HR needs to transform to meet future industry needs
The financial services industry is being fundamentally transformed by a series of mega-trends which are currently re-shaping the global economy. These include the introduction of new technology, demographic shifts and increasing competition from non-traditional sectors. In the face of this disruption, the future role of HR is coming under examination. According to a new study by the Asian Institute of Finance (AIF) and PwC Consulting Services (PwC) into HR’s readiness for this new reality, HR needs to transform itself from its traditional operational role into being a strategic partner and a critical enabler for business.
Entitled “Redefining the Role of HR across the Financial Services Industry: A National Imperative”, the report presents the results of a survey conducted in participation with a total of 550 respondents from HR and other business lines within 15 financial institutions. The study highlights that as the financial landscape evolves rapidly, HR needs to adapt accordingly and focus on the business contributions it can make to organisations. It is vital that HR takes a broad view of what it means to transform and becomes a partner to the business at a strategic level.
The findings suggest that HR function is not yet a strategic partner to business due to its overwhelming focus on operational activities. A significant majority of HR personnel (79%) claimed that the current HR role involves both operational and strategic business tasks but only 17% of non-HR senior management agreed. Constraints such as insufficient investment, limited resources and lukewarm support from top management are holding HR back at the strategic level.
Dato’ Hamidah Naziadin, Group Chief People Officer, CIMB Group, commented: “With the rapid pace of change taking place, both within our industry and globally, it is critical that HR functions of FIs give deep and serious thought as to how we can assist our organisations to deal with those changes. We need to get ourselves very ready, very fast – before it’s too late.”
Dr Raymond Madden, Chief Executive Officer of AIF, said, “Despite a gap between the expectations of the business leaders versus what HR is currently delivering, our study found a positive attitude towards the HR transformation agenda. Such transformation requires a mandate and strong support from top management.”
The report findings highlight that what today’s businesses and new generation of HR really need are HR capabilities and measurable competencies that do not just support the business strategy, but also enable the business to design and execute strategic priorities that capitalise on HR’s capabilities, rather than being limited by them. It is a powerful combination to drive alignment with the business, improve organisational and HR performance and establish a culture focused on adding business value.
AIF is currently developing an HR capability framework that will form a reference point for the design of an HR accreditation programme for HR professionals in the financial services industry. This framework will align HR competencies and capabilities with the career paths of HR professionals. It differentiates between core competencies and specialised competencies relating to different levels and positions within HR.
For more information about AIF, visit www.aif.org.my.