The financial services sector plays a crucial role in the country’s economy, and its human capital is the driving force behind its success. Thus, the human resources function in the financial services sector plays a pivotal role in attracting, developing and retaining talents while ensuring compliance with evolving regulations.
Despite these significant contributions, the industry is not without challenges. The human resource departments within the financial services sector encounter a unique set of challenges that require strategic and tactical approach to resolving these challenges. This article will explore the big challenges currently facing HR professionals within the financial services sector and propose possible ways to solve these challenges.
Attracting and retaining top talent
Attracting and retaining top talent within the financial services sector is a major challenge for most HR professionals. The sector is highly competitive. Today, highly skilled professionals have a variety of employment options to choose from, employees now have many available opportunities – both local and global. This simply means if you don’t treat them well, there are plenty other options available for them. Employee attrition is on the rise within the financial sector and other sectors because of this key issue.
The increase in employee turnover does not only affect business continuity or productivity, but also increases operational cost of the organisation.
It is for this reason that HR professionals have to pay more attention to their on-boarding process. This is crucial as first impression always counts. HR must carry their new hires through a proper on-boarding process, such as proper job description, and develop a mentor-mentee programme to assist new hires to settle in and cope with the culture of the organisation.
Employee Value Preposition (EVP) is very key for new hires and potential hires. These are the unique set of benefits that an employee receives in return for the skills, capabilities and experience they bring to the organisation. It is important for HR to focus on highlighting these unique opportunities such as career development opportunities, offering competitive compensation packages and the development of a friendly work environment.
In addition, providing flexible work arrangements to improve employee work-life balance can help with employee satisfaction.
Automation of HR functions and processes
The typical traditional HR function has been heavily impacted by the introduction new technology and automation of core HR operations. Major routine tasks, such as candidate screening, payroll processing and employee requests, have been automated using HR service desk in some cases.
HR professionals should, therefore, embrace the automation of its core operations and functions by equipping employees to work alongside the introduction of new technologies. HR can come up with training initiatives to equip employees with the requisite skills that align with the new system..
Additionally, HR – as a strategic business partner – can liaise with managers to identify areas that need a human resource input to streamline routing tasks by leveraging on the available technology to assist employees to focus on more strategic deliverables.
Managing the new workforce
The labour market is witnessing the rise of a new workforce known as the Generation Z: The post-millennial generation, people born between 1997 and 2013. Employers and mangers need to prepare for their arrival as they share many traits with the millennial generation, and also bring in new patterns of behaviour.HR professionals today not only have to understand how to best manage youthful, inexperienced employees, but also the unique characteristics of the generation shaped by their experiences.
Every generation has its doubts about the younger generation’s culture and technologies. Generation Z has been found to be the most achievement-oriented of the generations.
To appreciate this generation, it is important to understand the unique characteristics of this generation and how it has shaped them as learners and future employees. The most prominent of these include lack of work experience, the advent of the smart phone and social media, social justice movements, and growing up in a culture of safety. Understanding their behaviour and the distinct needs that they have in the workplace, whether a factor of youth or generational difference, will lead to better integration of the new employees and mutual success (https://cmr.berkeley.edu/assets/documents/sample-articles/61-3-schroth.pdf ).
Ever-changing regulatory landscape
The financial services sector is subject to stringent regulations due to the nature of its operations, HR professional adhere and navigate this ever-changing regulatory landscape to ensure compliance. Failure to comply with these regulations can result in severe sanctions and consequences by the regulator. These sanctions may include reputational damages and legal liabilities.
HR must, therefore, invest heavily in education and continuous training of employees to stay up-to-date with current and latest regulatory changes. HR can ensure policies and practices align with industry regulations by collaboration with the legal and the compliance team.
Additionally, potential risk can be mitigated by implementing robust auditing process and conducting regular compliance reviews.
Conclusion
In conclusion, HR in the financial services sector faces major challenges, but with strategic approaches, these challenges can be addressed successfully.
By redesigning their talent acquisition and retention models, ensuring compliance and evolving regulations, embracing the automation of HR functions/process, and understanding the behaviour and the distinct needs of the new workforce (Generation Z), HR professionals can drive positive change, enhance the organisation’s reputation, and foster a thriving work environment in the ever-evolving financial sector.
The writer is a Chartered Banker, HR Benefits and Compensation Analyst
Email: [email protected]
Contact: 0547482932
