Critically evaluate your learning teams work of Part 1, outlining the strengths and weaknesses/limitations of the frameworks and ideas used in the group part. Please assess the people management strategy through your reflections. You may either use other literature to strengthen your case or apply the ideas to your own/other organizations not discussed in Part 1. • The length of Part 2 is approximately 1000 words, including the (academic) referencing and other appendices.
This paper will identify and critically discuss current trends in the changing world of work, while exploring implications for the organizational leadership. Additionally, it will evaluate the effects of these changes on various stakeholders and will present a new people management strategy for Credit Suisse as a response to these transformations.
In the second, individual part of this document, the group work will be challenged by exploring its strengths and limitations as well as through more extensive reading.
Current trends in the world of work
“The only thing that is constant is change” (Heraclitus). It is an inevitable truth faced by people and organizations. Currently, the world of banking is facing a lot reforms stimulated by the use of artificial intelligence, big data, and consumer demand shifts due to the demographic changes. This chapter will explore more in depth the impact of these changes on the workplace particularly.
Artificial intelligence in the workplace
An unprecedented breakthrough is happening in the workplace of organizations going through task distribution and competencies. The origin of this turning point is Artificial Intelligence (AI), which is a transition from man-assisted monotasking machine towards a smart analysing, learning and independent machine capable of suggesting solutions that overpass human’s thinking sometimes. Until today, humans and machines had more of an oppositional rather than collaborative relationship. This revolution represents an opportunity to enhance companies’ capacities by using AI for big data processing. The people and the machine are meant to be complementary in the business, and therefore humans have to remain the cornerstone of the organizations (Deloitte, 2018).
According to Forrester prediction, 7% of current jobs in the US may be substituted by cognitive technologies by 2025 (Forrester, 2016). It has already happened in the HR world, with affinity matching algorithms that scan CVs searching for key competencies. However, some companies, like Ubisoft and Thales, are already in another dimension, using virtual reality (VR) to analyse future employees’ behaviour through realistic work simulations (IGS-RH, 2020). Indeed, some areas will be reached more efficiently than others: “Office and administrative support staff will be the most rapidly disrupted.” (Forrester, 2016).
Some companies now use cutting edge software to assess whether an applicant is honest, highly educated or intelligent by decrypting video-interviews and interpreting mood, gender and other traits (Deloitte, 2018). These applications of AI give us a better insight of what the recruitment process for a white-collar job will be in the future. Nonetheless, AI is an evolution that requires a lot of raw information to be effective. That is why big data will play a big role in the workplace as well.
Big Data in the workplace
Credit Suisse along with other leading banks has started integrating big data into their operations and services. The term “big data” refers to the collection of complex and large sets of data, which are difficult to manage and process using traditional methods (Jeske and Calvard, 2020). In terms of institutional implications, big data has tremendously helped Credit Suisse to reduce costs by driving up productivity and saving 10 hours a month per analyst (Cloudera, 2020).
From an HR perspective, big data helps to identify new sources of workforce value, that were impossible to find before the data revolution and digital transformation. It also is useful in exploring many ongoing challenges, such as data reporting standards and human capital metrics when engaging with senior governance in decision making and closing the skills gap (Jeske and Calvard, 2020).
Using big data, Credit Suisse has studied its employees over time, including promotions, raises and life transitions to predict who might leave the job in the subsequent year. Mr. Wolf, Global Head of Talent Acquisition and Development at Credit Suisse affirmed that the bank can save $75-100 million a year with a one-point reduction in unwanted attrition (Silverman and Waller, 2015).
Given that replacing employees proved to be costly, Credit Suisse prefers to focus on retaining them. As a result, in 2010 fewer than half of the jobs at the bank were posted, while most of the positions were taken by outsiders. Additionally, the bank now posts more than 80% of jobs and cold-call current employees when jobs open up. As a result, the internal program helped to promote 300 people who could have taken positions at other banks (Silverman and Waller, 2015).
Demographic change and different generations in the workplace
Like societies, organisations are not immune to the demographic changes and the appearance of new age groups. Generation Y, also called ‘Millennials’, has already been a challenge for the job market. Their daily use of internet and leap in digital skills defined them as the first wave of digital generations (Garai-Fodor, Csiszárik-Kocsir, 2018, p. 3). Now it’s successor, generation Z has various specific characteristics that sets it apart as the second wave. According to Puiu (2017), connectivity is seen as indispensable and no luxury at all. Koulopoulos and Keldsen (2014, cited in Puiu, 2017, p. 62) developed the table below to emphasize significant differences in mind-set before and after generation Z.
Figure 1: Attitudes before and after GenZ (Source)
As a result, older generations, like baby boomers are confronted with an age group of workers that embrace failure and see uncertainty as something predictable. This essential difference in mind-sets can cause new sources of tension and disagreements. Therefore, management is forced to facilitate such teams to benefit from each other’s strengths and reduce tensions.
