International Labor Market in the Banking and Finance Industry

This assessment examines the labor market in the global banking and finance industry, including challenges faced and potential solutions. It also includes a case study of Commonwealth Bank of Australia.

INTERNATIONAL BUSINESS PAGE8
INTERNATIONAL BUSINESS
Name of student:
Registration number:
Unit Title:
Unit Code:
Name of supervisor:
Date due:

INTERNATIONAL BUSINESS PAGE8
INTERNATIONAL BUSINESS
The global labor market is very dynamic, and it is critical to keep up with the new
trends in the global market. The labor market has drastically changed notably over the
past decade. One of the significant factors which have contributed to the change in the
global industry is technology. Globalization and free movement of people have also
had a great impact on the international labor market. This assessment aims at
examining the labor market to get information and data on the global banking and
finance industry. The analysis helps in identifying challenges faced and hence aids in
identifying the possible solutions to the challenges. The second section of the
assignment researches Common Wealth Bank of Australia to identify the factors
which impact on the company and the banking sector in general for the past five years
and the future outlook of the company for the next five years. The final section of the
assignment contains an investigative interview with the manager of the bank which
gathers information about the labor market, the changes, and expected future trends.
TASK 1
The Australian labor market has undergone significant changes both in terms of
structure and technical changes. The changes have been more rapid especially for the
past two decades. The changes have been due to changes in government policies
relating to the labor force as well as changes like work. The demands of employers
have also changed significantly over the past five years. According to data from the
Australian Government department of jobs and small business, the Financial and
Insurance Services industry employs approximately 446,000 people (Verick, 2018).
This accounts for about 3.5% of the total workforce in Australia. For the past five
years, employment in the finance and Insurance Services Industry has increased by
8,9%. This is a significant increase compared to other industries which mostly

INTERNATIONAL BUSINESS PAGE8
recorded an increase of less than five percent. The data also indicates that the sector
has more female employees at 50.3% of the total workforce while male employees
account for 49.7% of the workforce (Petras and Veltmeyer, 2019). The average full-
time hours for employees in this sector per week is 39 hours. Statistics also indicate
that there are approximately 50,000 graduates who have specialized their careers on
finance and insurance and they are yet to get a job (Moutsatsos, 2018).
There are several challenges that the labor market in the finance and insurance
industry faces. One of the major challenges faced by this sector is the advancement in
technology. Technology advancement in the banking sector has been so rapid over the
last five years. Use of mobile banking, as well as online banking, has made it easier
for customers without having to visit a banking hall. The rise of robot advisors has
also rendered many people jobless.
There are also changes in economic structure and which could impact the labor
market in Australia. Over the past five years, financial markets have been relatively
stable. But in many cases changes in exchange rates could significantly impact labor
markets for financial and insurance sector (Bohn, Brakman and Dietzenbacher,
2019). This mainly applies to non-permanent employees who work in this sector. The
changes in micro and macroeconomic factors affect the labor market in the financial
services sector. Low interest rates result in banks and other financial institutions
trying to cut their workforce to reduce expenses. This may result in some people
losing their jobs.
Globalization is another huge challenge facing the labor market. Globalization
has resulted in the free movement of goods and services across borders and
continents. Globalization has resulted in increased competition for employment
opportunities globally. It has resulted in easing in the movement of people, and hence

INTERNATIONAL BUSINESS PAGE8
people can migrate and work in other countries and hence leading from increasing
competition for jobs.
To overcome the challenge of technology, it is critical that the government sets
policies which will protect employees from losing jobs due to advancement in
technology. The organizations should find a way in which people can work with the
help of technology without impacting on employment.
The challenge of changes in macro-economic factors of the economy can be
solved by strengthening institutions that set the monetary and fiscal policies of the
country to make the economy more flexible (Kluve, Puerto, Robalino, Romero,
Rother, Stöterau, Weidenkaff and Witte, 2019).
TASK 2
The Commonwealth Bank of Australia is an Australian multinational bank which
has branches across New Zealand, Asia, US, and the UK. The bank offers a variety of
services which includes; retail banking, funds management, superannuation as well as
an insurance investment. The bank employs approximately 52,000 people
globally(Komlos, 2019).
The Commonwealth Bank of Australia has been facing several challenges for the last
five years. Some of the challenges are unique to the CBA while others are facing
other organizations in the financial and insurance sectors globally. The following are
some of the challenges that the organization has suffered for the past five years.
CBA has been experiencing various legal challenges. These challenges relate to
issues of money laundering and failure to adhere to the policies and regulations set by
the regulatory authority. There have been many complete for the past seven where the
bank has been accused of aiding money laundering (Willcocks and Reynolds, 2015).
In August 2017, the Australian Transaction Reports and Analysis Cente (AUSTRAC)

