HRMT20024 Essay: Challenges in Financial Employee Retention

This essay examines the critical challenges of retaining and attracting employees within the financial sector. It begins by highlighting the high employee turnover rates and the sector's significant contribution to the Australian GDP, emphasizing the need for effective human resource management. The essay delves into key HR responsibilities, drawing on ten journal articles to analyze factors influencing employee retention. It discusses the importance of effective communication, career development opportunities, and the integration of various HR aspects, including monetary and non-monetary benefits, work-life balance, and fair pay. The essay also explores the impact of job design, recruitment and selection processes, learning and development programs, and cultural fit on employee retention and organizational productivity. Strategic Human Resource Management (SHRM) is presented as a critical concept, emphasizing its role in aligning with organizational goals and addressing talent management issues. The essay underscores the importance of adapting recruitment strategies to attract a diverse workforce, particularly women, and emphasizes the need for financial sectors to implement strategies to overcome the financial uncertainties and employee skill shortages.

Running head: Challenges in Retaining and Attracting Employees
Challenges in Retaining and Attracting Employees
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1Challenges in Retaining and Attracting Employees
Introduction
In the contemporary business environment retaining workforce has been a challenge in
the organization due to numerous factors. The current paper focuses on the key challenges in
attracting and retaining workforce in financial sectors. The employees in this industry needs high
level of competency in order to deal with the customers and maintaining good relationship with
the customers. Therefore, retaining and attracting employees in this type of industry is
challenging for the management of the organization. It is observed that is a significant increase in
employee turnover rate in the financial sector. It is opined by Kramar, that there has been a
significant relation between the employee turnover rate with non-monetary and monetary
employee benefits. The financial sectors are highly responsible for various activities which
incorporates strengthening the nation’s economy and maintaining the economic structure. This is
enhanced by the extensive contribution towards GDP. In 2018, according to the government
released financial records the financial sector of Australia has made a he contribution with
around $150 billion to the GDP. It is also recorded that the sector holds around 450,000
workforce within the organization. Regardless of the growth of the sector, it has been observed
that the organization are facing huge issues with retaining and attracting potential employee in
the organization. The essay primarily focuses on analyzing the key Human Resource
responsibilities and roles in order to overcome high level of employee turnover issues in the
financial sector. The paper focuses on reviewing ten journal articles for brief understanding of
the concept and draw desire conclusion. The different challenges and factors behind the
challenges are discussed in the paper. The five selected Human Resource management themes
which would be relevant to the paper are ‘Strategic Human Resource Management’,

2Challenges in Retaining and Attracting Employees
‘Recruitment and Selection’, ‘Managing Employee Retention’, ‘Job Design’ and ‘Career
Planning and Human Resource Development’.
Discussion
In the article by Mohamed, Katua Ngui & Mulili (2017) stated that ineffective
communication in between the diverse functions of human resource management. The article
evaluate the banking sector in Sudan and on a specific focus towards agricultural banking
sectors. The top management may face issues by creating barriers in the implementation of
strategic tools in the organizations. In financial companies it is observed that the lack of effective
communication could result in voluntary turnover. In the financial sectors the management must
provide the individuals with career development opportunities so that the employee could feel
the growth opportunity in the organization and will not leave the company. It also fosters the
new employees to work and join the company who are seeking better opportunities in the
financial sectors. Therefore, the organization need to understand the integration if various human
resource aspects to manage the rate of employee turnover. The strategies incorporates monetary
and non-monetary benefits, fair pay to the employees, incentives, work-life balance for
especially the women employees. This factors motivates the employees to stay in the
organization and work dedicatedly for the organization. From the article it is well assessed that
the human resource practices especially the benefits helps the employees to stay motivated and
carryout their responsibilities effectively in the organization. Since, few decades the financial
sectors utilizes the motivational approaches in order to keep the employees motivated and this is
how the employees can be retained and attracted to the financial sectors as well.
In the article supported by Talukder (2011), proposes that job Analysis and Job Design
are the two human resource management function which helps the individuals to embrace and

