Human Resources In Banking
September 25, 2015
As a typical service industry, an outstanding feature of banking industry is that human resources determine the quality of products and services.
As a typical service industry, an outstanding feature of banking industry is that human resources determine the quality of products and services. It is observed nowadays that not only the services and products of the banks themselves appeal to the customers, but the skills and professionalism proven by bank employees also count. Generally speaking, the higher quality human capital a bank possesses, the more competitive it can be in the market.
Given the current context that the global economy is still struggling to gain momentum, it seems that foreign banks are slimming down their Vietnamese operation. In a stark contrast, the ongoing bank restructuring process with focus on bank consolidation and mergers helps the banking system of Vietnam grow in a safe and sustainable way. As a result, a number of local banks are stepping up efforts to recruit more staffs to expand their operations. Yet, either local banks or foreign banks must accept the fact that the golden time may have passed and banking is no longer a top carrier choice in Vietnam’s market.
As observed by Talentnet, the year of 2015 has witnessed a remarkable effort of banks to speed up recruitment, of which big names such as VietinBank and Vietcombank are among the most active. VietinBank confirmed that it will recruit 1,100 staff for the entire 2015 while Vietcombank plans to add around 750 new staffs. However, job seekers have also realized that the prospects of working in banking sector is not so bright at the moment. Although employees in banking sector are among the highest earners in Vietnam, their jobs often come with much more stresses and risks than other sectors.
Unlike before, when the banking profession is the target of many young people, nowadays vacancies for fresh graduates are no longer appealing. Meanwhile, among a number of positions that require from 3-6 years of experience, only some certain positions are attractive to candidates. Despite the increasing demand for recruitment in 2015, the supply of human capital continues to outpace demand as a result of massive education and training of banking and finance in Vietnam in recent years. Therefore, banks currently hire qualified candidates with proven competencies only. This contrasts to 2007 when the supply of talents couldn’t meet the high demand from banks. At that time, under the expansion pressure, banks had no choice but to accept even less-qualified candidates.
As opposed to local banks, foreign banks operating in Vietnam tend to maintain a stable workforce and minimize additional recruitment at the moment. In our experience working with clients, Talentnet recognizes that foreign banks do not find replacements for vacant posts due to staff rotation. The only position that remains appealing in foreign banks is related to risk and compliance management, which is utmost important considering the nature of banking sector in general and the distinctive characteristics of Vietnam’s banking market in particular.
Apart from the unfavorable economic climate, it is likely that foreign banks have not considered Vietnam as key market due to their investments, in some specific cases, have not yielded expected results. There is also a key fact that Vietnamese personnel rarely hold senior management roles in foreign banks. It is due to the logical thinking and analytical skills of Vietnamese employees remain limited. In addition, Vietnamese personnel more or less have not been highly valued for their credibility as well as the level of compliance.
With the positive changes in Vietnam’s banking sector, it is likely that local banks will recruit more to make up for the drop in number of employees in previous years. Talentnet believes that in the near future banks will focus on recruiting low and mid-level personnel to facilitate their plans for branch expansion. Besides, the position that local banks are now seriously seeking is related to risk management role, which is very important when it comes to improve governance capabilities and control systematic risks.
Compared to other jobs in financial field includes securities and investment funds, there is a definite trend that banking is losing its appeal to job seekers. However, people working in banking sector often develop their own orientation and long-term development goals. As a result, at lower to mid-level, banking employees appear to be less prepared to change jobs.
The high degree of volatility is only evident in the segment of high-level personnel. While foreign banks have no demand for senior executives, many local banks have found it not easy to recruit them. Grappling with talent shortages, local banks are scrambling to snatch the best and brightest from the workforce. Sometime, in their hunt for great hires, they are forced to poach key people from foreign banks. Considering the ongoing mergers and acquisitions wave in the banking sector, the volatility of banking high-level personnel will continue in the future. But it should become less once the bank restructuring process comes to a close.