HRMT20024: Challenges in Finance Sector Employee Retention Essay

This essay examines the significant challenges faced by the Australian financial sector in attracting and retaining employees, highlighting the impact of high employee turnover on the banking sector's growth and human capital management costs. It analyzes key issues such as skills gaps, the retention of millennial talent, the increasing power of employee choices, the importance of creating an attractive workplace culture, and the role of strategic human resource management (SHRM). The essay explores various themes and techniques, including effective communication, diversity management, concise HRM policies, continuous training, and performance and reward management, to overcome these challenges. It emphasizes the need for financial organizations to adapt their HR strategies to remain competitive, motivated employees and foster a thriving work environment.

Running head: MANAGEMENT RELATED TO HUMAN RESOURCES
Management Related to Human Resources
Name of the Student
Name of the University
Author note

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Introduction
The essay helps in the overall kind of analysing and conducting a proper research
which is based on understanding the challenges faced by the financial or banking sector in
attracting or retaining various types of employees present in the entire Australian finance
sector. The increased level of the employee related turnover in the different kinds of
employees has not only affected the growth of the banking sector, it has increased the cost of
managing the human capital to the high level of extent. According to Yong et al. (2020), the
turnover of employees has the significant relationship with both monetary along with the
non-monetary rewards along with benefits provided to employees.
The Australian Financial Sector is playing a significant role and helps in
strengthening economic structure through making the massive level of contribution to the
entire Gross Domestic Product. With the help of various financial records which have been
released by the government,the banking sector has been capable of making the contribution
of $150 billion to GDP in the year 2018. There are more than 450000 employees are
employed at the financial sector of Australia who have the capability in contributing towards
the growing level of workforce (Wang&Reger, 2017).
Though, in few decades, despite of the growth which have been happening, the
respective industry has been encountering the high turnover of employees. The respective
essay has been able to advance analysis of the Human Resource roles along with
responsibilities for overcoming the turnover rate to some extent from the finance sector.
There has been inclusion of five major themes that includes design and analysis of the work,
development of human resource, and recruitment along with selection, career planning and
the strategic HRM Chung, 2019).

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Identification of Challenges in the Attraction and Retention of the Employees in
Finance Sector
There are various kinds of functions of HR managementwhich includes job design
and job analysis as it enhances the performance level of employees and facilitate the
employees in achieving the professional goals along with various objectives. In case of
financial sector, there are different issues which includes the following challenges in
retention of the suitable employees in the banking sector which are described as follows:
Skills Gap-Shen& Benson (2016), have observed that the Skill Gap in finance
industry is continuously widening in the last few years and in the year 2016, from the
different surveys, it has been found that more than 70% of the financial services, the Chief
Executive Officers have been able to check the availability of the different key skills which
are considered to be the threat to the growth. Due to the such aspects, it leads to the
ineffectiveness in the performance of the finance sector in Australia. Presently, many
organizations in the finance sector have lost the popularity from the time of economic
downturn and it is influencing the entire performance of the entire organization successfully
(Rothaermel, 2016).
Retention of Millennial Talent- The retention of employees in the financial or
banking sector is the key element as through the different surveys, it is being clearonly 10%
of the millennials plan to work in overall long prospects. Moreover, due to such happenings,
it costs the company an average of $4129 for hiring the replacement, it has failed in retaining
different kinds of employees. The surveys have confirmed the fact that more than 90% of the
millennial workforce might not be sticking around the same for long span of time and it
influences overall performance of the organization negatively (Reiche, Harzing&Tenzer,
2018).

