1. Introduction
The banking industry is one of the most important and crucial industries in any economy as they perform many vital financial functions associated with the development of the nation’s economy (Scott, 2007). The utility provided by banks to the customers determines the popularity of the bank in the market and likewise also has an impact on the competitive position of the bank in a particular market.
As banks are a part of the service industry, the competency of a given banks is largely dependent on the human resources employed in the organisation. This document analyses the aspect of employee retention in one such banking organisation – Maybank in Singapore.
2. Literature Review
Research on a given aspect of an organisation is considered to be incomplete without an analysis of the available sources of important literary evidence (Bryman and Bell, 2011). The same also provides a base for secondary research, the outcomes of which together helps in the establishment of findings along with outcomes (Denscombe, 2010). At the same time, it also needs to be highlighted that many of a times, identification and analysis of literary evidences leads to the establishment of direction, which is considered to be crucial for this particular study into employee retention at Maybank Singapore.
Subsequently, the focus is given to highlighting the importance of human resources in the service industry and banking sector. There will be a presentation of information about the relationship between employee retention and sustenance of competitive advantage and why it is necessary to retain employees. Identification of these aspects is followed by a comparison of employee retention strategies existent at Maybank Singapore to understand its relevance and also areas of improvement and challenges.
2.1 Service Industry and Banks
The service industry comprises of business sectors, the main source of revenue generation for which is the service provided to the customers or clients of the organisation. Generally service industry is composed of business sectors such as hospitality, airlines, travel and tourism, banking and others (Ming, 2008). In the case of the service industry, more importance is given to the intangibility component, for which human resources are highly important (Dess et al. 2008). According to Taylor et al. (2006) it is the services provided by employees and a personalised touch provided to the clients, which differentiates the service industry from others such as manufacturing or energy production. The difference that is highlighted is that in case of service industry, the services provided by the employees of an organisation contribute to a significant portion of the commodity bundle. In the case of banks, this is particularly relevant.
Gaining the trust and confidence of the customers in the industry is highly important for a banking organisation to succeed, where employees of the organisation play a major role (Small, 2006). The satisfaction levels related to honest and reliable services related to handling wealth of customers determines the business performance of banking organisations in the market (Early and Davernport, 2010).
2.1.1 Industry overview – Singapore and Banking organisations
Singapore has been observed to emerge as one of the leading developing nations of the world characterised by a high volume of economic activity in the country. The banking industry is Singapore is quite competitive and is characterised by the presence of nearly 47 different indigenous and foreign banks targeting customers in the market (Hao, 2009). In comparison to the same, the organisation operates 22 branches and about 35 ATMs in the Singaporean market (Maybank, 2014).
The banking sector comprises of different services as well such as deposits, loans, mutual funds, stock accounts and others which have led to the development of a diverse and dynamic banking industry in the country. Thus, as suggested by Robbins (2005), the organisation needs to be well equipped with resources in order to survive in the service industry where the abilities and skills of the employees of the organisation play an important part in the organisation’s performance.
2.2 Employees – source of competitive advantage in service industry
Taking into consideration the service industry, employees of a particular organisation are considered to be the most important source of competitive advantage. The reason behind this is the fact that they possess the required skills and experience to provide appropriate services to the customers of the organisation, efficiently identifying their needs and requirements while providing the same (Borstorff and Marker, 2007).
According to the views of Early and Davernport, (2010), in a service environment, it is highly important for the employees in direct contact with the customer to possess the necessary skills and qualities essential to be able to satisfy requirements of the customer. Anticipation and identification of the needs and requirements is an important factor. It is enhanced through learning and experience in a professional environment (Early and Davernport, 2010). At the same time, the views of Deery et al. (2006) suggest that in case of many organisations, there is a lot of efforts and resources dedicated to the enhancement of the quality of the human resources of the organisation. It involves an expenditure in terms of money and time resources, and the same is considered to be relevant when the organisational competitiveness improves in turn. According to Hao (2009), this expansion in the financial sector of the country is also characterised by increasing demand of qualified and skilled human resources, which is a major source of competitive advantage to banking organisations in the market.
2.2.1 Technological advancement and Intangibility – a comparison
There have been many arguments and suggestions related to the superiority of technology over human labour in many business organisations whereby the same leads to enhancement of competitiveness as well as a reduction in operational costs (Small, 2006). Although it might be true in many cases, the same cannot be stated to be true in the case of the service industry.
The important fact has to be taken into consideration in the study of employee retention in Maybank Singapore is the fact service in itself is intangible and is inseparable from the provider (Taylor et al. 2006). At the same time, it cannot be substituted by technology as the most important aspect in such a case - human interaction, would be eliminated. Even in case where there is the incorporation of technology in the operations of the bank, turnover and recruitment of new employees will lead to increase in pressure to train and develop the new employees once again.
2.3 Need of Employee Retention in the Banking Industry
In the case of the banking industry, the need to retain the employees to the organisation is of paramount importance, and several factors are identified related to the same.
