Reported by: banking|Updated: July 27, 2017
Banking is one sector that is exceptionally impacted by the emerging technologies and swiftly changing customer expectations. The sector is also challenged by disruptors like fintechs and telcos, which strive to offer financial services with agility and speed. The traditional business models are virtually under attack and their viability depends on adapting to the realities of the digital evolution and meeting the ever-changing customer needs. Digital is what the banks have to rely on and they cannot afford to overlook social media. In this futuristic journey, it is the HR in banks that has a pivotal role – in deciding on priorities, in positioning the bank as a resource for talent and in devising strategies and execution plans to ‘future-proof’ the organization. It is a challenge to create an environment that facilitates and manages change.
To what extent the efforts of Indian banks in general in ‘future proofing’ their personnel have been successful?
“This question would have to be looked at from two perspectives,” says Makarand Khatavkar, group head – Human Resources, Kotak Mahindra Bank. “One is our ability to retain talent and the second is from the outlook of developing the candidate to take up future roles and not become redundant in this fast-paced world of digitization, automation, artificial intelligence, big data analytics and the like,” says he.
According to him, retention of talent continues to be an area of focus across banks. “As one of the leading private banks in the country, with a strong group legacy, we have put in place several best practices, which enable us to streamline our efforts and position ourselves as an employer of choice. On the employee development side, we strongly believe that an organization needs to constantly invest in skill upgradation of its employees. All our training and career management initiatives are built around our competency framework, which is designed keeping in mind the knowledge, skills and attributes required as one transitions from ‘managing self’ to ‘managing others’ to ‘managing managers’ roles. These competencies are aligned not only to the current role but also to ready talent for the future,” he says.
Khatavkar points out that Kotak Mahindra Bank was amongst the first movers when it comes to offering a range of digital solutions to customers and one of the reasons that the bank has been able to do this was the top down approach in bringing about a mindset shift. “This resulted in the alignment of all our HR processes as well, starting from recruiting to a talent management framework, which focuses on developing and retaining talent keeping in mind the future talent requirements of the company. The focus is not only on an employee’s performance today but also on the potential for tomorrow,” he elaborates.
C.P. Giri, general manager – HR at Canara Bank, looks at it from a different perspective. He says India is set to be among one of the top countries for human capital in the next two decades as at present, half of its population is around 25-30 years of age. “In the demanding and competitive talent market, ‘future proofing’ gains much importance. Banks should come out of ‘antiquated’ hiring practices and find out novel ideas for recruitment and retaining talents. Banks should embrace the dynamic changes happening around the globe, especially in human resources management and information technology,” says he.
Canara Bank, he says, has embarked upon a novel method of recruitment of probationary officers (JMG scale) by imparting them with one-year comprehensive training on banking, including CBS, at premier institutions leading to a Post-graduate Diploma in Banking & Finance (PGDBF). The course comprises nine months class room learning and three months of internship at the bank’s branches. “This initiative is to attract bright graduate students to pursue a career in banking and provide them with the necessary training, knowledge and skills through an alternate channel to become a competent banker from day one of their joining the bank,” he says.
In YES Bank, future proofing starts with orientation of the organization from the top and involves understanding and accepting major trends that are shaping not only the banking industry but other service delivery models as well, says Deodutta Kurane, group president, Human Capital Management at the bank. “Based on understanding of the above factors, employees (different levels) need to be re-oriented in terms of knowledge, skills and attitude to effectively contribute to the changing scenario. We focus on demand-led skilling; shifting focus on D.I.C.E (Design Thinking, Innovation and Creativity-led Entrepreneurship) and soft skills from traditional skill building programs and work on the A.R.T (Alliances, Relationships, Technology) philosophy to create large scale, lasting solutions to close employment gaps,” he explains.
Kurane mentions that the challenge of finding suitable candidates for various banking roles arises from the fact that knowledge and skills required for digital and ‘new age banking’ are significantly different from the hitherto traditional banking roles. “This is applicable across management levels, but more so at the top. Against this backdrop, we have adopted a multi-pronged strategy for talent acquisition and development,” says he.
He adds further: “One of the key innovations adopted by us to ensure that top level candidates are suitably skilled for these challenges is a constantly refined learning and development program. We have constantly engaged with global management gurus such as Ramcharan, Porter Erisman (author of Alibaba’s World) as well as design thinking leaders to upskill our top management.
