HRMT20024 Managing Human Resources Assignment Help
Write an essay on the key challenges in attracting and retaining a workforce in your selected sector.Your essay will draw on the academic literature (including the articles from ‘Reviewing the Literature’ you developed for Assessment 2), and develop an argument applying that literature to your selected sector.
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Key challenges in Attracting and Retaining a Workforce in the Australian Financial Sector
Introduction
This essay aims to investigate the challenges of sourcing and retaining talented employees in the Australian financial industry. In concurrent years, the Australian financial industry has been experiencing a slow growth rate due to increased employee turnover. Further, the increment of employee turnover has also fueled a surge in the cost associated with managing human capital. According to Nankervis, Baird, Coffey and Shields (2016), employee turnover may be profoundly associated with the employee benefits regardless of their monetary or non-monetary nature. The Australian financial sector is a principal driver of the national GDP and contributes significantly to the enhancement of the national financial structure. As per the Australian government's financial records, the financial sector contributed approximately $148 billion to the national GDP. Further, the financial industry is a paramount contributor to national employment. According to 2018 employment records, about 450,000 people are employed within this sector.
The Australian financial sector enjoys stable and continual growth. Nevertheless, over the past few years, the financial industry has been suffering from increasing employee turnover rates. Bearing that in mind, this essay sets out to identify the challenges and issues that have been preventing the financial service organizations to attract and retain skilled workers. The essay further draws on an extensive amount of empirical research to analyze HR roles and responsibilities that may be necessary to resolve these issues.
Key Challenges in Attracting and Retaining Staff in Australian Financial Sector
Employee attraction may be defined as a systematic process of getting potential talents to perceive an organization to be a favorable place to work at. Employee attraction consists of a few elements including having a positive affective perception towards a business entity, perceiving it as desirable and exerting efforts to get employed in the entity. Attraction refers to activities that are carried out by the human resource management (HRM) of organizations to solicit inquiries made by candidates (Janson, 2019). The available vacancies are advertised extensively to draw potential candidates from the talent pool that may meet the requisite criteria. In the modern business environment, effective employer brand strategies are used as another integral attraction tool.
Employee retention is a strategic organizational goal which aims to retain talented workers within the workforce. It allows companies to minimize employee turnover through fostering a work atmosphere that is perceived as positive by the workers. Some of the key applications of employee retention can be observed in regards to the provision of competitive pay, promoting engagement, appreciating employee efforts, the assurance of a healthy work-life balance and benefits (Stone & Deadrick, 2015). High employee retention does not only allow organizations to save human capital investment, but also enhance their competitive strength and positioning in a market.
In the past few years, the Australian financial sector has experienced an increased employee turnover rate. According to a research led by the Society for Human Resource Management, an organisation needs to invest $4000 on average to hire a replacement in case an employee quits the organisation. In this context, it must be mentioned that the aforementioned cost, as per the findings of the same research, is not inclusive of the investment needed to train the new hire or the price of severance (Hejase, Hejase, Mikdashi & Bazeih, 2016). Furthermore, it may be said that the loss of trained and experienced employees also reduces the competitive strength of a company significantly. In this context, some of the most common challenges and factors that affect both employee attraction and retention in the Australian financial sector have been identified, discussed and analyzed.
The financial industry operates under a complicated functional framework. A wide range of complex and high-requirement services are provided by the financial services organizations. These operations may include anything from accounts to, currently, the integration of IT frameworks. In this context, it may be said that with the increasing skill and competency requirements associated with the functions as well as the more demanding nature of operations, the gap between actual work requirements and employee skills is widening (Aguenza & Som, 2016). A majority of current financial service-based organizations are currently being driven by the ever-expanding capabilities of information technology (IT) as well as the emergence of new job responsibilities and roles in finance including software engineers, data scientists and artificial intelligence (AI) for instance. Nevertheless, it is extremely difficult for organizations to find potential candidates that are well-versed in finance and data science or AI.
