Impairments to Talent Management in the Banking Industry

 

Impairments to Talent Management in the Banking Industry



Nowadays the banking sector faces several impairments in effective implementation of Talent Management.

These challenges can affect employee performance, organizational growth, and the ability to remain competitive in an increasingly digitalized environment.

1. Resistance to Change and Rigid Organizational Culture

Many traditional banks operate within hierarchical structures that resist change. This creates barriers to innovation and adaptability, particularly in adopting modern talent practices such as agile HR systems and continuous feedback loops (Ulrich et al., 2012). Resistance from senior management and long-standing employees can impede new talent strategies and limit organizational transformation.

2. Skill Gaps and Talent Shortages

The rapid integration of digital technologies in banking has created a skills mismatch. Banks often struggle to find professionals proficient in data analytics, cybersecurity, and fintech systems (Deloitte, 2021). This gap is exacerbated by outdated training programs and insufficient investment in upskilling and reskilling initiatives.

3. High Turnover and Employee Attrition

The banking industry, especially retail banking, is often perceived as high-pressure and monotonous, leading to high turnover rates. A lack of career development opportunities and weak engagement strategies contribute significantly to employee dissatisfaction and attrition (CIPD, 2020). This disrupts talent pipelines and increases recruitment costs.

4. Lack of Strategic HR Alignment

In many banks, HR functions are still seen as administrative rather than strategic partners. This weakens the integration of talent management into broader organizational goals and limits HR’s influence on workforce planning and succession strategies (Armstrong & Taylor, 2020).

5. Limited Use of Data and Analytics

While data-driven decision-making is gaining momentum, many banks lag in using advanced analytics for talent acquisition, performance tracking, and employee development. Without reliable data, banks face difficulties in predicting workforce trends or identifying high-potential employees (Bersin, 2017).

6. Regulatory Constraints and Compliance Demands

Strict regulatory frameworks often shift the focus of HR and management teams away from developmental goals toward compliance obligations. While essential, these constraints can delay or deprioritize critical talent initiatives (KPMG, 2020).

References

  • Armstrong, M. and Taylor, S. (2020) Armstrong’s Handbook of Human Resource Management Practice. 15th ed. London: Kogan Page.
  • Bersin, J. (2017) ‘People analytics: Recalculating the route’, Deloitte Review, Issue 21, pp. 57–65.
  • CIPD (2020) Resourcing and Talent Planning Survey 2020. [Online] Available at: https://www.cipd.co.uk
  • Deloitte (2021) 2021 Global Human Capital Trends: Special Report for Financial Services. [Online] Available at: https://www2.deloitte.com
  • KPMG (2020) Future of HR in the Financial Services Sector. [Online] Available at: https://home.kpmg

 

Comments

  1. A. M. S. Saumya AdikariAugust 1, 2025 at 8:27 AM

    This blog post gives a clear and helpful summary of the main problems that make it hard to manage talent well in the banking industry. The focus on problems like resistance to change, gaps in digital skills, and poor strategic HR alignment is a good reflection of what's going on in the industry right now. One useful addition could be examples of banks that have successfully dealt with these problems through innovation or strategic reform.

    ReplyDelete

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