The impact of ineffectiveness training program on turnover intention at VPBank

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --- NGUYEN VAN HA THE IMPACT OF INEFFECTIVENESS TRAINING PROGRAM ON TURNOVER INTENTION AT VPBANK MASTER OF

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

NGUYEN VAN HA

THE IMPACT OF INEFFECTIVENESS

TRAINING PROGRAM ON TURNOVER INTENTION AT VPBANK

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR PHAM PHU QUOC

HO CHI MINH, YEAR 2018

TABLE OF CONTENTS

EXECUTIVE SUMMARY 3

I - BACKGROUND INFORMATION OF VPBANK 4

1 Introduction and the current context at VPBank 4

1.1 About VPBank and recent achievements 4

1.2 Technology advancement at VPBank 4

1.3 The importance of human resources management at VPBank 5

2 Symptoms and problem identification at VPBank 6

2.1 Symptoms of problem in human resources management at VPBank 6

2.1.1 Highest turnover rate in banking sector 6

2.1.2 Turnover intention occurred mostly in junior levels 7

2.2 Potential problems in human resources management at VPBank 9

2.2.1 Interview results of employees with turnover intention 9

2.2.2 Initial Cause - Effect Map 10

2.2.3 Theoritical framework regarding employee's turnover intention 11

2.2.4 Updated Cause - Effect Map 13

2.3 Central problem identification 14

II - PROBLEM JUSTIFICATION 14

1 Definition of "Effective training" 15

2 Justify the existence of ineffective training program Error! Bookmark not defined.5 2.1 Current training program at VPBank 15

2.2 Quantitative research and results 17

3 Justify the importance of effective training program 18

3.1 Decrease productivity 18

3.2 Waste of money & resources 19

3.3 Employees become the biggest liability 19

4 Identify potential causes of ineffective training 19

5 Final Cause - Effect Map 20

III - ALTERNATIVE SOLUTIONS 21

1 Training Center must be restructured 21

2 Digitalizing training programs 24

IV – ACTION PLANS 26

1 Decide on the method of training 26

1.2 Online training courses 26

1.3 Interactive training courses 27

1.4 Utilizing the current training center’s workforce 28

2 Detailed action plans 28

SUPPORTED INFORMATION 31

REFERENCES 43

APPENDIX 45

EXECUTIVE SUMMARY

Becoming one of the largest commercial bank in Vietnam, Vietnam Prosperity Join-stock Commercial Bank (VPBANK) has to face many obstacles and challenges to maintain its status and develop sustainably Maintaining capable workforce is a critical responsibility of human resources management to achieve this goal This thesis will figure out the current problem in human resource management, using current symptoms analysis along with the analysis of qualitative and quantitative research based on primary data at VPBank After discovering the central problem of ineffective training program for junior levels, the thesis would evaluate the causes and consequences of the problem in order to create probable solutions and action plans to enhance the employees’ commitment with the organization Seeing the importance of retaining the young work force for sustainable growth at VPBank, this research is critical for human resources management to control the situation and improve the quality and productivity within the bank

I BACKGROUND INFORMATION OF VPBANK

1 Introduction and the current context at VPBank

1.1 About VPBank and recent achievements

Vietnam Prosperity Joint-Stock Commercial Bank (VPBANK) is a local bank with 25 years of operation and development in Vietnam In the last five year, VPBank has achieved some remarkable development and success VPBank has the charter capital increased from 5,770 billion in 2012 to VND 15,706 billion in 2017, with more than 215 branches and around 12,000 official employees including official employees and collaborators

In 2018, VPBank is listed in the top 40 most valuable brands in Vietnam, ranked

13th with the brand value of USD 99.2 million, which outperforming other joint stock commercial banks in Vietnam In addition, with many other awards in 2017, it is also announced as the “Best Unsecured Lending Product in Vietnam” and “Best Digital Banking Initiative in Vietnam” by Asian Banker These awards prove that VPBank has run on the right track with its mission to focus on retail banking with advanced technology and digital application

Follow these achievements, in the next 5 years, VPBank has the challenging objectives to remain top 3 leading retail join-stock commercial banks with sustainable but aggressive organic growth, as well as focus on digital bank for retail customers and small and medium enterprises

