HR is important in every industry, but it's especially crucial in the financial sector. Banks, brokerage firms, credit unions and other enterprises all rely on their HR departments in order to maintain compliance with federal and state regulations. Furthermore, some institutions are counting on their HR teams to change their culture and overcome cultural issues. Simon Hayward, senior partner at Cirrus, explained to HR Magazine that HR has to be the driving force of evolution within the market.
"Changing that for a new set of beliefs is a big challenge, and although it has got to come from the top, HR is the catalyst for cultural change. You can change mechanisms like benefits or [move] away from commission-based sales, but if the underlying belief structure is the same, you are not changing behaviors in the long-term," Hayward said.
Few departments can enact change as effectively as HR. Representatives within this group account for disparate elements like workforce management and benefits administration that can affect the culture within an organization. By taking various factors into consideration, HR can ensure that an enterprise is operating transparently and works with the best interests of its clients instead of chasing the almighty dollar.
Improving compensation
According to American Banker, one issue that caused the recent banking crisis was the lack of HR oversight into incentives plans. The news source points out that updating compensation strategies may have dulled the impact of poor strategizing from financial leaders.
If a department is allowed to monitor wages and determine the qualifications for bonuses, enterprises can avoid faulty practices as employees won't be able to deploy unscrupulous methods in order to sell specific services to customers to boost their bank accounts.
Fixing leadership
American Banker goes on to note that HR has to overhaul procedures for identifying and qualifying new leaders. This means identifying management traits and assessing employees who demonstrate these characteristics. That latter step is crucial, as an HR department has to gauge a management candidate's potential before putting him or her in a position to climb the corporate ladder.
Improving leadership process should be on many financial institutions' agendas. The HR departments within many organizations must start revamping their processes and searching for prospective executives. This will ultimately lead to enhanced operations and gradually drive change in the sector as a whole.