Total Rewards Quarterly

Another Melee in the Making?

Banking talent, which is limited in our country, was again back in demand after the financial crisis especially for the control functions. The large established players started ring-fencing their key/critical talent by paying them fatter bonuses and higher annual hikes. Other sectors like telecom, pharma and IT also followed suit. The payment banks which are largely dependent on the technology platform have made some key hires from IT firms, banks and e-Commerce companies to shore up their shop. Cash management and compliance folks from banks have also been hired to fill the need of designing the product suite. The scenario is slightly different for the small lending banks – they are largely focusing on hires in the retail, micro SME segments across both business and control roles. Their preferred talent catchment area is likely to be other banks or large established NBFCs to meet their talent requirements. Most of the new age banks are exploiting the entrepreneur in some employees while 16 others are being lured with the concept of wealth creation by means of ownership of the firm.

While this is likely to create some disruption in the banking, IT, telecom and e-Commerce space, but this may not dent much of the established talent management programs that each of the large and successful banks and NBFCs run. This is just the start-up phase and the true test is yet to come as these new banks could potentially pose a talent challenge to not just the banking system but also the larger ecosystem. Today, most of the established banks, NBFCs and conglomerates face severe challenges in hiring “ready” talent in the rural and semi-urban areas. With these new entities running in full steam, it is likely to stress the talent market even further and even see influx from other allied retail and distribution industries. This brings in the necessity of having a defined succession planning program for all key and critical position. Capability building is another focus area for banks given the talent catchment is varied across multiple industries and geographies. To be able to run an efficient and homogenous organization, targeted development programs could come in handy for the new banks and they may choose to follow the “academy approach” like their “big brothers”. Another challenge staring at these new banks which they are likely to face in years to come is differentiation. The ability to differentiate performance and thus align rewards is critical to promoting an overall performancebased culture. Large banks have often being accused of being socialistic in their approach while managing pay and this has come back to haunt them in the long run. It’s extremely important that these new banks adopt a stateof- the-art performance management system and follow it rigorously so that they don’t fall prey to similar issues in the years to come as they plan to expand.

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