Y-PEP (YES Professional Entrepreneurship Program) is our unique talent acquisition initiative aimed at tier-1 business schools. This year, we have on boarded 106 professional entrepreneurs, taking the talent pool to over 1100, including previous batches. This forms the talent pipeline and the handpicked young leaders are groomed in various business functions. They then internalize the YES Bank DNA, which includes value based leadership and D.I.C.E. Similarly, the internal talent pool is the preferred choice for emerging leadership positions, especially in branch and retail banking. A robust and well-defined process is in place for internal talent identification.”
The second part of the strategy, says Kurane, revolves around developing and grooming internal talent across levels for the future requirements of the bank. “We have a commitment to developing our human capital and we invest in all aspects of people development, including leadership training, product/process and compliance training and service and professional effectiveness. This ensures a strong second level leadership pipeline who can step into top management roles,” he adds.
Khatavkar maintains that at the top level in the bank, the average tenure served by an employee with the organization is amongst the highest in the Indian private banking space. One of the ways the bank has been able to retain key talent and fill in top management positions internally is by having in place an integrated talent management framework, which is applied across mid and senior level management cadre in the organization. The succession planning efforts are directly linked to this robust framework.
“Talent management in our scheme of things is a four-fold process wherein the first step is to identify critical positions basis impact of the role on the organization. Post this, all critical roles are mapped to high-potential employees, basis their readiness, who are identified through a talent review process. An intervention and a succession plan is created for each critical position depending upon the ability of the organization to retain the existing role holder and the availability of the successor,” says Khatavkar.
He adds that the ability to mobilize resources has grown multifold over the years in the bank since it has been able to capitalize on the synergies of being a diversified financial services institution. “We have grown to become one of the largest private banks in the country with an extensive range of offerings which in turn has opened up multiple opportunities within the organization for our top talent to explore. Such diverse exposure helps us keep a talent pipeline ready for key roles across levels including the top management. Also supporting talent mobility within the system is our internal job posting policy which allows an employee to seamlessly move within the group to a role of one’s choice,” says he.
Canara Bank has been able to evolve hiring processes which are proactive, upfront and speedy, which Giri says has greatly lessened/removed the possible hardships in finding and acquiring qualified talent, which are in demand and are quickly snatched up with lucrative offers by private organizations. “Identifying critical positions is the focus of our succession planning efforts. Our manpower study factors branches/business growth plans, retirements, exits, demographic analysis etc and accordingly, a long-range recruitment plan has been put in place. Regular, periodical assessments are conducted and compared to the current and future vacancies and accordingly, recruitment plan and succession plan are suitably revisited, whenever required,” says he.
He also speaks about ‘Executive Grooming’, a novel system evolved in the bank to help the executives get acclimatized with their new roles and responsibilities. The bank’s executive development programs are ordained to inculcate these competencies in the candidates and help them in the process to make informed decisions. The bank has also evolved Manthan Strategy Meets, top management committee and business plan conferences where top level executives meet periodically to review strategies and future/changing dynamics in industry.
Is attrition a cause for worry for banks?
Kurane of YES Bank says a certain level of attrition is inevitable and desirable for continuous induction of new employees. “However, attrition does have a price in terms of hiring, retention and productivity. We believe that one of the most sustainable ways of enhancing retention is engagement of employees, across levels,” says he.
He elaborates: “We firmly believe that it is essential to have a strong engagement with our human capital to make our organization a ‘Great Place to Work’ with the highest levels of ‘Happiness and Trust’. To achieve this, we follow the 5 Cs Employee Engagement Model – Culture, Communication, Career, Connect and Care. We engage and develop our human capital through various initiatives, focusing on disseminating/re-connecting our people with the institution’s core values, by creating an intentional Culture, encouraging open and honest Communication, strengthening Connect with employees and community, supporting career development and showing that we Care as an organization.”
He emphasizes that managing attrition is a focus area for the human capital management team in the bank. The bank had launched L.E.A.P. program, particularly to address attrition, targeting senior and middle management for creating Leadership Excellence by Minimizing Attrition, Maximizing Productivity and eliminating gender biases at workplace. “Through LEAP, we intend to create the fastest ‘time to implementation’ of strategies and tactics by giving our leadership team inputs, aimed at maximizing ‘productivity’ and minimizing ‘attrition’. It is a system expected to provide a candidate with his or her career graph clearly charted to provide direction in terms of career growth. However, having such a defined career graph is neither possible nor desirable since the VUCA, or volatility, uncertainty, complexity and ambiguity, world today offers several multi-dimensional career options,” says Kurane.
