For any organization dealing with people requires a good human resource management efficient working of the organization. Banking has been and will always be a "People Business". Efficient and effective management of the human resource in the organization turns it a successful one.
For banking, the importance of human resource management has grown manifold because the nature of banking industry, which is mainly service based. The management of people in the organization along with handling the financial and economic risks at the wider level is the most potent challenges in front of the banking industry in any given time frame. Efficient and skilled manpower in the sector can only manage the financial risks that the banks need to take on regular basis. The Human Resource department is responsible for finding such talented manpower and placing them in right jobs in the banks.
Apart from the risks in the banking sector, the people handling the day to day affairs in the banks need to keep the customer satisfaction in mind. The people working at the front office become the face of the bank and thus it is the responsibility of the HR to make sure there are eligible people working up front. They need to make sure that the candidates selected in the banks go through necessary training before they begin their work, so that they are aware of the nuances of the core banking industry and customer relationship, better. The HR management needs to think both about the quantity and quality requirement in the banking sector and deal with the shortage in the skilled manpower supply in the sector efficiently.
Importance of Human Resource Management in Banking Sector
- Plan ahead for recruitment: The ever changing banking industry, with a steady growth in the past decade, has resulted in many vacancies and overall growth in the sector. The number of branches of Public sector has risen significantly and accordingly the requirement for skilled manpower has grown as well. The HR management team is responsible in any particular banks to analyze future requirements of their organization and steadily calibrate recruitment process.
- Maintaining a balance of experience and youth in the workforce: The changing scenario of the banking sector with emergence of online banking and core banking services, there is a need to incorporate youth energy and exuberance in work. But, there should be a fine balance between the youth energy and experienced professional, to make it a successful and fruitful combination, just like in any other sector. Hence, the HR management is responsible for maintaining this balance and undergo some cultural and management adjustments to fit in the people working.
- Training of the manpower: The technology along with the method of working in banking sector is changing rapidly. Not only the machines, but approaches to various schemes, policies and banking facilities are changing with time. The new recruit and the older ones as well, need to undergo necessary training to grasp the same from time to time. The human resource management makes sure that the people working in the banking organization are not suffering from any such discrepancy. Empowering the employees with training and measuring their performance afterwards, is what the human resource department needs to look after.
- Performance management and talent spotting: The HR management remains responsible for measuring the overall performances of the employees working in different departments. They focus more on the people who are lacking the spirit of working in the organization and try to help them improve their performance for the betterment of the bank. To give importance to the hard-work and dedication of employees, the HR department provides the adequate praise and promotion to them.
- Keeping a tab on the personal requirements of the employee: The employee in any organization seeks for his/her value in the company. They tend to work even harder once they feel they are an important source for the company and the company thinks for them in return. Providing pay perks for good works, keeping some personal information and wishing them at occasions, allowing leave and keeping a tab on the promotional and transfer requirements are some of the things that the HR department needs to look into.
- Keeping a tab on retirements and resignations: Talent retention is also the responsibility of HR department. The HR team is also responsible to make arrangements to stop the resignations that the employees are giving to a particular organization. They need to assess and analyze the reasons behind the decision of leaving the organization by the employees and work upon it to better the situation. The HR team also needs to have a record of the retirements planned in few years and make sure that they have recruitment notifications ready to fill the vacant shoes.
The banking sector is a wide financial and economical industry, which depends majorly on the workforce. Thus managing and maintaining this workforce becomes the priority for the HR department in the banks. It is also important for the HR management team to have a look at the present and possible future requirements of the banks and work accordingly with the same.