Key Challenges While Attracting And Retaining Staff In The Finance Sector

Introduction

Attracting and retaining staff has been one of the most challenging tasks that are faced by most of the Australian companies. Kuiate & Noland (2019) have stated that attracting and retaining staff is all about the culture that is created by the organization which is directly linked with employee satisfaction. Today there is fierce competition among the employees in retaining the employees in the organization because it directly impacts the productivity of the company and its capacity to meet the objective and goals (Azeez 2017, p. 81). Today the Australian finance sector is one of the biggest contributors to the GDP of the country which is currently facing issues of high employee turnover rates. Being one among the largest contributor towards the Australian GDP, more than 7,50,000 employees are working in the finance sector which is facing the prime issue of retaining staff (Kamakia, Mwangi & Mwangi (2017, p. 81).

However, this essay will get into a deep discussion about how attracting and retaining staff in the finance sector comes a challenging task for most of the organization. This essay will emphasize on the arguments and counter-arguments which are made by famous researchers on why Australian companies are finding it difficult to decrease employee turnover rates. The essay will focus on focusing on Managing employee turnover and retention, strategic human resource development (SHRM), Human resource development and career planning, analysis, and design of work as the main themes.

One among the renowned scholar Kamakia, Mwangi & Mwangi (2017, p. 81) has stated that retaining staff or talent comes as a real struggle to the finance sector. It was studied that 89% of the organizations say that it is difficult to retain the best staff in the finance sector across the world. In 2019, the turnover of the employees in the finance sector is 14% which further adds to struggle in the finance sector (Papke 2019, p. 81). From the research conducted by the Craig (2017, p. 24), it was understood that retention of the employees become exceptionally difficult when the employee quotes an extraordinary salary or benefits from the company. However, in the finance industry, the workload on the employees is exceptionally more and the salary is less according to the workload. Craig (2017, p. 24) has stated that dissatisfaction with employees with salaries in the finance sector is one of the biggest concerns in the industry. It is understood that every organization has a set budget that needs to be followed and hence it becomes difficult to retain an employee when the demand is beyond a limit.

Kuiate & Noland (2019) have conducted empirical research on the leading Australian financial companies and stated that employee retention in the finance sector is challenging due to the increasing opportunity. Maybe it starts up, medium-sized company or an MNC, today most of the organizations are looking for good financials who can help them in maximizing the profits and minimizing the expenditures (Azeez 2017, p. 81). There is a cut-throat competition in the finance department today because companies are looking to attract the best talent in the industry. Also due to huge job opportunities in the finance sector, employees decide to leave the company and switch jobs quickly. Craig (2017, p. 24) has indicated that today finance sector companies go a long way to lure great talent from the competitor and provide them high and lucrative packages.

Authors Holland, P., & Collins (2020, p. 19) has stated that unrealistic expectation from the organization can be another issue which can add more struggle while retaining the employee. Today organizations cannot fulfill every demand of the employee which leads to job quits. A study conducted by author has Mittal (2018, p. 11) stated that employees should be mature to understand about his comfort as at the workplace. However, when the expectation of the employees is not fullied by the organization, employees usually look for a job change. This is especially applicable in the finance sector when the company fails to meet the demands of the employees against their culture style. Another major reason why finance employees tend to look for job change is the boring style of the working (Papke 2019, p. 55). Finance jobs are considered to be one among the challenging yet boring job which cannot be done by every individual.

Holland & Collins (2020, p. 19) stated that a job might be interesting or exciting for a finance professional at the starting phase, however, as the work gets monotonous an employee may look for a job change. Finance jobs are monotonous jobs where retention of the employee significantly decreases. Additionally, on further studies, Nassios et.al (2020, p. 859) have stated that although employees working in the finance sector are offered high salaries but it comes with a higher level of stress. According to the research conducted by the author Nassios et.al (2020, p. 859) it was studied that around 47% of the employees keep changing their jobs because they were unable to handle the stress in the company. Employees in the finance sector suffer from high depression and stress levels as compared to employees working in other departments.

One among the key finding which was indicated by the Holland & Collins (2020, p. 19) is the lack of job satisfaction among financial sector employees leads to great turnover rates. However, emphasizing more on this research it was understood that organizations should need to redesign their job features and work culture which can help in the retention of the employees. Without considering the employee concern towards the job there is a high possibility that the employees look for changes in the job. Sawaneh & Kamara (2017, p. 11) has stated that enhancing job satisfaction among the employees can positively relate to decreased employee turnover.