1.2 Technology advancement at VPBank

Along with the expansion nationwide, VPBank has faced many challenges of managing the work force and the operation cost Strategically, it has built a strong foundation systems in terms of organization, human resources, technology and operation Until 2017, almost all of these systems has been setup (SAP System for Human Resources, Finance and Administration; LOS and T24 System for Loan Operating System and Auto Approval System, etc.) Even the IT division is operated

as a full-circle IT service organization However, with the banking system with more than 12,000 employees, the challenge is how to keep the employees on track with

the bank advancement According to Akyüz et al, given extensive training, employees would felt trusted and invested, thus they would want to commit and contribute to the organization with the knowledge and skills they are provided 1.3 The importance of human resources management at VPBank

According to the HR Strategy Model (Appendix 1), it is critical for human resources management to control all factors related to the organization strategy’s goal Especially at VPBank with the significant growth recently, the bigger the organization become, the more difficult and complicated for human resource management in training & development, recruitment and other staffing issues

Considering characteristic of banking operation, there are complicated products and procedures as well as banking specialization that needed training Otherwise, there will be internal fraud and breach of regulations that employees would do without knowing Sometimes, the cases would even need the participation

of authority to investigate In recent years, there are several cases of fraud in Vietnam banking & financial market that worry the employees, which lead to more fluctuation in the banking workforce In 2008, Fulbert confirmed that banking regulation can keep the bank from crisis, and also contribute to the economic growth and stability

Regarding VPBank with the focus on retail customers (both unsecured and secured loans), the risk is higher in banking operation as well as human resources management For example, the bad debt from retail loans is not significant compared

to the size of the bank, but hundreds or thousands of them would lead to serious problem If the personal bankers (sales persons) are extensively trained about the banking operation and products and those risks, the total bad debt might decrease considerably Moreover, focusing on the retail segments, the collection team are much needed to remind their customers about the pre-due debt or on-going debt It would require specific skillset to do it properly, and imagine there are several hundreds of collectors to acquire these kind of skills The question for human resources management is how to manage these teams with suitable payment and

fringe benefits for retaining the work force (i.e training & development), but also manage it with minimum cost for the bank

Additionally, VPBank is a young-generation organization with more than half of the work force at the age of below 30, even with the managing level with only 3 - 6 year working experiences In term of recruitment, the hiring process is quite strict and selective Only fresh graduates who pass the test (given by another independent test supplier) or experienced candidates with at least 1 years working in financial/ banking sector have chances to interview The interview panel including hiring managers, superiors of hiring manager, and HR representative would decide the suitable candidates for the available positions However, the expectations of fresh graduates and junior levels are different from the experienced ones They not only want experiences, but also learning and development In the research of Jusoh et al (2011), the employers are not satisfying graduates’ expectations It means they would actively find another working places that they hope would meet their expectations As the next five year vision of VPBank is sustainable development, human resource managers would have to find solutions for balancing between young employees’ expectations with minimum cost of human resources for higher profit

2 Symptoms and problem identification at VPBank

2.1 Symptoms of problem in human resources management

2.1.1 Highest turnover rate in banking sector

According to Navigos Search Annual Report in 2017, 43% of total surveyed banks have the turnover rate from 11 to 20%, and only 11% of total surveyed banks have the highest turnover rate at more than 20% (Firgue 1) Considering the small banking market with only total of under 20 banks, it means only 2 banks have the turnover rate of more than 20% and VPBank is one of them Following the human resources data for exiting employees, it is alarming that the turnover rate at VPBank is 23% last year

Compared to the market common turnover rate at 11 – 20%, the turnover rate at VPBank is significantly high and needed in-depth analysis to prevent the number to

increase in the following years Considering VPBank has gained the top position in the list of Top Asia Employer Brand 2017, the flows of employees leaving the bank would impact on the reputation of the bank, thus lead to less attractive employer branding and more instable organization

Figure 1: Navigos Search Annual Report

2.1.2 Turnover intention occurred mostly in junior levels

Due to the human resources report annually from 2015 to 2017, there is gradually increasing trend of turnover rate from 17.2% in 2015, to 20.07% in 2016 and 23.04% in 2017 (Figure 2) Combined with the significant growth of the bank

in the last five years, it can be seen that the bank transformation has affected on the workforce in the short-term However, it should not be a long-term problem because resources for labor force are limited, especially in banking sector

