European Microfinance Week 2021

This interactive working session was organised by the e-MFP Human Resources Action Group (AG) to discuss more depth the ten human resources topics identified as most relevant for the financial inclusion sector. The ten human resource practices that support MFI performance are the following:

1. The most senior HR representative reports directly to the Board of Directors, CEO or most senior management executive
2. HRD strategy is reviewed annually to ensure its alignment with business strategy
3. Recruitment and selection procedures are clearly documented and adhered to
4. New hires are oriented to relevant policies and procedures, as well as the organization’s vision and values
5. The organization segments its human resources and defines HRD strategy for each key segment
6. The rate of turnover and the reasons for employee exit are analysed at least once per year, disaggregated by segment
7. Managers have clear HRD targets and receive training on how to assess skills and provide feedback
8. Employees are involved in setting their performance targets, gauging the necessity of L&D measures to support their achievement of those target, and evaluating their performance against those targets
9. Employee satisfaction is measured, and the results are shared annually
10. A formal grievance system enables employees/agents to raise workplace concerns in a confidential manner and tracks their resolution

The first question that was discussed with the participants related to ‘Which of the 10 HR practices have you implemented, audited, supported’? Two participants shared that they are still implementing practice no. 5 (The organization segments its human resources and defines HRD strategy for each key segment) and some encounter it as a challenge. Regarding practice no. 6 (The rate of turnover and the reasons for employee exit are analysed at least once per year, disaggregated by segment) is done on a more rolling, quarterly basis by one of the participants. Ewa BANKOWSKA contributed by sharing that MFC focused over the last months to assess and implement digital skills to drive the required digital transformation.

On the question ‘Where do you see challenges in the implementation, auditing, in the support of these HR practices?’, the participants responded that it is difficult to find continuity in learning and development as a vital part of every organisation. Every time it has to be justified before it can be financially covered. At the same time, due to technologies, some cost reduction have been made. Another challenge is the reduced productivity of personnel due to community lockdowns and the intensity of administrative workload around HR management. It has helped though that certain HR functions have been automated over time.

A final challenge mentioned was the high turnover rate especially among the younger generation. Interestingly, it was recommended that MFI’s to adjust to this fact and as a response become more agile instead of keep on trying to keep young people on board. With higher employee turnover rates organisations are still able to succeed, perform well and reach targets, while bringing the recruitment costs down.

The third question discussed was ‘Which of the 10 practices are crucial for the current situation (shaped by the Covid-19 crisis) in microfinance and why? How have you been implementing/supporting this specific practice?’. For one organisation this appeared to be Practice no. 2 (HRD strategy is reviewed annually to ensure its alignment with business strategy), because there is a need to review more often than on annual basis to keep better engaged with employees. For another organisation Practice no. 9 is key in the current situation and to work on employee satisfaction to control staff turnover. Employee satisfaction is now measured every quarter and followed up by direct action plans. This has helped the organisation.

Abbad EL-RAYYES of ADG International concluded the working session saying that HR management should be part of a continuous cycle. ADG itself uses the Talent management life cycle which is also explained in the pdf report for the practices.