The shortage of mid-career candidates and employees is evident in the Australian financial sector. The economic recession which took place in the fiscal year 2008, as well as the low economic performing years which followed the economic recession, led to many mid and upper-level professionals leaving the financial services sector. This implies that currently there are comparably lesser upper and mid-level professions that are employed within the financial services sector in current times. Nevertheless, due to the shortage of mid-career candidates, the available candidates enjoy high demand from a wide range of organisations in the financial services sector which often renders some companies unable in terms of attracting potential talents due to their poor economic infrastructure or insufficient brand reputation.
Work environment and culture are both integral as far as employee attraction and retention in the financial sector is concerned (Baral, 2014). In case an organization is known for poor workplace culture, a majority of potential candidates do not approach the company. To ensure both a healthy and effective work environment, it must be ensured by the organizations that not only the important accommodations are present, but proper safety and health policies are also in place and followed properly by the organization (Haider et al. 2015). Organizational uncertainty is one of the key contributors to high employee turnover. Employees desire an effective work culture that has functional components such as clear job roles, performance management and job design, collaboration, communication and efficient reward management systems (Nankervis, Baird, Coffey and Shields, 2016). If all of these elements are not maintained properly within an organization, it may severely impact the reputation of the company, as well as, the employee retention ability of the organizations.
Job stress is one of the most evident sources of job dissatisfaction among employees in financial services organizations. In the modern context, a higher rate of acquisitions and mergers as well as growing economic interdependence between organizations is evident due to the higher rates of technical developments being employed within the financial sector and globalization (Ibidunn et al. 2015). These phenomenon have rearranged the functionality of the financial services sector and have brought about immense changes in regards to the corporate structure of the institutions. The ever-changing work requirements and demanding nature of the operations over the last few decades have resulted in excessive work demand, role conflicts, time pressure, challenging customer relationships and deficiencies all of which are major sources of job stress.
The presence of a biased recruitment and selection system may lead to a negative brand reputation. The recruitment and selection procedure, if subjected to internal conflicts and biased influential factors such as political influences or emotional influences, can be perceived to be unethical by the candidates and may damage the workplace culture and environment in the long run. In addition to that, it has been seen that compared to men, fewer women are placed in leadership positions of the organisations. The perception of biased and discriminatory practices among the talent pool may give rise to uncertainty among potential candidates that intend to approach the organisations (Mihalcea, 2017). Additionally, a wide number of empirical studies have suggested that the demanding and complicated nature of the functions and operations within the financial industry hampers the work-life balance of employees which is a significant concern as it generates high job dissatisfaction rates among the employees.
Another challenge that the HR recruiters may face is ethical conflict internally. In case an organisation chooses to carry out the selection and recruitment process over social media platforms, it may lead to ethical bias as a wide range of personal information of the candidates may be accessed by the organisation. The availability of such data may lead to biased opinions about some candidates which may lead to an unsatisfactory interview and screening process for the candidates (Calvasina, Calvasina & Calvasina, 2014). It may also negatively damage the reputation of the organisations and thereby, may lead to fewer candidates approaching the firms. It is a commonly accepted fact among scholars that clarified job descriptions and responsibilities not only allow the employees in terms of carrying out their duties more responsibly and effectively but also increase their productivity in the workforce. Nevertheless, in case the employees do not have a clear idea of the expectations that the organisations have from them, they might not be able to perform up to the mark which may lead to job dissatisfaction.
Internal office politics may be another source of high employee turnover. Internal office politics may be evident across several areas such as promotions, provision of incentives or other non-monetary rewards and pay raises. In the absence of an effective and unbiased performance management system, the HR managers may not be able to identify the best performers and reward them accordingly based on their performance (Valentine, Hollingworth & Eidsness, 2014). An ineffective performance management system may also develop the perception of being unfairly treated by the organisations among the employees. In such scenarios, they may feel highly dissatisfied and may stop their efforts to accomplish the organisational objectives or quit the organisations.
It may be said that all of the above-mentioned factors pose significant challenges to attracting and retaining an effective and efficient workforce in the Australian financial services sector. In case these issues are not managed properly and adequately, it may lead to high job dissatisfaction among the employees along with decreased productivity. All of these identified elements need to be managed properly to ensure that the employees stay loyal to the organisations and that the organisations can represent their positivity to potential candidates.