16%

30%

43% of total surveyed banks

11%

BANKING INDUSTRY TURNOVER

SITUATION

Turnover rate at below 5% Turnover rate from 5% to 10%

Turnover rate from 11% to 20% Turnover rate at above 11%

Figure 2: Turnover data in VPBank

Furthermore, it can be clearly seen in figure 3 about the turnover analysis of

leaving employees segmentation The junior levels (who have less than three year working experience) consist of 83.39% of total leaving employees in the first half

of 2018 It means every 10 leaving employees, 8 of them are junior ones This number increase considerably compared to the junior levels leaving the company

in 2017 at only 66.62% of total exiting cases

Figure 3: Turnover segmentation at VPBank

Due to the human resources report as above, it can be concluded that the turnover intention for employees at VPBank, especially the junior ones, is the warning sign for the human resources division to figure out the reasons that lead to the brain draining to the market It would lead to increase in the operation cost and human resources management cost Moreover, as can be seen in figure 4, the recruitment over turnover rate shows that every 1.6 employees onboarding, there is another one exiting The rate even decrease to 1.17 in the first half of 2018, which means almost

a new comer onboarding replace for a person who left Because the headcount planning in 2018 increase in total of more than 2100 new employees, even with high rate of recruitment, this rate of turnover would cause the bank not grow as expected

Figure 4: Recruitment replacing for exiting cases

2.2 Potential problems in human resources management at VPBank

2.2.1 Interview results of employees with turnover intention

It need to be conducted an in-depth survey for leaving employees on their reasons to leave The informants for qualitative research should be the employees who recently have leaving application There are six employees to be interviewed Using open questions with semi-structured interview guidelines, the research with six intensive exiting interviews shows that the leaving employees are not satisfying with the training program for new employees, as well as the product and procedure training are meager They also concern about their income that lead to their decision

to quit

As Ms Hang feedback, it is easier for credit officer to target unsuitable customers segment, thus get more bad debt from customers who cannot pay the fee/debt on time Furthermore, with lack of product training, she found it demotivating to work

As a consequence, with low performance result, she would not get the promised

income she could gain should she reach the sales target The easy way for her as junior officer is to find another job with less challenge and more income

Ms Ngoc, another employees who decided to quit, has said that the reasons for her leaving is her salary Though she has been working at VPBank for 2 years with excellent result, her salary is lower than her friend at another bank She felt under-valued and demotivate to continue to work as hard She believed that she only can increase her salary if she is admitted to the same position at another bank The feedback about salary is also from another interviewees, who said that they expect much more than what they receive

Mr Trong, who works as marketing officer, said that after graduation, he expected

to work in his major and to learn from experiences and on-job training However, in fact he did not receive proper training, thus lead to low productivity and misunderstanding in the department Ms Trang, who also has less than 1 year working experiences, also expect to be trained and developed in her works due to the complicated transaction process However, because the workload at the department is quite large, she was not receiving official training from the bank and immediately work on the system It would risk her productivity and result, thus she decide to quit the job

Interviewees’ profiles:

2.2.2 Initial cause - effect map

The total number of employees leaving the company in the recent six month

is more than 1400 people As has been said, this kind of rate would effect on not only internally but also externally Internally, the operation cost and management cost would increase significantly In addition, with high turnover, employees’ motivation to work would decrease considerably since they have to take over the job and work harder to cover the leavers’ jobs Externally, the employer brand name would be badly marked by the concerning high turnover rate Candidates would be reluctant to apply for a job at an organization with real high turnover due to the risk

of internal struggle

Figure 5: Initial Cause – Effect Map

Combining the data collected from human resource management and the interview

results with the employees have leaving intention, it could be initially conclude that

the potential problems in human resources management is the ineffective training

program and uncompetitive salary for the employees

2.2.3 Theoretical framework regarding employee's turnover intention

According to Akyüz et al (2015), there are some factors that have significant impact on turnover intention in the organization, one of them is extensive training

As their belief and figures, banking sector is one of the fastest growing with the

advance in technology If the employees are provided with updated knowledge and

advanced experiences, they seemed to have less intention to leave their organization

as they felt invested in and more self-confidence to contribute and work in an

innovative environment Specifically, regarding the new graduates, their

expectations are often higher than what the organization can provide, thus lead to

low commitment due to the fact that they would want to find another chance to grow

Should the company provide sufficient and useful knowledge, they would feel more

satisfying and thus lengthen the time of working for the organization

Moreover, Heng-Yi Chen (2005) said that to increase intrinsic value of employees, the organization should organize training schemes along with clear performance appraisal and rewards to motivate, as well as create the greatest value commitment from the employees Training is long-term investment, the result might not be immediate in a day time However with clear objectives and goals, provided necessary working tools, employees normally inspired to work harder to reach their KPI after successful training courses

It is also proved by Chen that there is significant relationship between the employees’ commitment and their monthly salaries If the employees are satisfied with their income, they would not concern about it much and instead focus on their job Vice versa, should they did not what they think they deserve, employees tend to find another opportunity that suits their expectation The only factor that in fact could keep the employees staying longer with the organization is the job satisfaction Not all of the employees are working for money only; some of them, especially the junior ones, want to gain experiences and knowledge However, after a set period of time, the organization must have the tool to recognize the best performers to increase their income should their salaries are not quite high compared to other employees

Another factor that could impact on the decision to leave of employees is the management style Regarding the fact that VPBank is the fastest growing bank in the market, its demand in human resources is extremely high as well as the opportunity for potential leaders is open Hence, there are some inexperienced team leaders that cannot recognize, coach and show their employees the support needed Employees are not comfortable with the leadership style, thus they quit for another suitable mentor Khalid (2016) proved that leadership and employee retention has significant relation They connect through the mediation of job satisfaction, which means that the leadership style decides the working environment Employees can be motivated and satisfied with their jobs with rewards and recognition Hence in a way

of committed to the leader, they have the commitment with the organization as well

In another research regarding this matter, Mozammel (2016) also believed that

transformational leadership not only engages people within the organization but also increase the performance results and employees’ productivity Seeing that commercial banks are large organization with layer of managerial levels, the leaders play more crucial roles in retain and develop their employees The young leader and the leaders in general could be train in the “Train the trainers” program The course

is to provide them the method to guide and connect with their subordinates

2.2.4 Updated Cause - Effect Map

Regarding the data collected from internal sources, the survey result in the bank, coordinated with previous researches, there might be several potential problems that could lead to the high turnover rate of the bank Kshirsagar SR (2016) stated that training is the key factor for one’s career development When the employees cannot find a way to grow in the organization, they tend to figure out another opportunity that might give them the chance In commercial banking sector, the more active and digitize the employees are, the more chance they will get because of the fast movement in the 4.0 Technology Era (Navigos Search Report, 2018)

In 2017, Lin has stated that both Corporate Social Responsibility and ethical leadership significantly related to the turnover intention because they form the corporate values and characteristics Through behaviors of the leaders, employees might understand or misunderstand the corporation’s principles Mitonga-Monga et

al (2016) also confirmed that ethical leadership leads to affective, continuance and normative employees’ commitment

Coordinating information from the actual facts and data provided by human resources report, with the theories informed and internal survey results, the map in figure 6 would show more clearly on the symptoms of the company’s problem and potential problems

Figure 6: Updated Cause – Effect Map

2.3 Central problem identification

Regarding the current situation at VPBank with high turnover rate in junior levels, the central problem that lead to the high turnover intention might not be the

unethical leadership style because the employees leaving the company is randomly

nationwide and not in any specific branch or department Moreover, with very clear

mission and vision and long-term strategy from the board of directors and CEO, thus

said leadership style from mid-level managers can only impact on small group of

people

Considering the employees’ income factor, as in Mercer salary survey, VPBank’s salary range is ranked in the middle of the market, which means the

managers would not pay higher than most bank to buy the potential candidates

Instead, they focus on providing a happy workplace for their employees In addition,

the rewards for employees based on their performance results are quite competitive

in the market Should the employees get the targeted objectives, they would receive

bonus monthly and annually Hence, VPBank employees’ total income might even

exceed the average salary that other banks offer monthly On the other hand, if the employee cannot meet the target, their salary would be lower and thus be demotivated to work anymore In this case, the employee is allowed to leave the company due to his failure in achieving the KPIs

Aside from the eliminated potential problems above, the central problem is determined to be the ineffective training program within the organization Effective training program is a way to deliver the knowledge needed in the banking system to all employees With current training program, new employees would feel ignored and scared of the complicated systems and products, especially in retail banking Furthermore, the current employees without updated training about the systems and procedure would not be able to deliver their goals accordingly The less they know about the bank’s regulation, the higher risk they would get while working Considering the customers in retail banking varies from the workers to white collars,

it is best to prepare the employees about the product policy and other regulation

before moving on with every day job

II PROBLEM JUSTIFICATION

1 Definition of "Effective training"

Training has been used as term in human resource management for a long time The words itself represent its meanings “Effective” means successful in producing a desired or intended result (Oxford Dictionary) According to Bluckert’s cited in

2005, effective training also means “a process that enables learning and development

to occur and thus performance to improve”

2 Justify the existence of ineffective training program

2.1 Current training program at VPBank

Currently, the training program at VPBank is quite simple and lack of follow

up after training sessions There are two kind of training for employees at VPBank, which are orientation training for new employees and product training for the sales function in retail banking and SME banking

Orientation training, which occurred only once or twice a month, includes the general information for employees, cultures and internal working regulations as well

as the anti-money laundering training These training courses would have the tests for attendants at the end of the training day However, with more than 200 new employees coming at different time of every month, the orientation training does not work as its initial objective As a result, the new comers do not feel welcomed and they do not even want to attend the training after a month joining the company

Ms Huyen Trang in the in-depth interview said: “I join VPbank at the beginning of

the month, however I only join the orientation at the end of that month During that time, I have been trained from my buddy and superior, but I think it is not enough and the information is not quite clear and sufficient My job is in the transaction department, which I have to deal with customers every day with complicated procedure and documents In my case, I do not feel safe to work while not understanding banking’s regulation.”

Product training also take places twice per month for sales persons, which are inconvenient for newcomers because they would be expected to work and have their own targets on probation Especially for the personal banker or the credit approval officer, the product training must be organized continually and have follow-up tests 2-3 times per year to ensure the quality of the loans and reduce the risk of bad debt

for the bank Ms Do Minh Hang said “As a personal banker, I have a target to reach

on probation However, only after one month joining I have the product & process training After the training, I do not have enough time to complete my targets Even though I was still accepted to sign the official contract, I felt demotivated because

of my working results If the bank arrange more proper training, I believe that I could accomplish the KPI of this position In the waiting time for official training, I

am provided documents to read and follow However, since the bank has many rules applied differently to every product, the risk I have to face is quite high I would like

to be trained properly from the beginning to avoid any risk and also understand thoroughly about the bank and its products.”

According to these depth interview, it could be clearly seen that employees

at VPBank are not satisfied with the training program provided here However, it would need more information and data to prove that fact The following part would partly demonstrate the ineffectiveness in training program at VPBank

2.2 Quantitative research and results

Recognizing the importance of effective training, it need to be conducted an in-depth survey for leaving employees on their feedback on the reasons to leave and about training program at VPBank The informants for qualitative research should

be the employees who recently have leaving application The number of interviewees are six employees with intention to leave their current job at VPBank Using open questions with semi-structured interview guidelines, the research shows the three most potential problems are unethical leadership style, ineffective training program and uncompetitive monthly salary

After finding out these potential problems, the quantitative research is conducted with randomly picked around a hundred persons already announce their leaving Using likert-type survey questions, the central of the problem in human resources management at VPBank would be discovered

According to the survey result, 83 percent of surveyed persons are at the age of under

30 and 68 percent of them only have less than one year working for VPBank With the salary range from 5 – 10 million VND per month, 24 percent of surveyed employees found it unsatisfying in their salary and bonus On the other hand, around

38 percent of this leaving group are because of training and development factors More specifically, 70 percent of this group assess the training and development at VPBank from very bad to bad, which is fairly high compare to 58 percent of them assess the leadership style and around 65-67 percent of them assess the salary/bonus and benefits to be neutral

In term of leadership style, some of the surveyed employees (less than 10 percent) found their boss to be unfair and not supportive The others assess their leader quite good or neutrally Similarly, 45 percent of this group feel neutral with their salary

and bonus policy, as well as more than 30 percent of them feel quite satisfy with their salary

The result for training and development at VPBank is not that potentially good 55 percent of this leaving group comment on the clearness of orientation training from the beginning 23-37% of them do not agree with the effectiveness of product training and soft-skills training even though most of them agree that the locations, the trainers and the time for training are easy to access and attend

The detailed results of the quantitative survey are provided in the support information part for more references