3Challenges in Retaining and Attracting Employees
leverage the performance of the employees in the organizations and also helps them to embrace
to achieve their professional objectives and goals. The job design function in overall supports the
following other human resource management functions (HRM) such as career planning, job
evaluation, selection, work design and performance management. It is highly necessary for the
operation manager of the financial sector to align their organization strategic goals while
working on the job deign of the employees (Gialuisi & Coetzer 2013). It is highly necessary that
the designed job for the employees is realistic and doable by the employees. It is observed that
most of the Australian financial sector use diverse motivational approaches to design jobs for the
employees. It is also recommended that the managers must implement and oversee the three
motivational approaches such as biological, mechanistic and perpetual motor.
As opined by Siengthai & Pila-Ngarm, (2016), the job design has a significant role in
embracing job satisfaction within the employees. The article focuses on the banking sector in
Thailand. When there is a positive effect on job satisfaction, employees tend to give their best
performance in the organization and the employee turnover rate is reduced. Therefore, the
financial sectors needs to focus on analyzing the job satisfaction level of the employees. The job
satisfaction can be embraced by redesigning their jobs of the employees in the organization. This
initiative would lead to increased performance of the employees. It is quite difficult to retain
employees if they are not satisfied with their job, especially for long term and for attracting g
new candidates as well. Change management in the financial sector would help the management
to understand their employee needs and where the organization is lacking in order to satisfy the
employees. The research of Siengthai and Pila-Ngram, also suggest that the human capital
development is also a crucial part of human resource management functions which is used to
motivate the employees so as to maintain their level of performance intact by leveraging the

4Challenges in Retaining and Attracting Employees
level of competencies, skills and knowledge within them. Job design is applicable in the diverse
areas of HRM for example: offshoring, talent management and emotional labor. With reference
to financial sectors, the management must focus on three vital areas which incorporates job
analysis, job design and workflow design. This areas will aid the company to decrease the
employee turnover and would help to retain the potential employee of the organization. This also
gives a good scope for the new candidates to try in financial sectors. Therefore, from the above
article concludes that job analysis and job design does impact in retaining the existing employees
of the organization.
One of the findings of the research conducted by Kossivi, Xu & Kalgora (2016), suggests that
recruitment and selection are the key function which helps the organization to find the right kind
of candidate for the job. This approach helps the organization to reduce the turnover arte and
attract the potential employees predominantly. Maintaining the organizational productivity in the
major competitive business environment is the most difficult task for the all sector of business. In
financial sector the management needs to focus on the recruitment and selection process and
more prominently the diverse characteristics of vacancy for example; external recruitment,
internal recruitment and high pay strategies as well. In the article by Wheeler, Halbesleben &
Harris (2012), it is stated that effective advertisement promotes better recruitment process.
Attracting potential employees is challenging, therefore the financial sector is required to cover
all the effective techniques which includes financial institutes and public employment
consultancies. The technological advances has emerged in recruitment and selection process as
well. There are various online job portals which could help the finance sector to find skilled and
competent employees. There has been argument by Siengthai & Pila-Ngram that while the
selection process, there must be varieties of selection procedures such as testing emotional

5Challenges in Retaining and Attracting Employees
intelligence, communication skills, interpersonal skills, psychometric test, financial knowledge,
work experience and at last team work competencies. According to the article the most
significant areas where the management must focus on while recruiting in financial sectors are
financial knowledge and communications skills very specifically. Recruiting potential employees
also helps in retaining the employees as they would feel satisfied in doing the job of the
organization.
In the article, by Siengthai & Pila-Ngram (2017) suggest that learning and development is the
approach in which there is continuous development of competencies and skills of the employees
so as to leverage the employee’s workability in order to achieve the organizational goal and
objective. The management focuses on embracing most of the organizational aspects such as
individual’s growth and career. There are numbers of financial organizations and banks which
has deliberately encouraged the individuals to gain adequate knowledge on finance and
appropriate skills through the Vocational Educational and Training (VET). It is highly necessary
that the management of the company must follow the “Australian Qualification Framework” so
as to provide adequate support to the Vocational and Educational Training Programs (Lepistö &
Ihantola, 2018). The training and development sessions which are provided to the employees
helps the employees to embrace their skills. The finance sector could implement effective
training sessions otherwise they may face issues with employee retention.
In the article of Parry & Jackling (2015) that diversified cultures show effective results in the
organization. The same when applied to recruitment the number of candidates applying for a
particular job increases and hence giving good opportunity to the financial sectors recruit more
candidates. The major challenge observed while recruiting in financial sector is there are less
number of women employees hired in the financial sectors. Therefore a culturally fit recruitment