Sawaneh & Kamara (2017, p. 11) has further argued that most of the Australian finance companies should focus on redesigning their job opportunities and work culture to retain the staff for a longer period and reducing the turnover rates. It is suggested that the company should focus on Human capital development which keeps the employees motivated due to his exceptional performance in the company. After analyzing the finance sector it is recommended that the organization should focus on job design, job analysis, and workflow analysis which can help to hedge against the increased employee turnover issue in the company. Scholar Nassios et.al (2020, p. 859) has stated that job analysis as well as job design plays a pivotal role in constructing human capital which can help in lowering employee turnover rates and also improving employee performance in the company.

Holland & Collins (2020, p. 81) has stated that Human resource management plays an imperative role in the recruiting or hiring process which can help to engage the employees and increasing retention rate. It is stated that while hiring the employees in the organization Human Resource managers should focus on making strategies around the internal process, external process as well as high paying strategies (Nassios et.al 2020, p. 89). However, from the research, it was understood that for retaining the employees most of the Australian finance companies today look for various sources of recruitment, internal recruitment, employment agencies, and another kind of agencies. However, the further Sawaneh & Kamara (2017, p. 11) has stated that while trying to hire the employee's Human resource managers should consider selection criteria further including interpersonal skills, attitude, finance skills, communication skills, emotional intelligence, and much more. Finance skills, as well as communication skills, are the two important things that are important while trying to attract the best employees in the industry.

Holland & Collins (2020, p. 81) has argued that while recruiting the employees in the Australian finance sector, cultural fit is an important element. Today looking for culturally fit and efficient employees is the recent trend in the finance sector where organizations look for such employees to meet their company objectives and aims. Hiring or recruiting culturally misfit employees can be considered to be the biggest threat for the organization as it hampers the growth of the company. To prevent these issues, Human Resource Department should focus on employees who are culturally fit and can help to handle finance clients on the global platform. Papke (2019, p. 515) has re-instated on the fact that the Australian finance sector should change their attitude toward the recruitment process to automatically increase employee retention in the company. Therefore to attract and retain the staff, organizational goals, and objectives must align with the recruitment process to reduce employee turnover issues.

Holland & Collins (2020, p. 81) has emphasized the importance of Strategic Human Resource Management which is one of the important functions of HRM which helps the organization to align with its goals. The main aim of the SHRM is to align the organization's activities with goals which further improves productivity and also creates a positive business environment. However, companies must adopt to SHRM practices which can help the company to overcome the challenges faced in the uncertain finance sector. However, on the other hand, retention of the employees is largely dependent upon how HR conducts the training and development program along with the recruitment program. In the current time, a shortage of skills has been the recent issue which most of the Australian finance companies need to deal with (Azeez 2017, p. 81). On the other hand, the human resource manager encounters a challenge to recruit talented employees for meeting the organization's goals. However, in the current business situation, HRM should focus on recruiting employees who can deal with uncertain situations in the finance sector and are also looking to move towards the goals and aims.

Kamakia, Mwangi & Mwangi (2017, p. 81) indicated that finance sectors should look for strategic decisions and planning to decrease the turnover rate of employees which is increasing 2X percentage with other employees. Attracting and retaining employees has become a critical issue where companies compete with each other to hire the best employees. Apart from the cost of retention is high there is the soft cost behind the employees like decreased production, unable to achieve organizational aims, improper company culture, disturbed relationships, high training cost, and much more. Although the retention is high among the finance sectors, organizations should look to adapt to proper ways and procedures which can help in attracting the best talent.

Experienced author Nassios et.al (2020, p. 859) has stated that retaining the staff from the beginning is one of the best ways to attract him for a longer time. The research emphasized Nfrasructure a famous company whose retention rate of the employees in more than 97% and they spend extremely less amount on hiring new employees. Papke (2019, p. 515) has stated that the company should treat the employee in their best way from their hiring process to screening and till the last day of the office. It a return model that employee who tends to work longer with the company is likely to provide high-quality work as compared to those who are unable to retain in the market (Azeez 2017, p. 81).

It is reflected that retaining with the employees is a long source where a company should take all the efforts to show the employee that they are valuable for their company. The author Kamakia, Mwangi & Mwangi (2017, p. 81) has described that providing advancement and progress in the lives of the employee is another effective way that can help in retaining the employees in the finance sector. It is understood that the finance sector is too mainstream where the career has limitation and the promotion is assumed to be delayed most of the time. Due to the narrow nature of the finance sector, it was stated that organizations should provide a higher opportunity to process and allow them to work in a higher position. Mittal (2018, p. 11) states learning cannot be a thought or process of the imagination but it should be a part of the culture. Azeez (2017, p. 81) further stated that a reputed organization does not conduct seminars or meetings to hold learning from day to day work. However, in successful organizations, integrated learning is present in every task or project they do.