For Giri, success not only depends on recruiting the best talent but also matters in retaining it. Towards this, Canara Bank has taken several measures, including a mentoring concept for fresh recruits with an exclusive department to provide impetus with designated mentors at each circle to take forward the concept at micro level, a talent development program called ‘Talent Bank Scheme’ to create a pool of talent in the identified critical functions thereby providing opportunities for generalist officers to don the role of specialists and occupy key / critical positions in future, a defined career path providing speedier career progression under fast track promotion, facilitating an officer in Scale I to reach the top management cadre within a span of 14-16 years, job rotation/transfers, which provides an opportunity to serve in various departments so as to develop an overall expertise to handle higher position, training as incentive to top performers from across the country, and a comprehensive incentive scheme for capacity building to encourage employees to augment their learning curve by taking up specialized courses offered by institutes like IIBF, NISM, IGNOU and UGC recognized universities.
“All these measures have helped us to defend against attrition,” says Giri.
For Khatavkar, attrition levels in Kotak Mahindra Bank are among the lowest in the industry. “Having said that, we are a young bank with a young workforce and keeping such a pool of talented resources engaged is not easy and requires concentrated efforts. We do have a range of reward and recognition programs which keep running throughout the year. We are a performance-oriented organization and our reward mechanism is built around the same philosophy,” says he.
But, he hastens to add: “Talent retention goes way beyond rewards and recognition.”
He explains that the bank has a four-dimensional approach to employee engagement and the model revolves around open and transparent communication, walking the talk, providing learning and growth opportunities and driving a performance-oriented culture.
INDIVIDUAL CAREER PLANS
“Individual career plans is one of the practices that we have in place as part of this model. Structured discussions are held by the HR relationship manager along with high performing employees at the mid to senior levels. These discussions help us in gauging the aspirations of the employees and prepare a documented career graph spread over the next few years. We also encourage a lot of cross domain experience across products by ensuring seamless mobility within all group companies for the employee, aligned to his/her aspirations.
“In addition, it is also very important to pay attention to the wellbeing of the employee to ensure retention. A low level of wellbeing in an otherwise highly engaged and productive employee might lead to burnout and subsequent attrition. We are very particular about providing a supportive environment to the employee which is challenging while at the same time is nurturing, both professionally and personally and helps in the overall wellbeing of the employee,” says Khatavkar.
Khatavkar insists that the digitization efforts in a bank should encompass the HR too. He says like all other departments, HR is going through a massive digitization and automation phase. The end user experience is going through a massive overhaul which makes it imperative for HR to adapt and change its information management and service delivery mechanisms.
“We started our automation journey some time back. At present, we are going through an integration process to make the information flow seamless by interlinking our existing systems. A lot of work is taking place on the digitization front as well to enable all stakeholders, both internal and external, to easily access information,” says he.
Kurane says emphasizes that digital technology is transforming how people work. This calls for a fundamentally different HR strategy, he says, adding: “We were the early adopters of technology with full-fledged HRMS since 2007 and we are in the process of upgrading to a world-class, cloud-based HRIT system. We will also deploy an HCM mobile app with best-in-class employee interface and employee experiences as part of the overall digital roadmap for the human capital function, which will include employee lifecycle HR processes, digital processing and database management systems, analytics and seamless sharing of key HCM metrics within the function.”
He reveals that HR information is made available to respective stakeholders in a seamless manner from the core HR system. This includes decision-support MIS/analytics, notification triggers and governance dashboards. The HR department also has a live digital display – Di-Wall, or Digital Wall, which displays updated HCM metrics pertaining to hiring, people demographics and key organizational messages on a real-time basis.
In Canara Bank, the function of human resources management is generally administrative in nature but to reduce the manual workload, it has started electronically automating many of the processes by developing and introducing IT oriented software applications, leading to the development of specialized Human Resources Management System. “During 2008, we introduced a new package for HRMS, developed by PeopleSoft. Various IT initiatives in HR activities have resulted in reduction in administrative work, speed and efficiency of HR activities, accuracy, transparency and consistency of information, timeliness of information process etc apart from reduced staff requirements. IT initiatives in HR cover recruitment, leave administration, payroll, reimbursements and benefits, training, staff provident fund / staff welfare fund & pension fund, annual performance appraisal, employee self-services etc. Total automation of HR is our critical success factor on the HR front,” says Giri.
Banks have to heavily depend on training of its staff. At YES Bank, there is a YES School of Banking, which is the bank’s learning and development function and is the first and only one in the Indian banking industry and which is dual ISO Certified in Quality Management. Kurane says most of the bank’s training happens in-house via classroom, e-learning and on mobile. The YES School of Banking also partners with external agencies to impart specific product and behavioral skills.