To describe the interrelation between generations, Baby Boomers are the parents of Generation Y, while Generation Z arise from Generation X (Puiu, 2017, p. 63). Generation Z is one of the most team-oriented generations and technology friendly. They expect constant change and continuous learning. Figure 2 outlines more differences between the last four generations and the way they model the workplace.
Figure 2: The differences between the four generations (Source)
Sarah Alter (2019, p. 78) elaborated three key findings about Generation Z. One of them is the customization of their career, as they want to expand their skills. Secondly, they actively live diversity and expect this from their workplace as well. Lastly, academic education is perceived as highly important. As Generation Z makes up a third of the world population, a highly-educated age group is entering the job market later than usual.
Organizations must therefore re-define themselves as livelong partners and provide ways to learn apart from the full-time portfolio, while ensuring enough places for a rising number of students. Additionally, companies need to be aware that new employees will enter the job market at a higher stage and it will be more difficult to shape them compared to previous generations. A later entrance will also raise their salary expectations, wanting to compensate for ‘lost’ years of employment due to studies.
According to surveys in the US, Generation Z is highly focussed on financial stability and are willing to sacrifice personal fulfilment for that. Further, financial benefit packages and instant feedback are key decision drivers for job selection (Belote, 2019, p. 4). Organizations will need to develop salary packages that contain a high financial component, but also supplementary elements to increase the payroll significantly.
And last but not least, due to demographic changes and the subsequent entrance into the job market, employees will ascendingly feel the need for private provision. Therefore, companies will need to establish corporate provision programs as part of employee benefit programs.
People Management Strategy for Credit Suisse
The following chapter will present a new people management strategy for Credit Suisse, that is in line with the corporate strategy and at the same time addressed the workplace trends the company is facing.
Corporate Strategy of Credit Suisse
Credit Suisse (CS) strives to provide customers with holistic solutions that contain tailored advice as well as innovative products (Credit Suisse, 2019, p. 16). It has three regionally operating divisions, which include the Swiss Universal Bank, International Wealth Management and Asia Pacific. CS seeks to further strengthen its core capabilities, namely wealth management, investment banking and strong partnerships for its domestic market. Besides the strong connection to Switzerland and a continuous capitalization in mature markets, CS turns evolving markets, such as Asia Pacific, into key growth drivers (Credit Suisse, 2020).
Implications of the People Management Strategy
Given the workplace trends described in the first part of this paper, a new people management strategy has been developed for Credit Suisse to tackled these challenges as illustrated in Figure 3 and described in detail in this chapter.
Figure 3: The new people management strategy of Credit Suisse
For a better company development, it is crucial to continuously discover new talents and this new strategy outlines several fresh approaches in doing it. Firstly, building on the opportunities of AI and big data a new internal recruiting system will be established. All publicly available information of prospective job applicants will be scanned by the system to allow for an automated AI headhunting in identifying and attracting the required talents.
Secondly, Credit Suisse will adopt an early-on recruiting strategy inspired by the IT sector, where organizations recruit students before they finish their studies in order to obtain the best minds. The company will build a network of partnerships with universities to get direct access to the talent and will create a scholarship fund to nurture and grow the brightest students.
And thirdly, taking into account the immense applications of AI and the fact that it is slowly becoming an integrated part of the workplace, being able to work with artificial intelligence tools will be a new necessary skill. Therefore, Credit Suisse will start to test the job seekers abilities of working with AI in addition to the traditional team working skills. This step will also allow the company to identify areas that will need further improvements or facilitations.
To address the technological challenges in the workplace, Credit Suisse will introduce DevOps, which is an enhanced cooperation method between the IT developers and operations staff by working together on the whole life cycle of projects (Wiedemann et al., 2019). It consists of a continuous flood of information between developers, operations and a monitoring system to check quality of small pieces of code ready for exploitation by AI and workers on CS’s software. With this quick flow, Devs receive automatic feedback and can improve to adapt to the changing banking market (Wiedemann et al., 2019). The Ops’ work is widely eased as the Devs now fully understand their needs and integrated all exploitation problematics during the conception phase. In the same way, Ops have a better awareness of Devs’ needs, which allows a better optimization of production resources, monitoring, error reporting and a much greater working atmosphere in CS’s offices. For the purpose of implementing this Agile method in developing and improving the financial software’s and digital services, a full collaboration of stakeholders is required. The HR department will have to facilitate this transition to ensure its success.
Additionally, when implementing DevOps, Credit Suisse will take into account the demographic challenges. Specifically, the different learning and communication approaches between the generations, knowing that the younger ones turn more often towards digital solutions in this process (Piktialis, cited in Murphy 2012). To increase the synergy of DevOps teams, CS will engage the more digital-savvy generations in training the others to develop IT competencies, such as general computing and internet screening (Kaše, 2019). This apprenticeship will offer an enhanced access to information, a more global understanding of the company’s work, and an increased job performance across all the workforce (Mullen and Noe, cited in Harvey et al., 2009).
