Currently, banks are experiencing difficulties in recruiting new banking staff. The main reasons for this are heavy workload, competitive job markets and mainly the difference between available skills & needy skills for this sector.
Workforce planning and attrition are two sides of the same coin in the banking sector. Here's a breakdown of both
Workforce Planning
- The banking industry has been going through rapid transformation due to progressive economic reforms, changing demographics and fast moving technological developments.
- Banking industry has been facing multitudinous challenges such as regulatory risks, upgradation of technology, intense competition, workforce challenges and operational risk. Workforce challenge plays a vital role among other challenges.
- The major workforce challenges identified are lack of required skills, performance management, inadequate recruitment and career planning and increasing staff cost. The workforce challenges are identified using factor analysis and a conceptual model is proposed for mitigation of key challenges.
- Efficient planning and management of the workforce resources is one of the most essential requirements for the companies operating in the service sector specially in banking industry.
- Effective workforce planning in banking considers factors like:
- Upcoming retirements
- Expansion plans into new markets or products
- The impact of technology on job roles
Attrition
- Attrition is the departure of employees from the organization for any reason (voluntary or involuntary), including resignation, termination, death or retirement.
- High attrition rates in banking are a concern because they can lead to:
- Loss of institutional knowledge and expertise
- Disruptions in customer service
- Increased costs associated with recruitment and training
- In the present competitive world, the banking sector, especially of the developing economies like Sri Lanka, India, is facing lot of tough competition, talent crunch, and skill shortage.
- Losing knowledgeable and trained employees can cause serious damage to the bank's progress and performance in the market.
- Training can lead to more commitment and subsequently can reduce the turnover intentions of employees. Trainings helps a great deal in the acquisition of new technical knowledge and skills in the different aspects of banking.
- Training programmes should be carefully planned and systematically executed for the employees, since training programmes paves way for the growth and development of employees and organizations .
- Through training the employee competencies are developed and enable them to implement the job related work efficiently, and achieve firm objectives in a competitive manner.
- Further, dissatisfaction complaints, absenteeism and turnover can be greatly reduced when employees are so well trained that can experience the direct satisfaction associated with the sense of achievement and knowledge that they are developing their inherent capabilities (Pigors and Myers 1989).
- This study is a conceptual study about the role of training interventions in managing employee attrition in banking sector.
The Link Between Workforce Planning and Attrition:
By proactively planning for future workforce needs, banks can identify potential skill gaps and take steps to address them before they lead to attrition.
Workforce planning can help banks develop strategies for:
- Retention: Offering competitive salaries and benefits, following a positive work culture, and providing opportunities for career development such as promotions, can help keep employees engaged and less likely to leave.
- Reskilling and upskilling: Investing in training programs can give additional support for existing employees with the skills and newly recruited staff.
- Targeted recruitment: Focusing recruitment efforts on attracting talent with the specific skills the bank needs can help to fulfill their prominent requirements and reduce reliance on temporary staffing solutions.
By effectively managing/ directing both workforce planning and attrition, banks can build a stable and skilled workforce that is prepared to meet the challenges of the ever-evolving financial landscape.
References:
- Roy, N.C. and Vishwanathan, T. (2018). Workforce Challenges in Indian Banking Scenario – Journey from Identification Till Mitigation. Current Science, 115(4), p.739. doi:https://doi.org/10.18520/cs/v115/i4/739-747.
- Çetin, K., Tuzkaya, G. and Vayvay, O. (2020). A mathematical model for personnel task assignment problem and an application for banking sector. An International Journal of Optimization and Control: Theories & Applications (IJOCTA), 10(2), pp.147–158. doi:https://doi.org/10.11121/ijocta.01.2020.00825.
- Lucas, S. (2021). Employee Attrition: All You Need to Know. [online] AIHR. Available at: https://www.aihr.com/blog/employee-attrition/.
- Warner, M. and Zaranko, B. (2023). Implications of the NHS workforce plan. doi:https://doi.org/10.1920/re.ifs.2023.0271.
- Salman, M., Saleem, I. and Ganie, S.A. (2022). Human Resource Management Practices as Antecedents of Employee Competencies: Empirical Evidence from the Banking Industry. Management and Labour Studies, p.0258042X2211383. doi:https://doi.org/10.1177/0258042x221138362.
- www.proquest.com. (n.d.). An Analysis of Career Development Opportunities based on Working Environment, Monthly Income and its Impact on Attrition in Banking Sector - ProQuest. [online] Available at: https://www.proquest.com/openview/13fe898ac0a42dfc4c1953677ce3c4dc/1?pq-origsite=gscholar&cbl=38744 [Accessed 31 Mar. 2024].
- Prasad, R. and Singh, S. (2016). Training Interventions in Managing Employee Attrition in Banking Sector. GBAMS- Vidushi, 8(02). doi:https://doi.org/10.26829/vidushi.v8i02.9730.
- Gartner. (n.d.). Definition of Attrition - Gartner Human Resources Glossary. [online] Available at: https://www.gartner.com/en/human-resources/glossary/attrition#:~:text=Attrition%20is%20the%20departure%20of.
