In Conversation with Makarand Khatavkar on Role of HR in Banking Industry

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In an exclusive Conversation we have Makarand Khatavkar, Group Head – Human Resources at Kotak Mahindra Bank Limited.

Prior to joining Kotak, he led HR at Deutsche Bank, India, where he oversaw the function for global markets, investment banking, wholesale banking, retail banking,  institutional equities, private wealth management, asset management and the CIB centre. With around three decades of experience, Makarand has built HR teams from scratch more than once.

He has mastered the art of achieving commercial outcomes through HR strategy, the skill of influencing business leaders to achieve organizational synergy and leadership An accredited coach (ACC) by International Coach Federation, he is passionate about coaching. He has coached leaders at Director, Business Head and CXO levels across financial services, FMCG, banking and consulting sectors.

Makarand is an alumnus of Tata Institute of Social Sciences with master’s degree in HR. He has also received training at Case Western Reserve University, Cleveland, USA and ISB Hyderabad.

Q- You have gained very rich experience as an HR leader working with prominent banking and finance companies. What are the challenges you think are prevailing in your industry as an HR business partner?

In this disruptive era that we are witnessing, the HR space is far more exciting and strategic than it has been in the past. While the broad themes may appear similar to the past, the depth, context and complexity may be overwhelmingly different.

There are somethings I believe HR practitioners will have to imbibe in them and thereby enable the organisation to deal with,such as:

  • Creating flexible, adaptable structures and collaborative cultures will be a big ask from HR professionals.
  • HR will have to build the skillset to create data based AI and predictable models. This will be specialisation agnostics requirement i.e. Talent Acquisition, Talent Management, Performance Management or Succession Planning 
  • HR will have to think of external customers more than ever before and align hiring, rewards and performance management processes from the standpoint of external customers.
  • The ability to withstand the pressure and demands and being more collaborative and creating a learning obsessed organisation will be another expectation from HR practitioners.
  • With companies facing rapid disruptive changes, yesterday’s skills are becoming obsolete at an accelerating speed. Reskilling is now a necessity to ensure that the current talent is still relevant in the current and future business scenario.

Q- What are the current talent challenges in banking industry?

Technology and the external dynamic environment are redefining and reshaping the banking industry. Technologies such as robotic process automation, machine learning, and adaptive intelligence are already beginning to have a significant impact on compliance, payments, and retail services, among other banking functions. Banks need employees with the skills to understand how these technologies can be effectively applied, and they need agile and adaptive workforces to navigate these changes.

Following are a few talent challenges we anticipate in the coming years:

  • Attracting and retaining the right talent: With many budding fintechs making their way into the BFSI space, in addition  to new NBFCs, banks have a tougher challenge to attract and retain the right talent. Customer experience being the differentiating factor in the banking industry, Fintech or other technology companies are actively and aggressively luring talent from banking.
  • Identifying the skills and experiences to stay competitive: Research has shown that the talent gap between supply and demand of qualified resources is widening. The environment is so volatile that it’s difficult to accurately define what the future looks like, therefore creating a pool of talent that has the mental agility to adopt and adapt to the changing environment will be the key.
  • Grooming leaders for Future Leadership roles: The above situation demands that leaders learn to be receptive to new skills and newer ways of thinking, including disruptive thinking. With the Gen X being the smallest of the four demographics who will be soon required to take over management roles, banking will be forced to rely disproportionately on millennials as this generational shift happens. 

Q- What are the leadership challenges in managing multigenerational diverse workforce?

As Jack Milligan argues in one of his articles “Demographically, many banks are layered like a parfait, with as many as four distinct generations working in the organization, each with its own set of personality traits, likes and dislikes,” As baby boomers approach retirement and generation X moves up in the management hierarchy, Milligan points out that generation X is the smallest of the four demographic groups at 20 percent.

A few key leadership challenges will be:

  • Overcoming Unconscious Biases& Functional Fixedness: In a multi-generational workforce, there is potential for negative stereotyping. Older workers may perceive millennials as entitled, tech-obsessed or too eager to challenge norms while millennial employees could see previous generations as being ‘stuck in their ways’ and difficult to train. Leaders need to take steps to ensure managers overcome their unconscious biases.
  • Striking a balance between Disruptive Innovation versus Managing Productivity and Cost: Younger workers’ enthusiasm for trying new things could be used to encourage a culture of innovation, while older workers can leverage their experience and broad perspective to help millennials understand some of the costs and risks associated with their ideas.
  • Engaging with multi generation workforce: The concerns and needs of the baby boomer or traditionalist generation are very often different from the Gen X or millennial generation, nevertheless they all want and need to be engaged and need a manager who can coach or mentor them and help them achieve their professional goals. The leader’s challenge is to see how they can use the different strokes for different folks approach in resolving this need to be engaged and grow.

