Give urgent priority to talent development and management, says Bank Negara governor
THE challenge for recruiting and retaining the right talent has become increasingly more competitive and this is particularly acute in the financial sector, said Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz.
Financial institutions are facing increased regulation, greater uncertainty in the operating environment, uneven competitive conditions and a severely damaged reputation in many parts of the world.
"These developments have important implications for the financial services workforce. The bar on professional competence demanded of talent in the industry has also been raised significantly," Zeti said during the launch of the two-day Asian Institute of Finance International Symposium 2013, here, yesterday.
The best business schools from around the world have come under great scrutiny regarding their ability to produce the kind of talent that organisations require and a major overhaul is needed.
There has also been a growing focus on the role of talent in regaining confidence in the financial sector, in terms of ethical standards and values and the strength and integrity of its leadership.
The financial sector, however, remains highly productive in relative terms.
"In Malaysia, for example, the financial sector has had the highest total-factor productivity growth over the recent decade relative to other sectors of the economy," she said.
Employment in the financial sector has also been growing annually, with a large proportion of the growth, being in the higher skilled segment.
This accounts for the higher level of wages in the financial sector at about RM36,000 annually, compared with the national average of RM21,700 annually for the economy.
Zeti said in light of the more challenging environment, generating the supply pipeline for talent and addressing the short supply of critical talent with new skills need to be given urgent priority.
By skills, she was referring to new and higher technical competencies - including in the area of risk assessment and management - required by financial institutions in the new operating environment and including the growth in Islamic finance.
Additional new skills include those in change and crisis management, business recovery planning, the ability to develop and sustain long-term customer relationships, and skills to direct and manage operations in international and cross-cultural contexts.
No longer about the efficient delivery of support services, financial institutions need to carefully consider the higher expectations of regulators for compensation and incentive systems to be more closely aligned with prudent risk taking.
For emerging economies such as Malaysia, the right talent is needed for the current environment, Zeti said.
While investments in education reform and people through the education process is vital, this will require time before they will generate results.
It will involve continuous capacity building for every part of the career life cycle, from the entry point to senior management and leadership.