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Human resource management (HRM) function plays a meaningful role in creating a sustainable and productive work environment for organizations. The changing banking environment and altering circumstances are affecting the way human resource function is delivering its services and practices. This shows a need to explore the way HRM practices can be delivered in a way to affect social and environmental factors at the workplace. Banking institution is still in the process of exploring fit-for-purpose people for HRM functions in a way to enable HRM to have sustainable effects on the business.
There are three emerging themes of the changing and evolving role of the HRM function: the infusion of the function with diverse capabilities, the importance of driving agile working culture, and the emerging focus on employees’ experience using data and technology. Indication that HRM function is moving in the right direction, although more requirements are still to be met. In organising the HRM function, a cohesive approach is required for conceptualising, planning and executing a shift in how HRM function shall operate in the future to understand external and internal factors of change with sustainable delivery of HRM practices for impacts on the workplace, society, and the wider environment.
As in many industries, financial services sector across the world are currently experiencing diverse disruptors in many forms, from a shifting regulatory landscape and the rise of digital technologies to varying behavior of customers. The introduction of new digital technologies has a multiplier effect on the development of the economy such that, it aids in boosting productivity, reduces business costs, increases
the availability of information and reduces barriers to entry into new markets.
The banking services sector is in a middle of a storm. New technology vectors are constantly evolving, which will fundamentally reform many of the core elements of the banking value chain, e.g., shifting regulatory landscape, the rise of innovative digital technologies, etc. Customers’ expectations are changing; they are increasingly choosing financial providers and advisors who are able to provide personalisation services that can be delivered with transparency and clarity. This trend will go up as market challenges, volatility, and low interest rates will put pressure on investor returns. In the context of human resource management (HRM), given the environment businesses operating in today’s world, for HRM function to be more strategic and aligned with the transformation of businesses and to continuously stay ahead of the curve on human capital management (HCM) strategies and initiatives, it needs to enhance its adaptability and sustainability. It contends that to be sustainable, HRM function has the opportunity to leverage on HRM practices and processes to support the achievement of organisational objectives for sustained competitive advantage. In the direction and choices in which HRM function transforms, appropriate initiatives to be taken depends on the needs of the business and its people. The change or transformation can occur in the HRM structure, HRM strategy, and HRM systems and processes, when the HRM practices are redesigned to better reflect internal or external requirements of the business.
In this regard, in defining how HRM practices are done and delivered within an organisation, it is important to understand the nature of the HRM change that contributes to organisational performance and effectiveness. In fact, knowing the distinction between change and transformation can be essential to an organisation’s success and possibly its survival. HRM transformation “as the process of fundamentally re-thinking and re-chartering the HRM function or department in an organization”.
HRM change and HRM transformation are not the same; the former refers to a fundamental reconstruction of the HRM function, i.e., changing something that already exists, whereas the latter concentrates on discovering new things. HRM function has moved to a new service delivery mechanism of having service centres, centers of expertise, or outsourcing and yet still delivering the same old HRM services, the function has changed but not transformed. Likewise, changing any single HRM practice, such as recruitment, training, and performance management, does not lead to a real transformation.
However, the entire array of the HRM structure change and practices collectively adds value for key stakeholders, without any transformation occurrence. The concept of HRM transformation goes even further when it is further supported by other HRM literature. It is considered as transformative HRM practices when HRM functions embed analytical and sophisticated systems of thinking in order to create the kinds of understanding that drive better workforce strategies and workplace outcomes for the organization. HRM transformation must change both HRM behavior and work outputs in such a way that the changes add value for key stakeholders. Whereas, changing one aspect of the HRM practices makes it better, but it does not link it to value-adding agendas. For example, changes and improvements in the customer connections, individual abilities, or organisation capabilities are constituted as just HRM change.
Accordingly, for organisational and business sustainability, HRM function must engage with the new rules of business sustainability and align its organisational activities in view of that It is not just making money and ethical business decisions. Research has shown that by investing in employee-based initiatives such as conducive working environment, an inclusive culture, green initiatives promoting environmental efficiencies in the workplace, talent development, beyond the minimum requirements of employment law, a business can reap the benefits of improved employee motivation and productivity, while contributing to a healthier society. Given the landmark change occurring in financial services industries, a progressive and forward-thinking HRM function is critical to ensuring organisations’ ability for a smooth transition into the digital age.
Organisations need their HR leaders to help lead the process of internal business transformation in order to create the capability, capacity, and organisational culture needed to not only go through current market volatility but also create the foundation for continued profitability. With a multi-generational workforce with different expectations, talent would want to work in an environment where they can do their best work and make a valuable impact. Considerable changes have taken place from the year 2006 onwards in how work is performed. There is a rise in the use of technology such as smartphones, cloud services, virtual networks, and web-based services, and these technologies are increasingly becoming mainstream. The impact of the rapid digital growth has meant that organisations have had to adapt to new market expectations. In the context of banking institutions, banks have responded by establishing digital business strategies to digitise the bank’s operations and products offerings based on customers’ needs.
The field of HRM is growing and is expected to continue as an area of conceiving, empirical, and methodological development. HRM function of a banking institution changes or transforms in response to the increased competition for digitised banking transformation and what this means in terms of managing human capital requirements for sustainable workplace environment of the future. The main reason behind selection of looking into banking sector is that the future competitiveness and growth of the sector have more potentiality in increasing employment and improving.
In order for HRM function to stay relevant for the years to come, current evolutionary changes will need to make way for a more transformative or disruptive revolution. HRM function in Banking company is moving in the right direction, although more requirements are still to be met. To be transformative, a true HRM transformation needs to be integrated and aligned with a business-focused approach to reinventing the way HRM delivers its services and practices to its key stakeholders. Therefore, the role of HRM function in helping organisations become more sustainable can be demonstrated in different ways, and there is a need for a deep understanding about sustainable workplace environment practices. This requires new pattern of thought and behavior, where HRM looks at how the function can respond, drive, and re-imagine employees’ experience using data and proper employee management system in improving workplace management effectiveness that can lead to business impact. HRM function has an inherent accountability to consider the broader implications of HRM decisions, not only on employees, but also on their families, the larger communities, economies, and societies in general.
The writer is the Company Secretary of City Bank PLC.
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