How to maintain and improve competence in work A Window on Practice - Case Nordea Bank

Transcription

1 How to maintain and improve competence in work A Window on Practice - Case Nordea Bank Minna Rautakoura Head or HR Development Finland 3 October 2006

2 Facts about Nordea Nordea is the leading financial services group in the Nordic and Baltic Sea region (number one or number two position in most Nordic markets) Nordea operates through three business areas; Retail Banking, Corporate and Institutional Banking and Asset Management & Life covering operations in eight countries. We provide wide range of products, services and solutions within banking, asset management and insurance. Nordea is present in 20 countries including Denmark, Finland, Norway and Sweden, where we operate full service banks with nationwide branch networks Nordea has almost 11 million customers, more than 1,100 branch offices and a leading netbanking position with 4.4 million e-customers Total assets EUR 326 billion Operating profit (2005) 3,048 million EUR 2

3 Background information about workforce The total number of employees in Nordea is 31,666 (28,925 full-time equivalents) The average age of employees is 45.2 years The average period of service among Nordea employees is 19.2 years; In some basic customer service job categories 80 % of employees have longer than 20 years of working history in bank The overall employee turnover is 4.3% The gender distribution is 64% female and 36% male Figure: Age distribution / Employees by age. Basically a couple of generations are missing. On emerging markets distribution is the opposite 3

4 Background information about workforce Educational background, employees 35.8% of employees hold a university degree, 38.4% a secondary school exam, and 25.8% a basic education Among managers 51.1% hold a university degree, 39.1% a secondary school exam, and 9.7% a basic education Nordea offers yearly app. 4,5 training days (1.000 euros) / employee in order to maintain knowledge in highly regulated environment Still skills shortage: gap between existing and needed competences 4 Before how to maintain and improve the competences in work we need to address the question why is this so and what competences would be needed?

5 Human Capital Strategy Nordea aims to attract, develop and retain highly motivated, competent and performance-oriented employees. The employees are the foundation of Nordea s successful future development It is a challenge to be an attractive employer for the generations to come and to retain an adequate mix of young potentials and experienced employees in the organisation The realisation of these objectives rests on three focus areas: Attract and develop performance-oriented employees Constantly develop leadership capabilities Ensure highly motivated and satisfied employees 5

6 Change that we have met Our assets in competition have been Utilisation of technology (Internet banking, automation grade etc) => operational excellence and innovations In the history earning logic has supported organic growth and profit increase through interest incomes (financing and savings) => need demand driven delivery that requires accuracy and conscientious workers Not the unique Excellence in competences in general Liberation of Financial markets, increased competition and consolidation in Northern European Banking and Insurance sector have change the earning logic Margin pressure is high and non-interest incomes have became most important source of higher share of income => advisory services and fees from other services Operating mainly on mature markets has lead into that customer relationship knowledge and sales skills in wide perspective are the main capabilities needed. These competences were not basis for recruitment profile years ago. 6

7 What needs to be done? We already have capability shortages - lots of room and need to improve How to use the skills as a tool to perform even better in the future In order to reach higher ambitions and another step up in performance We need to go from a predominantly instruction-driven culture into a more valuebased culture to be more customer-oriented organisation and create a common sales culture Source of competitive advantage (or capability) is therefore to improve the overall performance in sales in critical mass of employees: sustainability of competitive advantage is increasingly based on the development of competences that are hard to imitate such as building relationships, creating great customer experience (service minded attitude combined with customer and result orientation) Organisational set-up, management system and leadership style needs to support this 7

8 Two challenges - at least New recruitments 8 External labour markets do not provide enough right recruitment potential with right attitude. Examples: Introducing Polytechnic education - Bachelor-level degree (ammattikorkeakoulu) in Finland, was a great intervention into our systems these multi-field institutions of professional higher education with practical orientation are not practical enough and system create too high expectations about working career (we do not have those positions on service sector due to endeavour to lower the organisation). Candidates are therefore over qualified. daily work has not changed so fast in terms of complexity and requirements. Graduated are not satisfied with basic customer advice and sales tasks we still need to recruit staff with basic vocational education or general upper secondary education (matriculation examination) and to provide further vocational qualifications or higher education, until bachelor level, ourselves by co-operating with Business schools and Vocational Institutes By doing so we ensure retention and right approach

9 Two challenges - at least Employees with long working experience Existing educational background is solely not sufficient to navigate in the new environment More ambitious business targets Changed content of the daily work and new tools Higher level of competences are needed: Understanding of the whole value chain and value proposition towards the customers To understand the earning logic: why are we offering these services to our customers Customer service and sales skills (result and customer orientation, business knowledge, building relationships) We offer internal training and vocational education and further qualification through co-operation with Vocational Institutes (using apprenticeship training whenever possible). This is a huge investment and we cannot afford not to train the seniors. 9

10 Learning environment some examples of our solutions Annual performance and development dialogue (PDD) - One of the main instruments to identify development needs and to secure the enhancement of professional skills among managers and employees. Requirements of the job are identified in Job descriptions and competences are related to those requirements Personal development plan for each individual (based on PDD and organisational development needs according to the Company strategy) Tools in use in competence development: Both through formal external, internal and on-the-job training (blended learning solutions) 10 Constantly development of all employees Internal Business Academies in different business areas several professional programmes and Academies etc. along with many local internal programmes to support the development of our employees. The junior bank clerk training / Onboarding high school graduates or higher education. Basic banking knowledge.

11 Learning environment - some examples of our solutions Vocational upper secondary education and training that leads to a higher vocational qualification Further Qualification in Financing and Insurance (in Finland). Apprenticeship programme duration 18 months: 20 % of theoretical studies in addition to 80 % of systematic on-the-job learning (individual study programme). Programme is executed together with external Vocational institute, but modified for Nordea requirements. Newly hired and internal (senior) potential aiming to advisory and sales tasks (retraining to be banking advisors) Nordea leadership development programmes Wide range of training for potential, new and experienced leaders to strengthen business results through developing leadership competence. Strong coaching culture under implementation. Trainee and Graduate programmes Programmes for top talents (targets young academics with a master s degree) 11

12 Learning environment - some examples of our solutions Capabilities and new competences are assessed and evaluated through improved Performance: KPI s to measure financial performance of each individual and teams Customer Satisfaction index Learning has been set or subordinated to serve the business strategy fulfilment. Learning and performance are rewarded (Intrinsic and extrinsic rewards) Competence evaluation (self assessments and certificates) are important in management of competences To illustrate Nordea's commitment to competence development 12 Around 80 people in our HR organisation is fulltime occupied with competence development for employees and managers. In addition to that great amount of staff are operating as internal part time trainers besides that we buy a lot from external educational institutions.

13 Questions for further discussion Substantial investments are a must in developing the skills and competences needed in the future If education system will provide different level of occupational training, the basic skills and know-how, our task is to transfer that knowledge into how it will be applied in this job and business environment? Further vocational education and competence development in work should be strongly linked Lifelong learning and continuously development of competences Will supplementary education and retraining be financially supported in relevant extend? 13