Cornell University’s Center for Advanced Human Resource Studies is one of the world’s leading institutions dedicated to bridging the gap between industry and academia in the field of Human Resources (HR). It is no wonder then, that its head, Steve Miranda, is right on the pulse when it comes to the human capital and business needs of organisations - regardless of industry.

The lack of available talent to fill crucial positions in the banking and finance sector is not unique to just developing markets or confined to certain geographical pockets. According to several global publications such as Harvard Business Review, the talent gap is real. A worldwide survey carried out by ManpowerGroup showed that 35% out of 38,000 employers faced difficulty in filling jobs due to a lack of available talent, whilst in the US alone, 39% of employers found themselves in a similar situation.

Banking and Finance, according to Miranda, is no different from any other sector when it comes to the need to develop competent talent and create a seamless talent progression pipeline. And now more than ever, in the wake of rapid global technological changes, business cycles have shortened significantly, affecting talent and leadership succession in unprecedented ways. The mutable nature of technology means that adaptability has become one of the most valuable traits for employees to possess, as these new technologies require specific skillsets that are usually gained on the job. Evolving technologies have also made it harder for employers to analyse the talent gap objectively, as the bar is consistently being raised according to the latest developments in the technological sphere. 

Even though the process of managing talent and ensuring leadership succession within organisations is rarely straightforward, there are certain fundamental rules that extend across all industries when it comes to managing human capital. Most times, this begins with creating an environment which encourages learning and provides quality programmes for talent development, be it in a formal or informal manner.

Steve Miranda shares his insight on how talent development can become part of an organisation’s culture, to ensure the right leaders are chosen to pave the way for sustainable growth in the long term.

 

FAA: How much of a concern is talent succession in the bigger picture of HR and in determining the future growth and direction of companies?

SM: I have one word to describe this, and that concern is HUGE. It’s not just a concern of HR professionals, but it’s also a huge concern amongst CEOs. When you look at business surveys, the ability to fill current jobs with appropriate talent in the coming years ranks as one of the main concerns that global CEOs have.

Many companies and organisations say that the students are not prepared to step directly into the workforce. This could be because they lack certain skills such as interpersonal skills and technical skills which are needed to be a leader or key member of the company, and they are not ready to step into the work environment. To some extent, colleges have to do a better job at preparing students for the workforce.

In terms of succession planning, we’re obviously not going to place a new graduate into an executive position straightaway. However, the pace of technological change has been tremendous, and there is a need to develop enough managers in an organisation. Business cycle times – be it economic, changes in customer attitudes or product innovation, have been shortened to an average of two years. This means employees don’t have enough time to gain experience before moving up to a managerial position.

Because the world is changing so fast, there is a need to perpetually re-educate employees. Organisations have to realise that the treatment of human capital is different from physical capital, and people need to have the right tools for learning.

 

FAA: Is there a direct correlation between the design and delivery of quality corporate learning programmes, and how do we get learning programmes right?

SM: There are 10 ways to get learning programmes right, and 110 ways to do them wrong. People always look for the best in class when it comes to learning solutions. However, you have to keep in mind that the process may be different but the outcome remains the same.

There are multiple ways to create an effective learning programme, and one of them is by using the 70-20-10 rule, whereby

-                      70% of development is through on-the-job experience,

-                      20% is through interaction with other people, such as workplace mentoring,

-                      and 10% is through educational events, such as conferences and workshops.

Most learning organisations tend to focus on the 10% but great learning organisations focus on all three aspects. People learn most through on the job experience. There are several ways to ensure employees learn; these include moving people into different positions within the company, and training them to give feedback. Organisations that don’t do this well will not make as big an impact as those that do.

There are also situations within organisations where talent is hoarded. Some managers don’t want to give up or share their best employees, even if it means that the overall business would benefit if they did. Line managers need to view employees as an organisational resource instead of their own.

 

FAA: In Asia, one of the biggest hurdles for growth in the banking and finance sector is talent and leadership succession. How can financial institutions design learning programmes to identify the right talent and create a roadmap for their professional progression within the company?

SM: There are two things that talent organisations need to consider seriously when it comes to training and Learning and Development (L&D) programmes. The first is the objective of the training, and the second is the business issue. The current business circumstances against which training is carried out need to be better understood.

When designing a training programme for leadership succession, you also need to bear in mind its main purpose. This is important to ensure that the training is effective. Are you training leaders to be more agile, innovative, operationally focused or customer focused?

In terms of business issues, you need to identify the problems first. Is there a lack of innovation or customer focus? And what are the gaps or the quantification of what we want to do and where we are today? This will help you figure out what L&D programmes are needed to close the gaps.

 

FAA: How important is accreditation in the context of (professional) courses for the banking and finance industry, and what can developing markets such as Asia learn from more developed markets such as the US? Is the creation of a global quality assurance network feasible for the banking and finance industry?

SM: Accreditation is very important for banking and finance because it is a regulated industry. In regulated industries, there are penalties for not complying. In fact, accreditation is good for any industry because it gives you peace of mind in terms of the person’s technical qualifications and competencies. Accreditation tells you that this person knows these things. What it doesn’t tell you however, is whether they know how to apply this knowledge. For instance, in the medical profession, 50% of doctors will graduate at the top of their class, while the other 50% will be in the bottom half. However, this 50% in the bottom half may end up being better physicians as they may have the qualities or skills, such as interpersonal skills, empathy, etc. that go above and beyond their technical competencies. These are non-accredited skills.

Accreditation gives you some kind of confidence in the level of technical knowledge, but it does not guarantee great leadership.

Areas in banking and finance where accreditation is crucial include risk management, where the institutions have people who are accredited in quality assurance standards.

 

FAA: Job security is a big concern in the financial services industry as a whole, due to relentless job cuts and the like. Is this, to some extent, holding managers back from grooming and empowering their staff to lead?

SM: You can see this in certain job situations, where some managers feel threatened when others are doing better. However, this is the minority. Most managers know a simple truth – when I feel exhausted, burned out and tired, it means I’m not delegating enough. I’m much better off as a leader, if I hired effective and competent people. A manager’s role is to grow future leaders, and that takes time to develop and patience to mentor.

 

FAA: Technology companies have been recognised for their flexibility and progressive attitude towards talent management and development. What can the banking and finance industry learn from them in this regard?

SM: The Brits have a saying ‘Horses for courses’ which means different people are suited for different things and it depends on the kind of situation you’re in. The market is changing much faster and things change a lot quicker for tech companies than for other types of companies. Therefore, the skills needed to lead in technology may not necessarily apply to banking and finance where patience, perspective, longer memories and the experience of going through different cycles may be considered more valuable skills for a leader.                                   

What the banking and finance industry can learn from the tech industry is that the world is changing very rapidly, and the faster we react, the better. You also need to change your business proactively and reinvent yourself before your competition does. 

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