Is NAB's hunt for talent the best plan?
National Australia Bank’s scavenger hunt for 600 technology specialists might prove to be fruitless given the intensifying war for technology talent.
Recruitment for the new positions - in software engineering, data, architecture and security - will take place immediately, the bank said on Friday.
The announcement comes after NAB last week flagged the loss of 4,000 jobs in a move to reshape its workforce and save $1 billion in costs by 2020.
“We know this is an ambitious target and acknowledge the war for talent is intense, but these are the essential skills and roles we need in order to deliver our plan,” said NAB chief technology and operations officer, Patrick Wright in a statement.
NAB’s strategy has sparked comment from Peoples’ Choice managing director, Steve Laidlaw, who is choosing a different path for the mutual, while acknowledging that a digital world will redefine many of the roles in the sector.
According to Laidlaw, changing consumer preferences and technology will impact about 300 roles for a credit union like Peoples' Choice.
According to MinterEllison partner Keith Rovers, that’s a great news story and a sustainable way to manage human capital, but a mutual doesn’t have analysts and the market bashing it up over cost-to-income ratios and the resultant short term focus as NAB does.
With maximising shareholder return in mind, he thinks NAB appears to be going down this route to get its cost-to-income ratio on par with or below competitors and to manage perceived threats from non-traditional rivals.
“My point with NAB is that that it should get a short-term bounce on the market - so investors are happy - but it then cops a bashing from unions, its customers and the public," he argued.
“Its reputation, brand, social licence will take a hit and this raises the question as to whether this dampens financial performance over the long term?
"How much does it cost to on-board and integrate new people? How long will it take to find and integrate the new talent and is the talent readily available – and at what cost?
"How many of the existing staff could be re-trained and in what time frame? These are people who know the culture, the products and systems and so are way down the integration curve."
"I presume management has done the analysis, but you wonder if this is a reaction to investor pressures and whether there is a better way of transitioning and adding value to the human capital required for its future business?”
The lawyer questions whether maximising shareholder value and bowing and scraping to appease that "God", is always in the longer-term interests?
“Shareholder primacy in that sense can be a dead end.”
In his view, NAB may well struggle to fill the tech positions, as it could take months or even years to fill those 600 positions and it already has a talent pool which is skilled and imbued with the culture.
Not all 4,000 staff will want, or be able, to make the journey, but in this era of lifelong learning, he believes retraining people who are capable and willing to do the hard yards could well be a better starting point.
According to Rovers, there may be another approach which looks at the employees, the bank's human capital and the investment that has been made to date and considers whether additional investment – in retraining (some not all) - could bring those people along on the journey of building value.
"The issue is the sustainability of human capital, this way you’re improving your assets, not discarding them.
"What impact would such an approach have on rebuilding trust and what would that do to long term value?"