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More Power and Choices- Presently, the millennials in the Australian economy are
having huge choices to change their jobs and it influences the company’s
performanceadversely. In the current economy, it creates huge power in the hands of the job
seekers as the candidates are becoming choosy about the different other job offers which are
coming their way (Okolie&Irabor, 2017). The candidates are risking their current job for
achieving better opportunities and it puts huge level of pressure on banking sector companies
for retaining the employees. It is the most challenging aspects which is affecting the
performance of financial organizations and the toughest part in performing is that the Human
resource manager is simply trying for appeasing to appease needs of everyone.
Creation of Attractive Workplace Culture- As per the surveys which have been
conducted, it is noticed that more than 70% of the professionals in the Australian economy
prefers to leave the organization wherein the culture is bad and there is no respect provided to
the employees as well (Troth & Guest, 2020). Currently, the culture matters both for
employees and employers and it is importantfor the organizations to keep a check on the
enhancement of the services in a negative manner. The shortage of the mid-career candidates
and they are losing their interest from one workforce within a short span of time. Hence, it is
creating ineffective in the entire performance and closing the current skill gap as well (Kim et
al., 2019).
According to Androniceanu, Gherghina and Ciobănaşu, (2019), it has been found that
the cultural fit is the main aspect that is required to be adopted by the different organizations
as it is the criteria related to the recruitment. In the recent era, the cultural compatibility is the
key element that includes the skilled employees in the banking sector in the existing
workforce. On the contrary, as argued by Im et al. (2016), the lack of proper involvement of
the culturally diverse employees become threat to the organizational growth and it impacts
the level of advantages which can be earned by the business. In respective case, the

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professional service firms which are operating in the Australian financial sector needs to
change the attitudes for recruiting the culturally fit employees as it will be capable of
developing the respective skills and generate high productivity (Ichsan et al. 2017).
Hong and Kim (2019), have been able to delineate the fact that learning along with
the development is considered as the ultimate aspect for the entire development of the
different skills along with the competencies of workers for enhancing the workability of the
employees in achieving the business goals along with theenhance the workability of the
employees. Troth et al. (2020), have opined the fact that in the research related to the training
and assessment aspects are not able to be maintained appropriately as the different millennial
employees are looking forward for better opportunities and it causes high level of ineffective
uselessness in position negatively. Additionally, as stated by Goe and Roth (2019), strategic
HRM refers to the most significant functions that is needed to be applied in various types of
organizations that should be in line with the different business goals along with the
objectives. The main aim of the SHRM is for enhancement of the organizational objectives
for enhancing the productivity of entire organization thoroughly.
Analysis of the Techniques and Themes Helpful for Retaining Employees in Finance
Sector
There are fewissues encountered in attracting along with retaining various talents in
the financial or banking sector in the Australian economy. On the contrary, there are different
strategies along with the themes that can be used for overcoming the different challenges
which are affecting development of the overall success within the time frame. The
development of strategies pertaining to effective communication along with various diversity
management during the pre-along with the post-merger are the two key elements that is

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implemented which will be suitable for assessment of the skills along with competencies of
the employees performing their job (Ferraris, Santoro&Dezi, 2017).
As discussed by Ethiraj, Gambardella andHelfat (2016), the retention and the turnover
of different kinds of employees can be managed effectively through noteworthy strategies
which are developed in the HRM and it must be as per the goals of entire organization along
with efficient in managing the development of company. The key internal along with external
changes can become effective for the evaluation of the operational type of environment for
the different major challenges along with the function of the HR. As discussed by Brewster,
Cerdin and Sharma (2017), the strategy of Human Resource can be developed for promoting
the federal government for the entire development of the administrative aspects which will
prove to be beneficial for managing the success rate of entire organization thoroughly.
For reduction of the turnover of the different workers working in the banking sector in
Australian economy, there are various functions and themes related to HRM that can be
incorporated by the businesses for refining position of the organization in comparison to the
other competitors which are present in the competitive market.
From the different researches which have been conducted by Bergh et al. (2017),
firstly, the policies and procedures of Human Resource Management needs to concise and
clear and implemented in a proper manner in financial organizations for enhancing the level
of motivation of the various workers working in overall organization. It is successful for
generating the level of success in the long term and improves the effectiveness of the
companies in a thorough manner. There are different times when the managers of the HR
department are not in a position for adopting the strategic kind of role wherein they are
encountering the different kinds of issues which are related to credibility along with the
autonomy. It can be promoted through the inclusion of effective leadership approaches