Taylor et al. (2006) suggest that in case of banking, the experienced and skilled employees of the organisation enhance their ability to handle different kinds of customers to the bank and answer their queries in an effective manner. The need to retain these employees is highly necessary as the same enables a banking organisation like Maybank to develop a competitive edge in the market. The second important factor that is highlighted by Harley and Hardy (2004) and Beer and Cannon (2004) is that retaining employees in an organisation also leads to the retention of the customers of the bank. Employees of banks who are in direct contact with the customers play an important role in the retention of the customers to the bank as well, as customers regard them to be bank’s representatives thereby developing a greater sense of confidence among them.
It is also highlighted by Ming (2008) that banks need to retain their employees to reduce expenses incurred in the recruitment, training and development of new employees to the organisation. In addition, taking into consideration particularly the market conditions of Singapore, it is highlighted that there is considerable growth in the banking sector, characterised by lesser availability of effective and efficient human resources.
2.4 Important aspects of Employee Retention
There are a few important aspects that have been identified to play a major role in retention of employees in Maybank Singapore.
The first important factor is that of remuneration and compensation structure. The leadership of the organisation needs to ensure that the compensation and salary that is offered to the employees of the bank is at par with the industry standards (Early and Davernport, 2010). It also needs to be ensured that the salary paid to the employees of the banks are well evaluated to the job title and amount of responsibilities entrusted on the employee.
Motivation is another important aspect, and the leadership of the organisation needs to ensure that the employees are motivated to continue their employment in the organisation in the long run. Hence it is important to implement the necessary tools of rewards and recognition in the organisation. Motivation is regarded to be an important factor because of its direct association with retention and performance of employees in organisations.
Training and development are also highly essential as the same enhances the skills and capabilities of the employees of the organisation. At the same time, it is also regarded to influence an employee’s decision about professional development and continuance of his employment with the organisation (Taylor et al. 2006).
2.5 Analysis of existing employee retention strategies at the bank
Ming (2008) has highlighted that the primary areas which influence retention of employees in an organisation are workplace environment, remuneration, growth opportunities and rewards and recognition, especially in the banking industry.
Analysis of the existing employee retention strategies at the bank revealed the following important aspects.
(1) The leadership of the bank focuses on the promotion of positive and healthy work environment for the employees of the organisation through implementation of equal opportunity program which creates a justified and unbiased working environment for the employees (Maybank, 2014). Prevention of discrimination is an important agenda in human resources management policies of the organisation.
(2) Remuneration, rewards and growth opportunities are provided by the leadership to the employees of the organisation through various performance monitoring and evaluation techniques in the organisation (Huselid, 2005). An important feature of the bank is the promotion of formal appraisal systems, which not only helps the management to provide a clear picture on employee performance, but at the same time enhances motivation among the employees as well (Maybank, 2014).
(3) Learning and communication is another important agenda for the leadership of the organisation in the Singaporean market (Grote, 2005).
2.6 Areas of improvement for Maybank Singapore and perceived benefits
Barnett and Hall (2011) state that with the advances in the industry and commercial world, empowerment of women employees in business organisations have been found to yield positive results in both performance and motivational levels. Maybank needs to analyse the implications of this particular factor on the business operations of the organisation and consider the introduction of such programs. At the same time, even though the leadership of the bank believes in the development of employees of the organisation, there is the absence of any formidable banking professional development programs offered by the organisation. Professional programs specialising in different aspects of banking services are a common feature in many renowned banks, and the same helps in the creation of a positive brand image of the organisation in the labour pool (Early and Davernport, 2010).
Even though formal appraisals are used by the organisation to evaluate the performance of the employees of the organisation, there needs to be an enhancement of rewards and recognition programs offered in the organisation. The reason behind this is that the same enhances the motivation of all employees in the organisation, who are either intrinsically or extrinsically motivated to perform better (Small, 2006).
2.7 Challenges of retaining employees in Maybank Singapore
The dynamic and challenging nature of the human resources industry creates a challenge for any business organisation in retaining their employees in the organisation in the long run. A few of the same have been identified and presented herewith.
The large numbers of competing international and local banks (Hao, 2009) create a challenge for the bank in the Singaporean market. It is because of the presence of about 47 competing organisations; the employees have a wide range of alternatives to work for other banks. Retention is, in fact, a costly affair for all banking organisations in the country owing to lesser availability of skilled workers in the industry.
3. Conclusion
Analysis of the various literary sources of evidence has highlighted important and crucial factors to the research. The fact that there are a number of competing organisations and fewer trained human resources available in the country increases alternative employment options for the employees, which creates a challenge for retaining efficient human resources to the organisation.
At the same time, the outcome has also been derived that the areas of diversity inclusion in terms of gender and rewards and recognition need to be evaluated to understand the utility of existing policies in the organisation. These factors will help in shaping of the research questionnaire and design for primary data analysis.
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