INTERNATIONAL BUSINESS PAGE8
launched civil proceedings against the bank on allegations of money laundering and
terrorism financing (Kosny, Santos and Reid, 2017). The allegations were that the
bank broke the laws 53,000 times. The bank also faced allegations of manipulating
bank bill swap rate. These allegations have significantly damaged the reputation of
the bank globally. The bank has to work to improve the organizational culture of the
bank and improve the brand image by tacking these challenges.
CBA has also been facing challenges of organizational culture in the different
countries in which it operates. Various countries have varying cultures and traditions.
For an organization working globally, it is difficult to align the organizational culture
to the culture of the country in which the bank is operating (Cooper, 2015). A clash of
cultures may occur and therefore disrupting the organization from achieving its
objectives. For example, the banking culture in Asia is very different from that of
Australia. It is therefore difficult to align the cultures of employees working for the
organization but in different countries.
The bank has also had a challenge with unethical employees. In the year 2016,
CBA employees were reported to be involved in a $76 million Ponzi scheme. The
scheme was orchestrated by a professional poker player named Bill Jordanou and Mr.
Robert Zaia who was an accountant working for CBA (Karabarbounis and Neiman,
2013). Several other employees of CBA were also named in the scandal. There was
also CBA staffs who were involved in an Insurance scandal involving a client denied
compensation based on the outdated medical definition in their insurance policy.
The bank has also faced the challenges of technological disruption. The frequent
invention of new technology has forced the bank to re-organize its operations
frequently to adapt to the changing technological trends.

INTERNATIONAL BUSINESS PAGE8
In the next five years, smaller Fintech companies will take a considerable
proportion of the financial service market held by banks and other service providers in
the industry. This is because; the companies have been able to develop solutions that
use future insights and digital technology to improve customer experience .Banks will
have to re-invent back office processes and leverage intelligent automation. All this
will be in the quest to minimize costs and increase profit margins. This may result in a
massive layoff of employees.
Banks and other institutions in this industry will be able to explore direct payment
options. Instant payment infrastructure will be developed over the next years, and this
will significantly help to speed up transactions and hence serve customers at the
desired rate (Harris, 2019). Block chain will transform the banking industry in the
future. Most banks will adopt block chain technology which will help improve
efficiency security as well as improve efficiency. Banks will, therefore, prefer to
employ innovative employees mostly with a background in the IT sector.
TASK 3
Mr. Michael is the human resource manager at CBA bank. He has worked at the
organization for seven years and had prior experience in a similar role in other banks
across the country. The following is the interview that I conducted on Mr. Michael;
1. What is your being the human resource manager of such a large organization?
My experience as the HR of Commonwealth Bank Australia has been very
positive. This is because, since the beginning of my tenure, we have been able to
achieve numerous milestones. One of the milestones that we have achieved is that it
has improved the wages of employees by 12%, and it is one of the best employers in
Australia.
2. How do you handle recruitment and firing of employees?

