Banks Must Get Cracking On Finding 'People Next'

About two years ago, McKinsey reported that a manpower crisis loomed large over top European Banks, which by 2011 would struggle to fill between 25 to 40% of their senior or strategically important positions. Before you dismiss that as symptomatic of ageing Western economies, read this: thanks to the recruitment freeze in the wake of automation, reduction of staff under the Voluntary Retirement Scheme and the impending retirement of 175,000 employees, India’s Public Sector Banks are also staring down the staffing barrel. Even a tiny nation like Nepal is beset by these woes - by the industry’s own admission, not enough attention has been paid to training and development of human resources.

So, will the future of banks be held to ransom by a talent shortage? Unfortunately, I think the answer to that is a foregone conclusion. Countries like India have added to their woes by disbanding traditional institutions which were set up to deliver banking education. Even if they were to re-establish these, the question is whether a banking career will attract the fickle-minded job-hopping members of Generation Y and if it did, would it succeed in retaining them in a high pressure environment of consumer expectation, market competition and regulation.

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Imagine Gen Y executives serving Gen Y, Gen X and senior customers. The training, education, empowerment and enablement required to handle this situation is completely different from what was appropriate in the 1960’s and 70’s. This may result in plenty of ‘banking careers’ but very few ‘career bankers’! My view is that banks will have to quickly evolve a next generation approach to managing their people, founded on innovative policies geared to attracting, nurturing, developing and retaining them, else bid goodbye to their chances of staying competitive in the next decade.

What can they use besides the tools of screening, training, development and career planning to motivate, sustain and really engage their employees? Deploying social media platforms to deliver education, collaborative learning and access to a wider peer network may be one way to involve Gen Y bank workers. Adopting new business models which are technology driven rather than manpower-reliant can reduce the dependency on human resources. Do you know of other ways to tide over this problem?

Rajashekara V. Maiya is Lead Product Manager at Finacle Infosys technologies limited.