The case for evidence-based HR in banking
Ask any banking executive and they will likely tell you that it’s their people that are their greatest asset. And most banks now recognize that data and analytics can lead to improved business decision-making. Yet too few banks seem to have connected the two; applying evidence-based approaches to the HR function in order to drive improved organizational performance. More often, most HR decisions made in the banking sector today are still made based purely on experience and accepted “truths” (e.g. higher pay = better performance)
Clearly, this is far from ideal; in part, because today’s banks are highly focused on issues related to talent. Time and again, our surveys and our discussions with leading banks show that recruiting and retaining key talent is one of the big concerns keeping banking executives up at night. Banking executives are also keenly focused on improving the productivity of their employees. The case for better use of data and evidence to influence these objectives seems fairly obvious.
Yet, as this report illustrates, few banks have taken the appropriate steps to create a truly evidence-based HR approach. The data suggests that, while the intention is there, few have deployed the same rigorous analytics that they use on their products to optimize their people offering. And given that the race for talent is a truly cross-industry and global competition, banks may soon find themselves falling behind more sophisticated competitors from other sectors.
That is why, for this report, we have highlighted a number of comparisons between the survey responses collected from banks and those collected from IT and Technology companies. Not only do tech companies (generally speaking) represent the ‘fast-movers’ and ‘early-adopters’ of the business world (and therefore also act as competitors for more mobile talent and skills), but they are also increasingly becoming a disruptor within the traditional banking sector itself.
Indeed, all around the world and across the value chain, FinTechs and startups are quickly disrupting the traditional banking ecosystem. Those banks that are able to change corporate culture to embrace data-driven HR practices in banking can facilitate an improved ability to compete with, partner with or successfully acquire and integrate Fintech innovators that they both value and respect. The positive influence on corporate strategy and business transformation is significant. Of course, this will require more effective talent management and more deliberate evidence-based decision-making to drive talent acquisition and retention strategies.
At KPMG International, we firmly believe that all companies will be using evidencebased HR approaches in the future. But the road to full ‘maturity’ will take some time to navigate and will require investment, leadership and a culture of innovation.
We hope that this report provides HR leaders, executives and talent managers across the banking ecosystem with some new insights, valuable data and practical advice to help accelerate the journey towards evidence-based HR. To discuss any of the topics identified in this paper – or to talk about your unique HR challenges – we encourage you to contact your local KPMG member firm.
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