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wherein there will be rapid kind of decision-making approaches and generation of the results
will be positive as well.
Moreover, continual training and development procedures need to be adoptedin the
banking sector in Australian sector that can be playing a competent role. From the beginning
of the days while the employees start working in organization, it is inclusion of the different
training and development procedures that can prove to be highly appropriate in managing the
success of organization in a corrective manner.
During the final hiring stage, the job is required to beproperly explained to the
candidates that can be making them aware of the overall process in a detailed manner.
Furthermore, the employers of the companies can be keeping the employees informed
regarding the different kinds of future plans which are proposed for the business as it is
efficient for the employees to start working. During the procedures related to hiring, the main
aspect that is kept in mind is related to the ongoing performance and the changes which are
required for applying for making the effectiveness of the performance suitably and
appropriately.
In addition, there should be proper performance and reward management practices
included in the process of increasing the growth-related efficiency in the tasks which are
being performed by the employees successfully. The proper and effective networking along
with strategizing within the organization helps in providing the ongoing performance
management and it assists in building relationships among the different co-workers.
Rewarding system is being developed in a situation that can be mainly dependent on the
process and management. Moreover, it is mainly dependent on the different activities along
with movement of different workers who are employed in the banking sector.

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As discussed by Bergh et al. (2016), the reward and appraisal systems are being
included in the finance sector that can be capable of motivating various employees who are
already employed along with attracting the new ones who are wishing to join the company.
Both reward and the performance management system need to be included in the process as it
is efficient in generating the level of performance of the candidates who are employed and
they have the potential in achieving the high rate of success and productivity in the finance
sector companies successfully.
As to motivate the employees in the banking sector in Australia, it is entire
responsibility of the higher authority to motivate them in tough situations that can be
effective in maintaining strong growth and enhance the overall company’s performance
appropriately. The human resource managers of the HR department have the duty for
motivating their employees in negative situational direction that can be effective in achieving
success in the market in a proper manner. The motivation and the rewards are the two crucial
elements that can be making it appropriate and generating high awareness on delivering the
most successful results within the stipulated time frame (Alfes et al., 2020).
Furthermore, the finance sector needs to include the different types of Safety and
Health Related Procedures in managing the different activities and employees in a proper
manner. In the banking sector, there are different types of health legislations and procedures
included in the system that is essential in improving the growth prospects successfully. The
department of the HR is required to be responsible for taking care of them and the different
kinds of dilemmas can be considered with the proper justification of the different employees
who are working in the company.
As discussed by Alfes et al., (2020), the employee retention is the process wherein the
different employees are being encouraged as to remain in the company for the maximum span

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of time and it is proving to be beneficial for enhancement of entire organization. The
employees in the present scene are different from one another wherein they prefer to work as
per their own terms. In the finance department or banking sectors, the employees prefer to
achieve the different opportunities which are received by them and due to the same, it is
creating huge efficiency on the organizational performance successfully.
For reduction of the turnover of the employees in banking sector, there are different
functions related to HRM, which can be shaped and designed as per the different ethical
guidelines. Proper leadership aspects and effective communication are the last critical
elements that is needed for reducing the voluntary retirement in the process of effectiveness
in the finance sector. With implementation of the diverse strategies related to pay such as
financial and non-financial benefits along with the fair pay structure, the Human Resource
Managers of the Australian based financial institutions can be motivating employees and it
helps in managing the turnover of employees and retention will be measured to become one
of the key elements.
Conclusion
After the overall analysis of the essay, the researcher has been able to summarize the
fact that there are diverse functional areas of the HRM that can be playing a significant role
in the reduction of the turnover among workers in the workplace. The redesign of the job
structure and the pay structure can be involved in the HR related functions that will be
making the employees feel that they are being valued and it will be generating huge rate of
success in the managing of the different aspects successfully.
The HR managers can be encouraged in a proper manner wherein the themes can be
included for recruiting the employees positively and fill the vacant positions successfully as
well. It is essential for the HR managers of the Australian banking sectors to focus on the

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effective recruitment of the different candidates through planning and managing the aspects
on the performance management suitably.

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