“We have a strong focus on learning & development interventions to equip our executives with skills and knowledge that are correlated to strategic business goals as well as specific job requirements. Focused skill builder programs are conducted, supported by certification programs and e-learning modules across functional, behavioral and leadership categories. Skill-sets derived out of business priorities like design thinking, innovation, creativity-led entrepreneurship, or (DICE), productivity, cross sell, service culture and compliance culture are carefully embedded into training interventions. We have devised various training programs such as YES L.E.A.P, Where Eagles Dare, YES I Can Do It etc,” says Kurane.
In Kotak Mahindra Bank, all the training programs are chosen basis alignment to the requirement of the business rather than basis popularity or trend. These programs can be developed and delivered both in-house as well as with the help of an external agency depending upon the target audience, spread, timeline and complexity of the program.
Says Khatavkar: “We have a full-fledged in-house behavioral training team as part of HR which is responsible for all training and development needs of the organization. Apart from this, we have functional training teams aligned to each business within the bank. We have a wide variety of programs on offer depending upon the level and role of the employee. Some of these are mandatory and the others are need based. Apart from the bouquet offerings, we also customize programs depending on the need of the business.”
Giri says Canara Bank has designed a training system, which is customized to augment the learning curve of the individual and make him/her more competent to face the challenges posed by the changing banking scenario. There is an Apex Staff Training College at Bengaluru, which is a nodal office overseeing and monitoring the training activities within the organization. The Staff Training College has been re-organized as a separate vertical. An officer in the rank of general manager, heads the college. He is also designated as Chief Learning Officer of the bank.
“We have created a formal circle level forum called Training Advisory Council to carry out the specific training need analysis of cluster of branches/ business units in a region so that training intervention is focused on the specific business profile of the branches in that region. The newly recruited officers/clerks are given induction training to acclimatize them with intricacies of banking operations. The direct recruit officers are posted to branches handling different functional areas to enable them to get a feel of the entire banking structure. Most of training needs on banking domain is met by our in-house training vertical. Apart from our in-house programs, we are nominating our resources to various other external programs, including programs abroad. Identification of employees for training is being done at grassroot level, ie branch / office by the branch head / section head in the very commencement of the year taking into account the employees’ present level of skill, knowledge, placement, area of his/her operation, areas of strength/weaknesses. Specialized trainings for domains like IT, risk management, treasury, HR, forex, etc., are arranged at various institutes of repute like NIBM, JNIBF, CAFRAL, CAB (RBI), XLRI, IIMs etc,” says Giri.
The bank’s Staff Training College has conceptualized a novel ‘high-sensitization’ training program – “Utthan’, which is rolled out to all the staff members, in composite groups of clerical cadre to Scale-V. Giri says the program is intended to propitiate positive vibes in staff members in terms of quality customer service, sense of belongingness and personal effectiveness which will ultimately augment the business curve and act as a fillip to our banks journey towards occupying the numero uno position in the days to come.
MENTORING TOP MANAGEMENT
Do banks have to have mentoring programs for the top management?
Giri says Canara Bank has its Manthan Strategy Meet, Top Management Committee and Business Plan Conferences, which are the forums where top level executives meet periodically to review the strategies, transformational agenda and future/changing dynamics in industry. The chairman, MD & CEO, EDs and other directors often involve themselves in the forums and regularly interact with the top executives, mentoring and guiding them continuously, he adds.
Kurane says it is a practice in the bank to undertake constant reviews of the succession plan with the list of critical positions and their proposed successors (immediate as well as long-term) based on parameters such as individual criticality, business continuity, technical understanding, professional maturity, personality traits, fitment and potential to take on higher responsibilities. “Our leadership team also undergoes an extensive leadership capability program. Our DICE (Design, Innovation, Creativity, Entrepreneurship)-led leadership development programs ensure future-ready training initiatives. International faculty and leading consultants like Ramcharan and Porter Erisman are brought in to interact and groom the senior leadership,” says he.
Khatavkar says banking is getting highly technology driven, but he is sure the requirement for traditional roles will also continue for the next few years. “Even though there are multiple touchpoints, branches are still going to remain the primary touch point for customers given the high emotional involvement and dynamics of the Indian banking industry. Similarly, maximum new business acquisition would continue to happen by directly reaching out to the prospect. The client would still insist on meeting the relationship manager for advice on fund management. It will take some time for the customer to adapt to new age digital banking,” says he.
