In January of this year, the Chief Executive Officer of the Royal Bank of Canada, Dave McKey said that they were struggling to acquire talented, skilled and competent employees. Bank jobs have always been highly coveted for candidates.
But as tech firms are redefining our society and business practises on a near daily basis, banks are now failing to attract skilled candidates, especially in sectors such as information technology, artificial intelligence, machine learning, mathematics and software engineering.
This shortage can not only be seen in Canada, but also in the United States. As North American banks are the heart of global finance, their problems often foreshadow the challenges developing economies will have to face in the near future.
Just like any other developing country, Bangladesh already has its fair share of tech start-ups, some of which have produced great results. More firms will soon follow their path, gobbling up the little skilled manpower the country currently possesses.
As a result, banks in Bangladesh need to identify their relationship with technological changes and decide on a path for human resource acquisition and development.
In the age of the fourth industrial revolution, technology has affected every area of the business world and the financial sector. Automatic teller machines (ATM), internet banking services, electronic money transfer and telephone banking have changed the skills necessary to be a bank employee permanently.
As a result, banks have shifted towards hiring more technologically competent workers and conducting training programs to fill the gaps.
Both employment and electronic banking have grown simultaneously in Bangladesh. Consequently, employees of banking sectors in Bangladesh feel that their jobs are secure, at least compared to other developing countries.
This is primarily a result of policy decisions of our banks themselves. Besides focusing primarily on automation, they have tried to make banking more convenient and accessible for customers, thereby creating new positions inside banks. Even when employees were replaced by automated machines, they were often retained and assigned to different posts.
Nonetheless, it has been found in various studies that a change in environment or restructuring can lead to issues of job security. As a result, employees can look for alternative jobs. Canadian banks are already struggling to retain their employees as many have chosen to go into early retirements.
So besides the hiring of skilled new employees, banks can also struggle to retain the employees they have. Banks also need to prepare their employees for rapid technological changes at the same time.
Fortunately, most employees currently working in Bangladeshi banks are either really young or are middle aged. The two demographics that can easily adapt to an ever-changing workplace.
But to get the most out of these people, banks will need to train them on a regular basis. A majority of the employees surveyed for a study felt they needed training for internet banking, electronic fund transfers and telephone banking, indicating they do feel the need to change.
Training and skill development are extremely important in the face of emerging technological advances. They decrease job ambiguity and skill obsolescence, providing job security.
The good news is that the number of banks and the number of bank employees in our country both are on an upward trajectory, demonstrating that there has not been any significant downsizing. Another positive aspect is that banks are making sure that they are not overstaffed, which is also an important aspect of human resource management.
Technology might make some jobs obsolete, however it also creates new positions, demonstrated by the rising need for relationship managers to guide customers through their electronic banking activities.
A high employee turnover rate is not desirable for any financial organisation. Without dedicated employees, banks will see a drop in confidence. Additionally, service delivery will not remain consistent across the board, resulting in a potential exodus of customers.
Banks now need to introduce benefit packages for their employees to incentivise them further to change and pick up new technical skills, which will increase the productivity of their companies. It will also inspire loyalty, helping banks to retain the talents they already have.
Banks now need to anticipate the probable technological shifts in the industry and keep their employees up-to-date through training and retraining programmes. A recent study has found that across all age groups and genders, employees lean towards the significance of training. That means employees are already aware of the changing structure of businesses and are willing to keep themselves employable.
Additionally, banks need to hire technical experts who will guide companies through a rapidly changing technological scene. They can advise on technological adoption, best employee practises and training courses. These experts will also help banks to identify untapped sources of revenue and capitalise on them.
It is also recommended that the banking community and practitioners understand that, besides training, they will also need to focus on soft skills development and integrity control in order to foster a culture of high employee performance and positive attitude.
Last, but not least, a meritocratic mindset, involving sympathy and trust, are highly necessary to create encouraging conditions for bank talents to learn and grow. Otherwise, banks may need to struggle heavily against tech firms to hire necessary talents, which will not be a desirable outcome for all involved parties.
Md Kafi Khan is the Company Secretary of City Bank Limited.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.