A wide range of HRM functions may be applied in the financial service organisations to minimize the issues of employee turnover as well as to attract more potential candidates. Job design and job analysis are two vital components which allow the employees to enhance their performance levels and facilitates the fulfilment of the professional goals. The job roles and responsibilities must be clearly explained to the employees and need to be designed following the organisational objectives (Nankervis, Baird, Coffey and Shields, 2016). One of the most vital strategies for the HRM of the financial service organisations here is to enhance the job satisfaction of the employees. Human capital development may be of effective use in this context. The companies may invest in training and developing employees to enhance their skills, knowledge, abilities and competencies . In addition to that, the companies need to maintain diversity in the workforce to ensure higher productivity among the workforce. According to van Zyl, Mathafena & Ras (2017), workplace diversity leads to the generation of new and improved ideas which lead to more efficiency and effectiveness. Furthermore, HR managers may put more focus on the diverse attributes of the vacancy. Successfully addressing the diverse attributes of vacancy would allow the organisations in terms of offering opportunities for promotions and both monetary and non-monetary rewards to the employees. The implementation of a reward management program would make the employees feel valued and being rewarded for the efforts they put into the organisation and hence, would increase their job satisfaction.
Since the internet penetration rate in Australia is significantly higher, the companies in the financial services sector in Australia may use social media platforms as a key resource to advertise vacancies, screen candidates and recruit them. To ensure that the candidates that are employed, the HR managers may consider several factors including the interpersonal communication skills of the candidates, work experience, financial and technical knowledge among others.
As stated previously, the provision of learning and development programs for the employees would allow the workers in terms of increasing their skills, competencies, knowledge and expertise. This would foster both the personal as well as professional growth of the candidates. In the context of the Australian financial services sector, this strategy has been employed by a wide number of organisations through the provision of Vocational Education and Training to the employees. The implementation of Strategic Human Resource Management (SHRM) may carry pivotal importance in the context of the organisations in the Australian financial services sector. SHRM allows companies to emphasise on a diverse range of activities including employee relations management, conflict management, diversity management, work design, performance management and HR planning. SHRM also allows companies to enhance collaboration and interaction among the employees through effectively designing job roles and responsibilities which ultimately foster more engagement from the employees (Letchmiah & Thomas, 2017). It also allows the employees in terms of perceiving themselves as valued stakeholders to the organisations and thereby, would contribute to the enhancement of objective ownership. SHRM also allows organisations to maintain a certain level of transparency among the employees and the management which significantly improves organisational performance. Finally, it may be said that it is of pivotal importance for the organisations to maintain a good and healthy work culture to keep the workforce motivated at all times.
Conclusion
Several conclusions may be drawn from the availed information. Firstly, it may be said that in recent years, the Australian finance sector has experienced some significant issues pertinent to attracting and retaining a skilled and effective workforce. These issues may be associated with the ineffective HRM framework employed by the organisations within the sector. It is identified that lower attraction and retention rates affect the organisational performance of businesses from multiple aspects. The organisations not only have to invest more money in human resource capital to acquire new staff and train them but also may lose their competitive edge due to the lack of talented, skilled and experienced candidates. Some key issues that have been identified to be developing a challenging path for the Australian financial organisations in regards to attracting and retaining a workforce include widening skill gaps, shortage of mid-career candidates, inadequate compensation and benefit packages, poor work-life balance and stress, atrocious work environment and organisational culture and the lack of career growth opportunities among others. It may be said that the incorporation of the aforementioned strategies may allow the Australian financial services organisations to eliminate these issues and enhance their capabilities in terms of attracting potential talents and retaining an efficient workforce.
Some recommendations may be made to the Australian financial services organisations to minimize the challenges associated with attracting and retaining an effective workforce. It may be said that effective and authentic performance management measures may be incorporated by the companies. Efficient management of performance would allow organisations to communicate the expectations of the organisations. It would foster both personal and professional development of the workers which is integral to establish a successful brand reputation among potential candidates who may express their desire to work for the organisations. Performance management would also allow the HRM of the financial services organisations to allow the employees in terms of developing the necessary skills, competencies and expertise to optimise their potential.
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