But he is quick to add that the mindset shift of the customer has started, and a lot of digitization and process automation has taken place to bring up the service efficiency levels of the bank. “As much as 8% of our acquisition is through digital channels and being a new age bank much of our processes run on technology-enabled platforms. As a part of this transition, much of our HR delivery has also been automated and digitized, thus encouraging self-service within various stakeholders of the department. Much of our onboarding is through a tool wherein a candidate is expected to complete all tasks online, including document submissions. Many of our training modules are delivered online through our Learning Management System, and all HR queries are routed through our query management tool. In fact, we have recently gone live with our digital HR platform, wherein all HR related information is available to employees at the click of a button and this can be accessed by the employee while on the move as well as through a smart phone. These coupled with our training interventions have helped us to bring about a mindset transition and gear up for the future,” says he.
He also says when it comes to alignment of all the teams to this new mindset, the bank has been able to do a fairly good job. “It is evident in the fact that we were one of the first movers in the industry to offer a range of digital solutions to our customers. Much of this came through a top down approach which has helped to a huge extent. Given the demographic of our workforce which comprises a large population of millennials, comfort and familiarity with technology comes naturally to us,” he says.
Giri of Canara Bank too says information technology has become an indispensable part of contemporary world especially banking and its adoption and application has equally affected human resources management. “Canara Bank is one of the front runners in implementing information technology in various segments of banking activities. Technology initiatives were introduced in HR activities also. All employees are trained in updated modules, technology products regularly on an ongoing basis. Further, the new generation employees being tech-savvy, adaptation to technology has been easy, quick and smooth,” says he.
Kurane maintains that with rising use of technology in banking services, recruiters are looking at different skillsets that would help them scale their business, keeping the cost low. Banking professionals are expected to possess these skills apart from specific functional competencies. “Given this, we are bound to witness huge re-skilling efforts among banks, especially in the public sector banks. Banks today need a ‘digital workforce’ to converge diverse platforms like mobile solutions, social media, biometrics, etc, to render seamless and highly customized banking services. At YES Bank, in line with our Vision 2020 of being the finest quality big bank in India by 2020, digitization is core to most of our processes – internal as well as external. The bank is also one of the first organizations to launch ‘Facebook at Work’, achieving 100% activation within 45 days. This has significantly improved collaboration and cross-functional communication across the bank. What is unique about our approach is that our HR’s digital transformation has begun with a change of mindset within the organization, prioritizing connectivity, real-time operations, platforms, automation, and mobile-first HCM solutions,” says he.
Is HR functions in banks different from that in other enterprises, say retail or infrastructure?
Kurane defines banking as a highly dynamic sector, which makes it imperative for HR professionals in the sector to be aware of the changing rules to be on the top of the game. “Being a highly regulated sector, human capital management is by far the most critical function in banks. Every corporate is involved in various functions and thus requires a highly effective team and appropriate manpower to run the show. Corporate and strategic goals are translated into viable realities and profits only with the help of employees (right talent) that play their due role in achieving the set targets. This idea has been realized by top managements in progressive banks. Private Banks, unlike their public sector counterparts, have realized that talent alone cannot win the race, but, has to be coupled with the right strategy,” says he.
Giri points out that banking sector has grown from a few institutions primarily involved in deposit acceptance and trade finance into a complex multi-player market where large number of commercial banks, financial institutions and specialized banks are operating with various products and activities. “It has become a complex activity within the financial market linked directly and indirectly with an overall national growth and its impact as an integral part of regional segment of a global banking environment,” says he, adding the sector is giving more emphasis on customer satisfaction. “Banking has turned itself into a more market-based business where banks have expanded their reach more to customers’ door steps in a big way, thus making banking more practical. Human resource management is quite different from management of physical assets. Human brain has its own peculiar chemistry. The work force constituting all levels of employees is constantly thinking in many dimensions. Its strong sensory and decision-making capacity has to be greatly emphasized by the employers. This has further highlighted the need for proper deployment of manpower with appropriate skill sets to run banks efficiently,’ says he.
He also believes that HR function in banks has fared well, especially in public sector banks, in view of the HR initiatives like defined career path, learning opportunities, training, job rotation, mentoring etc., besides several employee benefits / perks /incentives. These also have contributed and helped the banks to maintain low attrition.
Khatavkar too strongly believes that banking as an industry is different from other enterprises, primarily because of the high emotional involvement of the end customer. This industry thrives on trust and its reputation, he says, adding: “A strong banking system is the base required for any economy to prosper and hence, banks are required to work under strong regulations closely monitored by various regulatory bodies. Regulations are driven heavily by political and economic change and is subject to constant change. Alongside, there is a huge transformation underway with traditional banking being replaced with new age digital banking and organizations are striving hard to keep pace.”
He maintains that while there would not be a huge variance in the list of deliverables for HR across industries, what varies is the order of priority of the deliverables. The HR priorities in the Indian banking scenario, according to him, are: