Human capital development is a fundamental need that has to be fulfilled for there to be growth and innovation in any sector. Education, training, learning and development are the building blocks of our progress as an industry, and we are fortunate to have realized this in the early stages of the development of the Islamic banking and finance industry. This is evidenced by the growing number of education and training service providers across the globe, which is not just confined to Muslim-majority markets. In this article, DR AMAT TAAP MANSHOR assesses the human capital industry.
The UK is a leading provider in education for the industry, seeing a healthy mix of professional and academic courses. As of 2013, there were 477 education service providers globally, and 1,363 published research papers on Islamic finance (according to the BIBF Knowledge Indicator). The number of education providers are expected to breach the 1,000 mark in 2016 (Yurizk), in tandem with market expansion.
Review of 2015
As we near the end of 2015, there have been several significant strides in the development of human capital for the industry. Aside from the growing number of courses and certificates being introduced into the market, there has been more emphasis on the need for leadership development and skill-building within Islamic finance circles. Widespread media coverage on this issue alone is testament enough to the increasing awareness for proper structures to be placed around efforts to build a competent workforce to serve the industry, while industry and academia are making a concerted effort to come together and seek solutions to solve the human capital gap.
One of the more resonant catchphrases for 2015 with regards to human capital development in Islamic finance was the need to address the ‘talent mismatch’. The talent mismatch in this sense refers to the disparity in skillsets between what is required by the market, and the skills that fresh Islamic finance graduates currently possess. This was further highlighted by the ostensibly rising number of unemployed graduates in Islamic finance who are said to be unable to gain employment within the sector.
A cursory glance at the sector, however, will tell you that the Islamic finance industry is in dire need of talent. According to reports by the Malaysia International Islamic Financial Center and Kuwait Finance House Research, the industry will require up to one million skilled individuals to enter the workforce by the year 2020. This makes perfect sense, as the growth of Islamic banking assets across the six core markets of Malaysia, Indonesia, Qatar, Saudi Arabia and the UAE alone are expected to touch US$1.8 trillion by the year 2019, boosting the need for talent to support growth across core sectors.
Why then, despite demand very much exceeding supply, are there still unemployed graduates in this field? Industry players will tell you that these graduates lack many basic skills, such as critical thinking and strategic planning, technical knowledge and practical experience, as well as product development (according to the FAA Talent Development Survey 2014). And until these issues are addressed in a structured and timely manner, this ‘talent mismatch’ will continue to be a hindrance to any meaningful progress in the human capital space.
Preview of 2016
As a means of addressing this skills gap and mismatch in talent, as well as enhancing quality learning in the industry, the Finance Accreditation Agency (FAA) has undertaken the development of an industry-wide professional program structure specifically catered to the Islamic finance industry, known as the Islamic Finance Professional Program Structure (IFPPS).
The IFPPS aims to support the strengthening of competencies for human capital across the globe through the provision of guidance on the design, development, delivery and assessment of professional programs in Islamic finance, based on the Finance Qualifications Structure and FAA Learning Standards. As a conceptual tool, it is expected to provide the mechanism to eventually streamline and classify learning levels into a single framework.
The goal of the IFPPS is ultimately to serve as a benchmark for all stakeholders within the Islamic finance education sphere, from regulators and policymakers assessing the relevance and feasibility of professional learning programs within the industry, to training providers seeking the best standards in developing learning programs as well as industry players and students seeking the best Islamic finance programs to support their workplace needs.
It is hoped that this effort, alongside many more industry initiatives, will provide the adequate guidance and structure to produce quality talent in order to successfully address the current human capital issues our industry is facing.
Moving forward, it is also important to keep several things in mind, as we, as industry stakeholders, make crucial decisions related to the industry’s growth and sustainability, as follows:
- Focus on strengthening the fundamentals: Human capital and talent are the core building blocks in creating a sustainable industry and propelling growth. Talent needs have to be addressed early on.
- Have a long-term vision: The industry as a whole, as well as organizations and stakeholders in Islamic finance must have long-term plans for addressing human capital needs and talent development, as well as leadership succession. Company and industry policies must center around these long-term goals, especially when it comes to recruitment, training and hiring.
- Knowledge acquisition: Creating a supportive learning culture is vital to the growth of any organization and industry, as most employees learn on the job – especially in sectors such as banking and finance. A workforce that is able to continuously learn and adapt to overcome new challenges is of incredibly high value, especially when looking to achieve innovation and progress.
- Design and delivery of learning programs: Training providers need to give more thought to the design and delivery of learning programs, as effective learning transfer and the ability to implement this knowledge should be the ultimate goal.
With these in mind, it is hoped that we as an industry can collectively address the current issues in human capital development for Islamic finance, and produce quality talent for the benefit of the industry as a whole.