Q- Organizations are focusing on Leadership Development, Re-skilling and Up-skilling the Workforce, how do you see its relevance in your organization?

The rapid changes in the business landscape has a direct influence on the changing employment landscape. Many of the major drivers of transformation currently affecting global industries are expected to have a significant impact on jobs, ranging from significant job creation to job displacement, and from heightened labour productivity to widening skills gaps.While some jobsare threatened by redundancy and others grow rapidly, existing jobs are also going through a change in the skill sets required to do them. So yes, continual Up-skilling and Reskilling the workforce is more relevant than ever.Let me list down a few things we are doing at Kotak beyond the regular classroom training and leadership development interventions we have for employees of different roles and grades.

Getting Future Ready: BLURR@ program

For the bank, the biggest challenge that the digital space throws upis that it allows multiple competitors to emerge in different areas.New age fintech companiesdisintermediate profitable customer facing businesses and avoid capital intensive areas. Therefore, the bank needs to decode itsstrategy in the digital age. This progressive vision will be achievable only when you have the entire workforce aligned not just to the vision but also to the mindset of making Banking Digital.

The Digital BLUR™ framework helped us to do just that…A holistic view to get the bank ready for next generation banking needs.

The expected outcome from the leadership was as follows:

  • Understand the basic concepts of “Being Digital “and “What does it mean to have a digital mindset”?
  • Being open to possibilities and have an open mind to infinite possibilities.
  • Extracting value from the current business model by identifying new opportunities (using digital mindset).
  • Solve current pressing business problems with possible digital solutioning and ideating on innovative ways to resolve issues.
  • Looking at current data from the digital solutioning lens and fueling it with insights and brainstorm on possibilities to enhance process optimisation and customer experience.

Here too we were pioneers in the banking industry to launch a project of this nature.

Given that learning habits are changing with everybody wanting to have everything on the go and at their fingertips, digitising learning experience is inevitable. And yet, there are some programs which need face to face interventions. For a blended learning experience in the leadership development space we have:

  1. AI based Learning (Edcast): We have provided mid-senior level managers/ leaders with an artificial intelligence based learning platform which aggregates and customises learning bite. This is a mobile first app and we are pioneers in the banking industry to introduce an AI based learning curriculum for our employees
  2. Developing Leaders for the future: We have a robust development framework to develop the leadership pipeline. We have diagnostic tools like Hogan, Predictive Index and 360 degree feedback to identify leadership development needs. This is then followed by triad coaching discussions (External Coach, Manager and Incumbent) and Individual Development Plans (IDPs) are developed accordingly. We also have interventions like Leadership Series programs which is a 2-day classroom program which focuses on topics like Coaching, Delegation, having a performance conversation etc.
  3. KLAAP for Sales Force: This is an in-house learning app for junior employees and new joinees. This platform caters to dual needs of an employee- 1)Learning on the go where learning content gets pushed through this learning app. 2) This app also acts as a ready reckoner for sales employees when they are on the field.

The above flagship initiatives are over and above the classroom interventions designed based on the role or grade of the employees. These classroom programs range from executive presence, presentation skills, influencing skill, personal excellence program etc.

Q- What are some of the key diversity initiatives in your organization? Any specific disability and LGBT programme?

The Diversity framework is being driven through three key drivers:

  1. Talent Attraction and Assimilation:  A differentiated talent acquisition strategy to increase the women employee base across various suitable roles. Initiatives like all Women Probationary Officer batch, empanelling diversity consultants are few examples to actualise talent attraction and assimilation.
  2. Engaging through Flexibility: Provide an enabling environment where women employees feel empowered and cared for and are able to deliver consistently at desired levels of performance. Strisangini, Sabbaticals, Women friendly part time working policy, extended maternity leave, preferential reserved seats, toy library, women safety measures are some of the initiatives designed to engage and support our women employees.
  3. Developing/Nurturing: Help High-Potential women employees to build long-term sustainable careers with the Bank and establish themselves as leaders across segments/ verticals. Womentoring @ Kotak:  We organized two session of mass mentoring sessions on ‘how to mature as a professional and manage work’.
    • With the objective of including senior management in the diversity agenda and allowing them to facilitate it, we have created a group of senior women professionals of the group called “Astra”.  This group of 40 women is helping in guiding and mentoring women in their circle of influence at their respective work areas.