Papke (2019, p. 515) in his research concluded saying that for reducing employee turnover it is important to design the HRM functions as per the guidelines. It has been found that HR policies should be transparent and implemented appropriately in the organization so that the good talents are attracted to the company and also help in retaining the staff for a longer period. However, the managers should play a strategic role where important decisions are taken thus helping the organization with decent work culture, rapid decision making, and well as effective leadership approaches.

Author Mittal (2018, p. 11) have argued that lack of communication between the Human Resource department and the senior management has been one among the biggest issue which prevents the organization in providing the right culture for the company. Furthermore, it was understood that Australian based finance companies should implement various approaches and methods which help to keep the employees motivated and also helps in curbing the employee retention rate. Thus it was unstated that to increase staff retention in the organization, HRM must focus on practicing diverse functions that help in HR planning, strategic implementation as well as assist in the human resource development plan. To attract the employees and also reduce the turnover rate of the employee's Human resource management functions must be designed as well as executed according to the ethical guidelines.

Conclusion

Throughout the essay, it was understood that HRM plays an important role in attracting as well as retaining the staff in the finance sector. Additionally, it was emphasized that redesigning the job culture, job design, and job analysis was an important factor that allowed employees to remain with the company for a longer period. Great opportunity, monotonous job, and lack of job satisfaction were understood to key challenges that Australian companies in the finance sector face while attracting and retaining the staff. However, the Australian finance company manager must focus on recruiting the employees and also change the culture in which they perform for longer employee retention. Additionally, the essay also highlights that formulating clear HR policies is one among the way that that can attract top talents in the company and also help in retaining the staff in the finance sector. Today lack of quality talent is the biggest issue that most of the Australian finance companies are facing and hence it is the prime responsibility of the HRM department to implement strategies on maintaining the best staff in the company.

References

Azeez, S. A. (2017). Human resource management practices and employee retention: A review of literature. Journal of Economics, Management and Trade, 1-10.

Bhat, I. A., & Bharel, S. K. (2018). Driving performance and retention through employee engagement. ZENITH International Journal of Multidisciplinary Research, 8(1), 10-20.

Craig, D. (2017). Attracting and retaining talent in the digital economy. HR Future, 2017(Sep 2017), 24-26.

Holland, P., & Collins, A. M. (2020). Supporting and retaining employees with rheumatoid arthritis: the importance of workplace social support. The International Journal of Human Resource Management, 1-22.

Jackson, S. O., Lee, P. C., & Shoemaker, J. (2019). ATTRACTING AND RETAINING MILLENNIALS. Human Resources Management Issues, Challenges and Trends:" Now and Around the Corner", 163.

Kamakia, M. G., Mwangi, C. I., & Mwangi, M. (2017). Financial literacy and financial wellbeing of public sector employees: A critical literature review. European Scientific Journal, 13, 233-249.

Keller, S., & Meaney, M. (2017). Attracting and retaining the right talent. Mckinsey. Com.

Kuiate, C., & Noland, T. R. (2019). Attracting and retaining core competency: a focus on cost stickiness. Journal of Accounting & Organizational Change.

Kumar, A. A., & Mathimaran, K. B. (2017). Employee Retention Strategies –An Empirical Research. Global Journal of Management and Business Research.

Mittal, S. (2018). An Analysis of the Potentiality (Loan Repayment Capacity) of Unorganised Sector Employees on the basis of Ratio Analysis Related to their Disposable and Discretionary Income. Indian Journal of Public Health Research & Development, 9(12), 1957-1962.

Nassios, J., Giesecke, J. A., Dixon, P. B., & Rimmer, M. T. (2019). Mandated superannuation contributions and the structure of the financial sector in Australia. Journal of Policy Modeling, 41(5), 859-881.

Papke, L. E. (2019). Retirement choices by state and local public sector employees: the role of eligibility and financial incentives. Journal of Pension Economics & Finance, 18(4), 515-528.

Pradhan, R. K., Jena, L. K., & Pattnaik, R. (2017). Employee Retention Strategies in Service Industries: Opportunities and Challenges. In Employees and Employers in Service Organizations (pp. 53-70). Apple Academic Press.

Sawaneh, I. A., & Kamara, F. K. (2019). Evaluating Employee Retention Strategies on Job Performance. Science Journal of Business and Management, 7(3), 67.

Stroup, C., & Zheng, H. (2016). What are Key Emerging, Employee-Facing Trends in HR that will be Influential in Attracting and Retaining Future Top Talent?.

Thibault Landry, A., Schweyer, A., & Whillans, A. (2017). Winning the war for talent: Modern motivational methods for attracting and retaining employees. Compensation & Benefits Review, 49(4), 230-246.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Human Resource Management Assignment Help

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