INTERNATIONAL BUSINESS PAGE8
The company has a very elaborate policy regarding employee recruitment. The
bank encourages an open recruitment process. All job vacancies are advertised in
dailies and also on the company’s websites. Candidates are employed on merit after
undergoing a series of interviews and tests to ensure that they will help the
organization towards achieving its objectives. The bank also has an internship
program which helps in training young graduates.
3. during your career in human resource, what major changes have you
witnessed in the labor market both locally and globally?
The labor market has seen a variety of changes in the recent past. Over the years,
the supply of skilled labor has increased. The past five years have also seen
government develop policies which have helped in protection of workers’ rights and
improving their working conditions. Additionally, technological innovation has
drastically changed the labor market both positively and negatively.
4. Explain how disruptive technology has impacted your organization for the
past five years?
The various innovations in banking technology have resulted in the company
becoming more efficient. This has led to the company cutting 1000 jobs to cut costs.
The bank has plans to further scale down its workforce by 6,000 employees within the
next five years.
5. Do you think globalization has impacted the labor market in the banking
industry in Australia?
Globalization has had a huge impact on the labor market. Globalization has made
it easier for the free movement of goods and services. This has helped to increase
business volumes between countries and hence creating more job opportunities.

INTERNATIONAL BUSINESS PAGE8
Additionally, globalization has contributed to the free movement of people, and this
has increased the supply of skilled labor.
6. What are the future trends in the international labor market?
Most organizations are adopting technology at every stage of their value chain to
increase efficiency and reduce costs. In the next few years, more disruptive
technology will come up, and this may lead to additional loss of jobs. The existing
barriers to the movement of labor will also be removed and hence creating a free labor
market.
Conclusion
The aim of this paper is to examine the international labor market and identify the
information and data about the market. The article also discusses the labor market in
the financial services and insurance industry. More than 400,000 employees are
working in the financial services industry in Australia. Workers in this industry work
for approximately 36 hours per week. The paper also discusses the challenges faced in
this industry and also discusses potential solutions to these challenges. The second
section discusses the factors that have impacted The Commonwealth Bank of
Australia in the labor market for the last five years. The paper also discusses the
potential factors likely to impact this industry in the next five years. The final section
of the paper is an interview with the Human resource manager of CBA bank.

INTERNATIONAL BUSINESS PAGE8
References
Bohn, T., Brakman, S. and Dietzenbacher, E., 2019. Who's afraid of Virginia WU?
The labor composition and labor gains of trade.
Cooper, R.N., 2015. Recent Books: Economic, Social, and Environmental: Energy,
Economic Growth, and Geopolitical Futures: Eight Long-Range Scenarios/No
Ordinary Disruption: The Four Global Forces Breaking All the Trends. Foreign
Affairs, 94(5), p.181.
Harris, J., 2019. Race, Class, and Labor: White Skin Privilege and Oppression.
Perspectives on Global Development and Technology, 18(1-2), pp.47-58.
Karabarbounis, L. and Neiman, B., 2013. The global decline of the labor share. The
Quarterly Journal of Economics, 129(1), pp.61-103.
Kosny, A., Santos, I. and Reid, A., 2017. Employment in a “land of opportunity?”
Immigrants’ experiences of racism and discrimination in the Australian workplace.
Journal of International Migration and Integration, 18(2), pp.483-497.
Kluve, J., Puerto, S., Robalino, D., Romero, J.M., Rother, F., Stöterau, J., Weidenkaff,
F. and Witte, M., 2019. Do youth employment programs improve labor market
outcomes? A quantitative review. World Development, 114, pp.237-253.
Komlos, J., 2019. Despair at Full Employment: The Urgency of a Fairer Labor
Market. Challenge, pp.1-24.
Moutsatsos, C., 2018. Financial globalization and its effects on labor. In Unhealthy
work (pp. 21-36). Routledge.
Petras, J. and Veltmeyer, H., 2019. For Whom the Bell Tolls? Capital, Labor and the
Global Financial Crisis. International Critical Thought, pp.1-18.
Willcocks, L. and Reynolds, P., 2015. The Commonwealth Bank of Australia–
strategizing from outsourcing to the cloud part 1: perennial challenges amidst

INTERNATIONAL BUSINESS PAGE8
turbulent technology. Journal of Information Technology Teaching Cases, 4(2),
pp.86-98.
Verick, S., 2018. Female labor force participation and development. IZA World of
Labor. Available at: https://wol.iza.org/articles/female-labor-force-participation-and-
development/long [Accessed April 22, 2019].