Q- What are some of the key wellness initiative for Kotak employees? Please tell us few Health & Wellness programmes in your organization?

At Kotak we have an entire gamut of innovative employee health and wellness programs to address the full continuum of emotional and physical wellness of an employee. This holistic corporate wellness approach encourages employees to achieve their personal health and wellness goals and provides necessary assistance.

Apart from having a well-equipped health care centre to conduct preliminary examinations like Blood Pressure, ECG, Body Fat, BMI etc., we also have on-site doctors and nutrition consultants to help employees meet their health goals. Three key initiatives I am proud to share with you are:

Health Advice on your Fingertips: We launched a Wellness portal and App for employees. “My Wellness” Platform, powered by Ekincare is aone stop shop for all healthcare requirements for identified employees. Along with discounted health checkup plans, the following are the key features of the portal:

  • Does a Health Risk Assessment based on medical reports.
  • Provides Online Doctor Consultation through in-app feature.
  • Gamified Health Goals to encourage employees and their peers to adopt a healthy lifestyle. There are 21-day to a few weeks challenges ranging from Walking XX number of steps everyday or 21days no smoking or no sugar challenge etc.
  • Curated and Customised Health tips & Recommendations.
  • Provides Digitised Health Records of employees as well as family members which is accessible to all employees at their convenience.

Health Talks and Awareness initiatives – We conduct various health awareness programs and talks for our employees which range from Ergonomics, Heart Health, Talk for Women, Spine and Prostrate Health, Stress Management to Parents to Pal.

Health Check-up& Vaccination Camps at discounted prices–We organize onsite and off-site health checkup and Vaccination camps where employees can enroll with few renowned diagnostic centres at discounted prices.

Q- How do you see future of jobs in banking industry? Due to technology advancement, which jobs will be replaced and which will be on high demand in your industry?

The banking industry is at an inflection point where technology is enhancing efficiency by doing more and at a faster pace than what humans could do.Technology will not only transform the job atmosphere but will also make a lot of jobs redundant. The traditional jobs like passbook updating, cash deposit, verification of know-your-customer details, salary uploads are going digital and are being replaced by AI or robotics based solutions.

As the digital revolution progresses, banks will be on the lookoutfor people with an evolved set of skills, specialising in up-and-coming applications such as virtual reality, predictive algorithmic etc.

“Many of the roles and job titles of tomorrow are unknown to us today. Artificial intelligence will not replace human intelligence. Blending the best technology with the power of people will be the difference between good and great when it comes to customer experience.” As per research conducted by Tom Cheese wright, the roles in demand will the ones which require skills like aesthetic design, branding, user experience and 3D mechanics or understanding of risk management, service design, and financial literacy, or someone who can go beyond solving immediate challenges to surprise and delight customers requires a mixture of creative, linguistic.Critical skills for tomorrow’s customer advisor are a combination of product and domain knowledge with excellent customer communication and empathy. This will require a level of comfort with the key communications technologies, including performing in a virtual environment.

Q- What do you think has been the biggest learning for HR in 2018 and what are the upcoming HR trends for 2019 and beyond?

  • HR technology will emerge more than ever before. Technology will teach literally all the elements of a typical employee lifecycle. As I have said before, self-service will be the basic tenet of organisational working and to that extent, transactional jobs like managing routine data, transactions, and controls will be eliminated. Even highend tasks like employee induction, basic functional training will be performed by bots. Employers themselves will be expected to take significant responsibility for learning and development. HR professionalswill have to manage shorter and fragmented employee life cycles. We will see higher degree of technology deployment in areas like performance management, learning and wellness.
  • In my view, HR professionals will need deeper understanding of new technologies and additionally, they must also be sensitive to managing the potential ill effects of technology. Employee well-being, stress management and medical costs will take up significant time of HR professionals.
  • Overall, HR professionals will have to be technology savvy. It’s the behavioural and social scientist who will be responsible for managing the disruptions skilfully and humanising the workplace of the future.

Q- What should be the HR Resolutions for a Successful 2019?

Moving with technology, the landscape of Human Resources has been undergoing enormous alteration in its roles and functions. Unlike the conventional supporting role, HR is increasingly playing a leading role in critical business decisions. In my opinion, the HR resolution for a successful 2019 will be multi faceted

  1. Digitised HR employee experience
  2. Sharper focus on HR Analytics
  3. Redefine Learning and Empowering
  4. Employee Wellness given Work-life Balance is emerging as one of the critical employee concerns

Thank You Makarand!

Note- This Interview was published in SightsIn Plus, Jan 2019. Currently Makarand has left Kotak Mahindra Bank to start his own coaching practice in India.

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