Financial services firms need to change their human resources policies so that they no longer rely on recruiting, developing and retaining the "best and the brightest", according to a leading academic.
Professor Keith Bradley of the Open University Business School told last month's meeting of the Foundation for Performance Measurement that this traditional cornerstone of such organisations' competitive strategy would prove ineffective in the future. What was needed was a "critical reassessment" of human resources practices in such firms.
In particular, he told the body - which is dedicated to extending the scope of business information beyond the conventional focus on internal historic and short-term data - that it was a mistake to see human capital as synonymous with intellectual capital.
The two concepts were "the mirror image" of each other, he added. Likening intellectual capital to a recipe book as opposed to the chef, he said that it typically took the form of manuals and templates. "Intellectual capital is not scarce, it is cheap to reproduce, firms can own it, it will work 24 hours a day, it never wears out, never leaves unless instructed to do so and it can be in many places simultaneously."
At the same time, even firms with elaborate human resources practices fail to appreciate that, as much recent research has suggested, individuals in the financial services field as well as others are not as motivated by remuneration levels, status and career development as has been thought. A proven stronger motivation, Prof Bradley added, was the ability to have greater discretion over the time and place of work.
"Traditional human resource policies fail to address this and this fuels the turnover of experts," he said, pointing out that there was a lot of evidence to suggest that experts were increasingly leaving traditional firms and favouring "serial at-will contracts" over permanent life-long attachments. Such contracts were being brokered by agents who were becoming increasingly important in financial services.
The lessons were clear. "Failure to embrace professional temporary employment agencies and develop in-house technologies which decant individual skills and expertise make financial service firms vulnerable," he told the meeting.
The Foundation for Performance Measurement was established in 1992 to serve as a forum for research and debate and as a link to tools and resources for organisations interested in developing new ways of measuring their performance.Reuse content