6Challenges in Retaining and Attracting Employees
criterion in the management of Australian financial sectors would help them to recruit women
employees making a diversified organization. The article suggest that the culturally misfit
employee could enhance the organizational productivity and the employees who are culturally
misfit in the organization could bring difficulties for bringing productivity in the organization.
With reference to the following research Gialuisi & Coetzer has stated that when the
organization lack the involvement of culturally diverse employees in the organization can bring
threat to the growth of the company especially in the present multicultural society. Therefore,
recruiting in a diversified manner in Australian Financial sectors would bring innovation,
creative and skilled members in the organization which would help the organization to grow and
face the present challenges with employee turnover and attracting potential employees. More
specifically The Professional Service Firm which is operating under Australian financial sector
need to change the way of recruitment and selection so as to reduce the rate of employee
turnover rate. Henceforth, it is assessed from the above article that recruiting culturally fit
employees and the practice in the organization would be beneficial for the financial sectors and
deal with the employee turnover issue.
As opined by Pila-Ngarm & Siengthai, (2017) the SHRM function is the most critical concept
in the human resource management. This is the most important which needs to be applied in the
organization and must be aligned with the organizational goals and objectives. The article
suggest that the use of strategic human resource management is required to enhance the overall
performance and productivity of the organization. In the competitive business environment, the
use of strategic human resource management helps to deals with the coming challenges of the
organization by implementing strategies. The financial sectors needs to implement the strategies
under strategic human resource management to overcome the financial uncertainties. The

7Challenges in Retaining and Attracting Employees
strategic human resource management includes work design, HR planning, employee relation
and diverse activities which when implemented in the organization helps to enhance the
productivity of the organization. The financial sector is facing problems to manage talent which
ultimately desires the effectiveness of training and development practice. Since, the existing
employees are walking off from the existing organization there is tremendous employee skill
shortage in the organization especially in the financial sectors. In order to pertain the following
issue the article suggests on the relevance of the strategic human resource management.
Significantly, there has been challenges seen in recruiting skilled employees for a vacant job,
consequently using the strategies and analyzing the external environment would help the
financial sectors to recruit right kind of candidate. Apart from this issue, the article also justifies
that the human resource management has faced significant difficulties in the pre and post levels
of merger and acquisition.
It is observed that inconsistency in the implementation of diverse human resource
management functions the post-merger integration and the pre-merger strategies could create
challenge within the Australian financial organizations (Gomes et al., 2012). The financial
sectors can engage itself with the skilled full workers by focusing the four major aspects of the
human resource management concepts that is formulation, assessment, control and
implementation. Therefore it is assessed the significant use of strategic human resource
management plays a vital role in retaining the employees in the financial sectors.
As proposed in the article by Jung & Takeuchi (2018), the employee retention cane be
achieve by effectively developing the human resource management strategies aligned with the
organizational goals and objectives of the company. The employee turnover is categorized by

8Challenges in Retaining and Attracting Employees
two type’s concepts that is voluntary turnover and non-voluntary turnover. The article suggest
that in the financial sectors employees mostly take voluntary turnover. On the other hand in order
to curb the involuntary turnover it totally depends how the financial sectors sets the human
resource concepts and frameworks in the practically in the finance industry. On the other hand
(Cavanagh, McNeil & Bartram 2013), have also proposed that financial sector which are
operating in the country Australia the article suggest to implement the Outplacement Programs
and Employee Assistance Program in order to overcome the involuntary turnovers. It is the duty
of the manager of the organization to make the employees involved in the psychological
challenges in the program. The major issues for employee turnover proposed by the author in the
article are lack of job satisfaction lack of career development and poor financial remuneration.
Therefore, the article suggest using HR policies and its rule sand regulation in the employee
contract would help the employees with the financial remuneration and human resource
frameworks with the career and job satisfaction issues. There are other issues related with the
credibility and autonomy in the organization which restrains the employee retention. This issues
can be dealt with the appropriate decision-making, fair chance to each and every employee,
leadership approaches and strategic approaches.
In the research conducted by Asrar Mirza & Riaz, (2012) found that training need assessment has
a significant and relevant relation with employee relation. The article basically focuses on the
Islamic banking sectors and its issue with hiring employees. It is observed that in many financial
sectors due to improper training the employee get highly demotivate and choose to leave the
company. As the study found that many employee feel incompetent of doing their job in the
finance sector. This issue can be resolved by focusing on the effective training of the employee
in the organization.

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Conclusion
It is assessed from discussion and articles that finance sector is currently facing major
challenge in retain and attracting potential employees. From the above articles it is justified that
implementing key functional areas of human resource management more specifically job design,
career planning, recruitment and selection, training and development and motivational factors are
the some major activities which would aid the financial sectors to effectively carry out retaining
the employees and reducing the turnover rate. The same is effective while attracting potential
candidates in the finance sectors. Therefore, it is important for the human resource managers to
analyze the current issue and take necessary steps.

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