Furthermore, Credit Suisse will establish an internal mentorship program to strengthen the bonds between generations and facilitate knowledge and skill transfer. HR will have the role of monitoring any inequalities that might arise within teams and tackle them before the team spirit might be spoiled by peer jealousy (Day, 2000).
Demographics and academics also affect the way Credit Suisse needs to manage careers. According to the Federal Statistical Office (2019), the number of students in Switzerland is constantly rising having its peak in 2018/19 of 58% more students compared to 2000/01. Paired with an aging population in Switzerland (Federal Statistical Office, 2019), the company must ensure that knowledge is transferred as fast as possible, since the transition time is shrinking. Given that the labour force is constantly decreasing, while experience and age of retirement are constantly rising, CS will adapt their career management plans. It will start by helping its employees to plan their retirement early-on to prevent loss of knowledge. Additionally, it will introduce standardized part-time models for elder people who want to remain with the company after retirement, but maintain a shorter working program.
The change from a lifelong employment towards a more protean model, made employees more responsible for their own career. But HR can gather data and make talent visible towards senior management, who then decide on how to use that potential (Tyson, 2015). CS will follow such an approach in order to bind potential leaders and offer a career perspective.
In order to ensure that company’s customers receive state-of-the-art solutions, a significant investment into know-how is necessary, which is also part of the career management. One step in that direction is the co-foundation of i.AM Innovation Lab through Credit Suisse Asset Management (i.AM Innovation Lab, no date). To support employees in developing their creativity and entrepreneurial thinking CS will introduce a ‘corporate sabbatical’. Inventive employees with a need for change will be able to develop their ideas in the innovation lab and help the company strengthen the scope market and deliver innovative services.
CS went under a major restructuring plan for 3 years and 2018 was the first year since 2018 in which they achieved a post-tax profit since 2014 (Credit Suisse, 2019, p. 4). Therefore, the bank should introduce OKRs (objectives and key results) as it can accommodate the variability of AI. As banks measure performance on financial targets, OKR can be beneficial, as effective key results are time-bound, specific and include a number which can be measured against. A key result either can be met or not as there is no room for doubt. As a result, it can help CS to get the measure of success in a more practical way (Herman, 2018).
CS should drive the behaviour of employees to align with the organisation’s values, goals and strategy. In their 2018 annual report, they state that one of their core principles is entrepreneurial thinking (Credit Suisse, 2019, p. 20). Research shows that 72% of Generation Z want to start their own company, and there are more than 2bn of them worldwide (Jennings, 2017). Therefore, CS should focus on driving intrapreneurship within the workplace in order to get the most out of these individuals. This can boost productivity in CS perspective and make Z feel that they can make an impact given that 60% of them are value driven and want to make a change in the world (Jennings, 2017).
As a financial services company, CS can set up special fund programs for internal employees, such as the personal education fund, the children’s education fund, and endowment insurance in addition to basic security. In addition, different loan amounts can be issued to employees according to their positions, which not only provides economic basis for employees, but also improves the correlation between employees and the company.
Credit Suisse can increase pay for employees and plan career paths with promotion opportunities by differentiating the technical complexity of the job and quantifying the labor outcomes of each employee as much as possible, so that employees can clearly see their future in the organization and improve their loyalty to the organization (Peng, Wu and Chen, 2015). Predictably, it is also an effective incentive to establish a reasonable distribution mechanism and employee rise channel according to labor and quality output.
However, for some employees, income is not the only factor that motivates them to work hard (Rynes, Gerhart and Minette, 2004). Because of the rapid change of modern society, the emergence of new technology and the substitution of human resources, everyone is faced with the renewal and challenge of the knowledge and skills needed to complete the work. Hence, it is also a good choice to provide targeted educational opportunities for employees or overseas training opportunities, which will meet the development needs of both employees and enterprises at the same time and achieve a win-win effect.
Big Data offers a lot of opportunities for the company in addressing various components of the human resource strategy. At the same time, it cannot be used without addressing ethical and confidentiality issues. Such an access to employee data comes with a lot of responsibility. It would be advisable that Credit Suisse creates an internal directory to assure its workforce that they are going to go to extreme lengths in protecting their data. That is especially important, in the light of the recent scandals, where Credit Suisse has been accused of corporate espionage against its own executive employees. The company has admitted to hiring spies to follow its former human resource director and head of wealth management division (Markotoff, 2019).
Cybersecurity attacks, privacy, identity theft, discrimination are important issues the company has to take into account when operating with big data. Fraud analytics might be one of the ways to control the vulnerability of sensitive information across the organization and identifying hidden patterns (Cohen, 2019).
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