A s most Islamic banks are relatively small, they often have difficulty in attracting and remunerating “high fliers” and in providing appropriate training and career progression. Most of those who work for Islamic banks are motivated by religion however, which fortunately means there is relatively little staff movement back into conventional banking. As Islamic banks grow, they can provide more attractive employment conditions, especially as the largest widen their remit to include investment banking rather than just retail products. This already applies to the five largest Islamic banks in the Gulf as well as four of the institutions in Malaysia. Employees in conventional banks who are employed within an Islamic finance affiliate sometimes regard this as a side step in their careers rather than a progression. However, again, much depends on the size of the Islamic finance affiliate and the range of services it offers.
PROFESSOR RODNEY WILSON:
C ounsel, coach and educate. Not just a case of the package, it is much more an issue of sharing a vision, setting a direction and executing the plan. If key staff identify with these things and feel motivated to participate in achieving the goals, then they will stay to share in the success. DAUD VICARY ABDULLAH: Chief operating officer, Asian Finance Bank
Every sector knows bull and bear periods. At those moments, there always is a shortage/excess of personnel. For now, Islamic finance is subject to rapid expansion because of: (i) an abundance of funds; (ii) accelerated growth from relative novelty to mainstream; and (iii) its being on the brink of sudden globalization. Sufficient trained personnel from the conventional financial markets are available. They will bring much needed innovation and competitiveness. In the international labor markets, a combination of net salary linked to health insurance appears to work better than additional perks and retirement schemes. But there is major concern that the decision makers (either at the planning — the execution — or supervision level) should not only receive a pure “halal education” and learn sophisticated maneuvering within the agreed upon ratios and guidelines. They should really know the underlying values to keep the industry sound. Technique alone is simply not sufficient or uneducated mishaps from people who think “they know it all” could endanger valuable reputations. Besides the schooling of sufficient Shariah scholars, all efforts should be combined to educate sufficient lawyers/financial engineers/managers on the Shariah principles. Public Islamic universities and training centers have a mid- to long-term vocation for this. Also, Islamic Development Bank could have a role there. Private initiatives by bigger Islamic financial institutions (or combinations of smaller Islamic financial institutions or associations thereof) should also be highly encouraged on the more “practical industry level”. Maybe we should not only give prizes to the “best performer” or “most innovative” in the market (those people receive enough attention as it is), but also to the “best educator” that usually stays unnoticed. PAUL WOUTERS: Partner, Bener Law Office
The principal problem is that most of the businesses involved in Islamic finance do not themselves adopt the risk and revenue sharing Islamic enterprise model they are in the business of selling. Those providers of financial products wishing to retain key personnel should therefore cease regarding them as a “cost” to be minimized in a contractual employment relationship and instead engage with them in the same revenue and risk sharing partnership arrangements they purport (and in some cases actually manage) to offer. Firstly, this makes good sense in business terms in the way it aligns their personnel’s interests with their own in terms of: Secondly, the more far-sighted intermediaries are coming to realize that in an “Internet-enabled” world investors are increasingly able to connect directly — or “peer to peer” — with investments and that their role as “middlemen” is obsolescent. It follows that in such an emergent “Web 2.0” environment financial intermediaries must evolve from an intermediated model of value extraction to a service provider model of shared value creation. In other words, “Ethical is Optimal”. CHRIS COOK: Principal, Partnerships Consulting
Retaining good staff is undoubtedly important, but what about the equally challenging task of attracting qualified and capable professionals in the first place? It may sound cliched, but those who plan better, prosper, and prosperous organizations are more attractive and durable employers because they plan better, and are able to achieve a closer and more successful match between the professionals they hire and their vacant positions. An urgent requirement in this regard is that Islamic financial institutions (IFIs) must begin to invest more in human resource (HR) departments to improve HR skills and capabilities. Additionally, and by definition, ideology should be a more significant (and in some ways, crucial) driver of progress for the Islamic finance industry (similar to ethical investments), as compared to other industries. Although this should be a distinct advantage, it remains largely unexploited. Moreover, rather than predominantly seeking to import “ready-made” quick-fix solutions in the form of conventional bankers making the switch, it would be well worth the effort and expense for IFIs to also invest in root solutions, such as training and cadre development programs within the institution, which are likely to result in more durable IFI-staff relationships. It is also true that further improving the Shariah-based credentials of their products will quite likely assist IFIs to attract and retain those who are ideologically committed to the industry, who number more than a few, and would be, ceteris paribus, more willing to stay for the long haul. DR SALMAN KHAN: Senior product manager, BMB Islamic
|