Human Resource Management in the Banking Sector in Australia

Running Head: Royal 0
International Human Resource Management

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Introduction
The Banking sector is the largest part of the Australian financial system, which
involves 147 authorized deposit-taking institutions and holds around 55% of the assets of
Australian financial institutions. It is stated that several smaller banks with a presence
throughout the country as it is seen that since 2008, the government of Australia has
guaranteed deposits up to $250,000 per client per institutions against banking failure.
Australian has a strong regulatory framework and a profitable, competitive, and sophisticated
financial sector. Australian financial sector is the biggest contributor to the global economy
and the main driver of economic development and employs 450.000 people. In respect to the
financial, employment, as well as insurance services comprises approximately 3.4% of total
employment. In addition, social services, as well as health care, contributed 13.3% of total
employment, mining 1.8%, construction 9.4%, manufacturing 9.4%, and retail trade 10.4%
(Adapa & Roy, 2017).
Business and employment background
It is to be stated that according to the Australian Employment Report, the extent of job
advertisement for risk and compliance employers have extended by approximately 50% over
the recent year, which has shown constant growth. The Banking and Finance sector has
greatly increased in jobs by 2% resulting in generating employment opportunities as
compared to the previous months. It is quite evident that banks have seen an increase in an
advertisement in compliance workers, which indicates a lack of appropriate capabilities of
candidates. However, it is slightly difficult for the recruiter to recognize the right person for a
specific role in the Banking and Finance institutions. It is stated that from a wider
perspective, job advertisement on its platform fell down by 0.1% and grow by 5.5% (Bell &
Hindmoor, 2019).
Human resource management issues
There are several human resource management issue that influences the working life
of manager in the banking sector in 2019 are provided below-
 They are faces continuous challenge of new regulations, which has never been an
external intervention in the banking sector. It is quite evident that regulatory change is
heavily driven by constant change and political consideration. There is a threat among

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banks that regulatory restriction will move outside the European Union. They are
facing a challenge so that they can compete with global markets within the new
restrictions. The banking sector is responded by initiating new reward elements that
are not fixed like a salary but paid as an allowance, which can be adjusted based upon
the productivity of the business (de Burgh-Woodman, Bressan & Torrisi, 2017).
 The next issue, which the HR manager is facing as potential changes to the
Remuneration code, which is consulted by the Financial Control Authority (FCA) and
Prudential Regulation Authority (PRA).
 Another issue they are facing is the reform to pensions with access on the drawdown
of funds within specific schemes (Huang & Rundle-Thiele, 2015).
 It is stated that the HR manager is also facing the challenge of restoration of the
industry’s image and reputation. Several financial institutions have worked hard to re-
capitalize their corporate values needed by their employees. They also need to work
upon aligning corporate values to the performance management schemes and make
sure that recognition is allocated progressively.
 They are also facing diversity challenge as it is seen that now multiple generations are
working together by following the eradication of retirement age in Australia. This will
have a knock-on impact on employers to make sure that they support their employees
and develop the responsibilities (Lodhia, 2015).
Challenges in the banking industry in Australia
The banking industry is facing structural challenges, which serve to decrease ROI and
slower down home loan growth.
 It is quite evident that the banking industry in Australia continuously enhances its
growth capabilities and generating the profit margin. It is necessary to maintain the
net profit margin, which is a key indicator of banking profitability. It depicts an
immense pressure on market competitiveness as government intervention, regulatory
framework, and corporate services would have an influence on net interest margins.
 The main challenge is faced by the banking industry is disruption form innovation
such as mobile banking and real-time payments, which depicts both opportunities and
threats to the sector (Ma, Roberts & Kelly, 2016).

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 It is stated that increased scrutiny is also the challenge faced by the banking industry
in order to capture the downside risks from regulatory and legal oversight (Menicucci
& Paolucci, 2016).
Current issues in banking industries in Australia
The current issue in the banking industry in Australia has always been aligned to the
needs and preferences of the customer by customizing its products and tune its services. It is
quite evident that Australian banks need to utilize the power of social media by maintaining
their existing services and technology. This can enhance the customer experience by making
accessible tailored services and solutions to the customer. The current issues faced by the
banking industry are described below-
 Sharing of client details with the third party should not lead to a breach of customer
privacy (Yao, Percy & Hu, 2015).
 It is stated that the fraud risk shall be avoided by offering lockout feature and
continuous monitoring, and time-out feature during utilization of mobile-apps.
 Regulatory compliance is associated with potential risk, which needs to be avoided.
 They are also facing the issue in providing a framework of security as fingerprint
login for enhancing the number of clients using smartphones (Bloch & Bhattacharya,
2016).
Royal Commission into Misconduct in the Banking, Superannuation and Financial
Services Industry
The Royal Commission into Misconduct in the Banking, Superannuation, and
financial services industry is termed as Banking Royal Commission initiated on 14th
December 2017. It represents the culmination of the most significant public inquiries in
Australian History, which has progressively influenced corporate culture in the future. In the
commissioner’s view, much of the potential misconduct is been recognized by the
Commission which was already contrary to the law. The HR manager of the bank needs to
focus on complying and enforcing existing regulations. It is stated that they need to
concentrate upon governance, culture, and regulatory framework along with financial
services so that they can review incentive as well as remuneration structures. They also need
to maintain litigation as the default enforcement outcome despite enforceable undertaking
and infringement notices (Winter, 2019).