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Gaynor Wilkinson

Armstrong Craven

Practice lead for financial services and private equity

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What can HR learn from the banking sector?

davidfranklin

No-one can be in any doubt that the banking sector is no longer a destination employer. Quite the opposite. With scandal after scandal hitting the industry, consumers and employees have lost faith and the banks have been trying to rebuild reputations ever since. 

Attention is firmly focused on the leaders tasked with repairing the damage and bringing about a change in fortunes. Barclays is a case in point.

With the imminent appointment of new CEO Jes Stayley, all eyes are now on this high street banking group which has already seen major changes at senior level; from the dispatch of ‘Diamond Bob’ in favour of ‘Saint Antony’ Jenkins and subsequent appearance of ‘Mac the Knife’ John McFarlane just a couple of months ago.

This volatile environment has naturally had a major impact on HR – and particularly the talent acquisition function. The challenges of the last five years have necessitated a different way of thinking, brave decision making and rapid learning.  Heads of talent have become much more savvy as they strive to encourage business leaders to change a heavily ingrained mindset.

The bottom line is that banks have had to work even harder to attract already scarce talent and become much more humble in the process.

As a result, the model for senior leadership has been forced to change. Generalist skills are more in demand, as well as those that can lead effective change over the long term. Barclays for example, has chosen the path of positive disruption. Proactively making bold appointments which send a clear message of intent to the wider world.

Consider the choice of Bob Diamond; known for his ability to make money, then Antony Jenkins to show a change in culture and greater customer centricity, before turning to John McFarlane to cut costs. But banks also need leaders who have the ability to drive transformation throughout the organisation at every level and can comfortably ride out the tough times.

So despite the bad press and turbulent past few years, there may be something we can learn from the banking sector. Positive changes have taken place in terms of talent practice which the wider HR community may choose to take on board:

  • Succession planning: Future need, not replacement, has become more important. Talent Acquisition (TA) has recognised that the people who visibly drive change may not necessarily be right to then manage the next ‘business as usual’ phase – at that point in the organisation’s development, a different skill set and behaviour may well be needed.
  • In-depth due diligence:  Covering not only experience but also behaviours, this practice is key to avoiding future headlines. If you need an extreme example to prove the point – think former Co-op bank chairman Paul Flowers! The FSA’s scrutiny of key appointments means procedures for recruitment, onboarding, development and performance management now need to be more robust in order to mitigate risk.
  • Cultural change: Driven by TA’s conscious move away from standard remits and traditional ‘like for like’ hires, recruitment is becoming much more aligned with future business strategy and finding difference rather than clones. The focus is not only about what is right for the business now, but also what will be a good fit in 18 months and two years’ time.
  • Informed decisions: TA has become instrumental in understanding skills gaps and re-scoping roles. Customer centricity and digital skills, for example, are behaviours that may not be currently present; making it difficult to benchmark internally. External market research to identify differences is now essential.
  • Better management of line managers: Getting line managers to buy into the search for ‘difference’, overcoming legacy issues involved in recruitment and subjective informal interviews have proven key to embedding fundamental change.
  • Reputation management: There used to be a certain arrogance about banks who relied heavily on the brand to speak to talent. Now they have to articulate themselves through the cultural transformation that is taking place and tailor that message in order to win people back; presenting an exciting opportunity that they want to be part of. A lot more forethought is now put into talent attraction.
  • Balancing risk: The industry is heavily regulated but banking does not need people so risk averse that they look for a reason to do something, rather than a reason not to. It means banks have to attract and on-board people of the right profile, and welcome them into a culture where there is ‘fit’. TA has a role in ensuring the organisation is ready to receive a new type of banking employee.
  • Juggling skills: TA is tasked with finding the right people who recognise that they are joining a big complex organisation which is process driven and heavily regulated – but is also one that needs to change. Banking needs people who understand how to manage the pace of change, resistance to change and how to get the business to embrace it.
  • Both sides of the talent pipeline: TA is increasingly working with teams to understand internal talent and ensure that culturally there is the opportunity to move through the organisation and ‘grow your own’. One client said to us that more than 50% internal promotions are incestuous and so you need the external talent. TA has to understand how to balance internal and external talent pipelines.
  • Greater customer focus: With more focus on consumers than innovation on products, talent attraction has had to be agile. An understanding and appreciation of digital is a real hot spot, as is genuine customer centricity and a wider operational background than previously considered. 
Author Profile Picture
Gaynor Wilkinson

Practice lead for financial services and private equity

Read more from Gaynor Wilkinson
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