To sum up, in keeping with the results of qualitative and quantitative research, the central problem of human resource management at VPBank would be the ineffective training, especially for the junior levels Since most of the employees are young generation, the human resource managers might have to find the potential solution

to retain this large group of employees

3 Justify the importance of effective training program

3.1 Decrease productivity

As stated by Punia (2011), effective training leads to higher productivity Vice versa,

it could lower the productivity should the training program not necessary and given unsuitable information Employees would find it a waste of their times if the training sessions are not provided the information or knowledge that they expect Moreover, they could also feel lack of motivation to work after the training courses and in general can lead to the working inefficiency In the case of VPBank, with ineffective training program, the employees cannot catch up with the product package provided for customers, thus cannot introduce to their customers the suitable products that the customers need It would lead to the fact that they cannot close the deal with customers, then cannot reach the objectives and KPI for each product since every sales person has around 5-10 different KPI for different products For example, in retail banking, there are eight separate KPIs for each products for a sale person If the sales person do not acknowledge all of the advantages and disadvantage of the

products, as well as theirs functionalities, it must be extremely hard for them to sell anything to the customers

3.2 Waste of money and resources

It is crystal clear that training costs the organization a lot of money If the training program is not effective, it could lead to more money wasted considering the operation cost, the time that employees spending to learn, etc (Punia, 2011) At VPBank, every training course need at least 20 - 30 attendees The cost to organize

a training is around 5 million VND per session, including the operation cost, training fee for the coaches, designing documents, tea break and other facilities needed (more reference in appendix 2) It would not only cost the company, but also cost the employees the time to generate more profit for the bank Should the training session cannot deliver any valuable information to the attendees, it would be also a waste of effort of all participants in the training program

3.3 Employees become the biggest liability

As referenced from Punia (2011), without the right training, Bartram and Gibson (2000) believed that employees can become the company’s liability It can directly applied to the banking sector Financial products are complicated and legal related Should the creditors do not understand the policy, they could be blamed for fraud that they do not even know about Moreover, with around 200 newcomers every month, if the orientation and product training as well as process/system training are not well organized and delivered, the newcomers could not follow up with the bank regulations and thus lead to more problems for the bank rather than generating more profits

4 Identify potential causes of ineffective training

According to Ajmer (2011), with the lack of suitable method of training or coaching, the trainees would find it hard to follow up with the training program or demotivated during and after trainings Hence, the training result would decrease significantly with the ignorance of the mentor/ the coach At VPBank, in order to save cost, managers are used to be invited to be the trainers However, some of them

are excellence in reaching the target, but the training technique is one of the most important skills that they might be lack of It leads to the fact that many employees attending the training courses could not grasp all of the information needed

Ajmer also confirmed on the importance of investing capital and develop training program In banking systems, there are numerous procedures and products,

as well as specific skillsets that need to train for employees to perform the job properly It is a full-circle training process, not just a course or a program It can especially applied to VPBank circumstances because as targeting the mass customers in the market, there are lots of products inside a product segment in retail banking and SME banking With the new systems of auto approval or central-approval, the personal bankers need to understand not only how to sell the product, but also how to operate the documents on the system for final credit approval

There is another cause that might lead to ineffective training, which is choosing the wrong type of training Before planning any training program/ course,

it should be carried out the Training Needs Analysis (Ajmer, 2011); or else the result

of the training course would be wasted, the employees would not have the right skills that they want to gain before the training As been said, training program should be planned as a full-circle courses with different type of trainings such as online training, direct training, interactive training, or one-on-one mentoring/coaching, etc The human resources management would have to analyze which type of training should be deliver for better training results Each method should be applied in different situations for different type of attendees

5 Final Cause - Effect Map

Summing up, there could be significant relationship between ineffective training and the leaving intention at VPBank, the organization might be impacted severely with the consequences of ineffective training as demonstrated in figure 7

Figure 7: Final Cause – Effect Map

III SUGGESTED SOLUTIONS

As the objective of the five year period (2017 – 2022) is sustainable development, retaining the capable workforce is crucial at VPBank In order to motivate the young generation as junior level working at the bank, the training program must be revised and rebuild to be more suitable with the new orientation of the bank

1 Training Center must be restructured

As the Training Center has been established, the current structure includes the Head of Training Center with two separate functions which are trainers and training supporters (supporting administrative and organizing part) The training programs are provided as business requirement

The suggested new structure would be as below:

Each function would take different responsibility in the training process for more effective training and development:

 The training business partner will work directly with head of business unit and managers to find out about their employees’ needs of training As stated by Narasimhan (…), that is professional needs which related to different skills or knowledge that require of employees across various functions For example, for operation division with various processes and systems, the employees must be trained regularly to refresh their knowledge and update with new products and systems More specifically, the customer service representative (CSR) who would process 50 - 80 of transactions everyday have to ensure all transactions are legal and up to the bank’s regulations Only supervisors and transaction managers could verify the training needs of their subordinates to ensure their efficiency The training business partner would coordinate with these managers

to understand about their training needs, and propose potential solutions The training program for CSR could be organized every quarter for newcomers, as well as current employees with clear objectives and online tests at the end of every training; only trainees who pass could work on the system, or they have learn again and retake the tests

Furthermore, Narasimhan also mentioned organization needs This is about the organization’s directions and business unit’s objectives Depend on the

Head of Training Center

Training

Business Partner

Program Designer Trainers

Training suporters and organizers

characteristic of the business unit, the training business partner would have to consult on the training program that match the organization needs with professional needs

The basic formula to calculate the need is as below:

Need = Standard performance - Actual performance

 After finalizing the suitable training needs with business unit manager, the training business partner would work with program designer to design the layout and detailed suitable programs for employees There are only two types of training courses at VPBank which are orientation for new employees, product and process training Another type of training needs to be added to the whole program is soft-skills/ required competency training Based on actual needs, the training courses would be designed and can be coordinate to more than one function at a times to save time and cost According to Narasimhan, the designers are not only in charge of designing proper training documents, but also create the methods of measuring the effectiveness and result of the training course He said that should the training program have clear objectives and methods to test the result, the effectiveness of the training course would increase significantly

 Last but not least, the training organizers arrange the training programs accordingly and coordinate with the trainers for better training results The trainers can be professional trainers within the bank, or internal managers who have training skills, or external trainers However, it would be better to use internal source to save the training cost Moreover, the internal trainers who have depth understanding of company culture and process, would provide fruitful information to the employees, especially junior ones who lack of experience The organizers (who also works as facilitators of the training sessions) are important

to create a successful training program They would be in charge of all tasks related including the locations, documents & stationery, catering & other facilities needed such as internet access, parking spots, air-conditioning, etc

 The proposed cost for the new structure would be as following table The number

of persons increase slightly from 8 persons to 10 persons Moreover, regarding the new & more complicated responsibilities of these positions, the cost to hire increase slightly from 1.38 billion to 2.21 billion per year

Personnel Details HR Cost per

year (VND)

Previous structure 8 persons

3 training business partner

2 designers

2 professional trainers

2 supporters

2,210,000,000

 Benefits of new structure:

o People working in the training center have clearer objectives and responsibilities

o This structure provide the end-to-end training process oriented to service for the best of business unit’s interest

o Actively design training program according to the organization needs, instead of using the same old documents and methods

 Disadvantages of new structure:

o Difficulty in transformation of working culture with the new structure

o Higher cost of operation/ human resources

2 Digitalizing training programs

The most important access to effective training is to understand the need of organization and employees However, understanding is not enough The bank

should invest more on training for employees in general, junior employees’ specifically, to enhance employee’s performance and organizational effectiveness and (Singh&Paliwal, 2014)

Considering the number of new employees who needs training every month (around

200 persons for orientation training only), not included the current employees who needs to revise the bank regulations and professional information, human resource managers and training center head should provide new method for effective and immediate training E-learning – digitalizing training programs would be an effective way In 2004, Comacchio et al have confirmed that the adoption of e-learning is a certain and a must should the bank wants to have competitive advantage, as well as the adoption would be undertaken whether it impact on the training results or not In case of training program at VPBank, due to the high demand in training for junior levels, the best way is to utilize the technology advancement at the bank It might be costly at first, but it would also enhance the bank’s reputation in the whole market

 The proposed cost to function the E-learning system:

o The cost of new system: 1.6 billion VND

o The cost of operation:

 Documents design: included in the fee for the new system

 Test design: free upload on the system (using the available question bank, no need to create new test)

 Payment for trainers: not needed anymore

 Other fees for training facilities: not needed anymore

It could clearly be seen that with the operation of E-learning, it would save the bank various added administrative costs such as facilities, document printings, etc Especially the E-learning system provide the timely training sessions for individuals Employees do not have to wait for training anymore, instead they can study and do the test online to complete compulsory training programs