of clarity in the chain of command, non-existent and unclear job descriptions, and disorganised directives.
Another critical factor affecting the retention rate in the banking sector is poor skillset and improper training of employees. There is no doubt that technology and modus operandi of banks are ever-changing. When a newbie joins the organisation, the HR department is responsible for the proper onboarding of the employees which is considered to be part of employee training. It has been seen that banks are providing only entry-level training to their employees (Rook, 2017). A little or no training is being given to experience and senior employees. This makes their skills outdated and they are unable to carry out their routine tasks effectively that leads to poor performance ratings. This would also affect the expected incentives as they won't be able to fulfill the required criteria.
Another major issue affecting the morale of employees and forcing them to leave the banking sector is the working culture of the banks. The HR department is not taking proper care of the cultural diversity in the banks. Still, in some banks, women are paid lesser than men for doing the same amount of work. In addition to this, safety against harassment in the current working culture and inappropriate conduct from the management along with a complex communication system and follow-through are enough reasons to leave the job of the banking sector for the employees. It is required from the banks and their management to consider and respect ethnicity, gender diversity, age, sexuality, and other important factors associated with employees.
It has been noticed that poor talent acquisition and hiring process can also result in poor retention rate in an organisation. Developing an effective talent acquisition and hiring process is often ignored by the banks. This is due to the fact that banks are overloaded with tons of work and they want people to reduce that stress. Therefore, they fill the vacant positions in no time. With this type of hiring process, organisations may be able to tackle their short-term hiring needs but employees may not stay with the organisation in the long-run. Banks are required to have a systematic hiring process so to cater to the requirements of both the short and long-term hiring process.
Banks are not providing enough monetary and non-monetary benefits to their employees which are leading to dissatisfaction and frustration among employees. Every organisation has a pre-defined pay scale which can be increased based on the performance of the employees. Apart from this pay structure, certain incentives are also required to give to employees for their best performance and to motivate them to sustain their high performance. Incentives are characterised by motivational powers that can boost the zeal of employees to work in the best way possible and help theorganisations to achieve their goals. These incentives can be either bonus, pay raise, piece rates, sharing profits, vacation passes, etc. However, Nankerviset.al (2016) noted that a lack of monetary and non-monetary incentives may reduce employee productivity and morale as employees usually work hard to fulfil the expectations of the managers to earn an incentive. In addition to this, Takawira, et.al (2014) argued that a lack of transparency in providing compensation and incentives can also be a major demotivating factor. Therefore, all these points are required to be taken care of by the HR Management of the banks.
The aforementioned issues related to employee retention and hiring are not irresolvable but with proper due care and measure, these can be resolved or mitigated. For instance, Nankervis et.al (2016) advocate the use of various monetary and non-monetary incentives based on performance. However, banks are required to provide the right incentives to boost employee morale and inspiration. The design of the incentive plans should reflect and support organisational goals and values. Consequently, policies regarding incentives and benefits should be implemented throughout the organisation. The HR manager is required to implement the compensation and incentive planning policies. Human resource development can help in individual career development and management (Idris, 2014). Career management is characterised by a well-structured career planning and management. The purpose of the successful career planning and management comprises fulfillment of the personal and organisational goal, work-life balance, financial security, and goal achievement. Ibidunn, et.al (2015) argue that an individual’s career growth opportunities can help the employees to stay motivated.
Khalid, et.al (2015) suggested that the employee-manager relationship is the distinctive interpersonal relation that depends on various factors within an organisation. Establishing a healthy working place for employees to interact among themselves is a part of employee relations within a firm. It has been seen that organisational culture directly depends on workplace relationships. Human resource manager should facilitate a place or an environment where the relationship between employees improves and become friendly and interactive. It has many benefits such as it improves the employee's ability to discuss the work among his group and get a suitable suggestion. This not only increases the innovation and improves the modus operandi. Workers give half of their lives to their work and these relationships help them to stay motivated for working long in the office. However, Ibidunn, et.al (2015) argue that these relationships can have both pros and cons from the organisational perspective. For instance, a negative relationship between two members of the same team can affect team productivity and a healthy working environment. Also, over the interaction between employees may result in the loss of valuable time and productivity gets affected. In addition to this, the major concern of establishing an over-friendly environment may result in groupism and if the organisation takes any action against one member of the team, then this may affect the morale of the whole group and in the worst case, they may end up resigning with that member. Therefore, there has to be a right balance between the two scenarios discussed here. It is a part of human resource planning and should be handled with utmost care.
Adams, et.al (2016) emphasised on the organisation's performance management goals to curb the rising employee turnover issues. First and foremost, it is required from the management to avoid unrealistic expectations for employees and teams. Setting up an unachievable task for the staff can have many consequences. It can not only mental and physical health of employees but also the organisations and its success and productivity. As a part of performance management, HR is required to keep a check on the employees' ability to perform the task set for him/her. In case the employee is unable to finish the task in the defined deadline, the task can be completed in sharing with other employees. Also, it is required from the management of the banks to clearly define the task requirement and expected outcomes. This would help the employees to create a mind map or journey mapping (Ibidunn, et.al, 2015). Most importantly, management should listen to staff and support them whenever possible. Rather than setting an unrealistic deadline, it is required from the bank managers to mentor the employees regularly and listen to their problems. Also, in the times of peak workload, the manager should transform into a leader and lead the team. Furthermore, managers should maintain proper transparency in the process of providing benefits and incentives (Adams, et.al, 2016).
Focusing on the hiring and talent acquisition process can also improve the quality of employees being hired by the banks.Tajuddin, et.al (2015) mentioned that hiring an employee is a continuous process of talent recruitment. In order to become successful in this field, the hiring managers of banks is required to tailor the modus operandi of hiring employees and targeting the potential applicants. They need to first evaluate the requirement of the organisation and filter those candidates only that matches to at least 75% of the organisational expectations. In the testing and screening phase, it is required from the manager to find the applicant that fit to the organisational culture, roles, and goals. Also, applicants should be judged based on their behaviors and personality traits. With this type of hiring process, organisations may be able to tackle both of their short-term and long-term hiring needs. All the banks are required to have this systematic hiring process so to cater to the requirements of employees.
At last, the role of Human resource planning is crucial to tackling the low employee retention.Nankervis, et.al (2016) say that workforce planning is one of the important topics that HR executives cannot ignore at any cost, especially when the organisation is facing low retention issues. This is due to many reasons. The first and foremost is that it helps in fulfilling the organisational demand during the shortage of workforces. As most Australian banks are facing issues of low retention, the demand planning aspect of human resource planning can help in creating a well-proofed plan for meeting both internal as well as external demands of banks. Nankervis, et.al (2016) mentioned that a good workforce planning considers the work-life balance while preparing the work plan for an organisation. It has been seen that even paying more for overtime does not work for all employees as they are driven by motivation towards their job. The human resource manager is required to keep the right balance between employees' personal and professional life in order to keep them motivated for a longer duration. In addition to this, a flexible working environment and relaxation in working hours once a month can help in maintaining a proper work-life balance.
Before ending on a high note, it is concluded that losing a loyal worker iscostlier than hiring a new one. Employee retention rate is the parameter to measure the organisations’ performance and it also tells about an organisation's reputation and goodwill in the market as it decides the performance rating. In this essay, it was highlighted that banks should work on keeping the right work-life balance. Also, a proper and regular training to employees can help employees to hone their skill set and improve their performance. Also, incentives should be provided to employees based on their performances. In addition, a negative relationship between two members of the same team can affect team productivity and a healthy working environment. Hence managers are required to take care of the healthy relationship between the employees.
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