Research pick: Retaining bankers - "Successful employee retention practices: characteristics found in Danish and Icelandic banks"

A recent in-depth examination of employee retention within the banking sector has revealed various actionable strategies that might be used to address this persistent challenge. The study, published in the International Journal of Business Information Systems, emphasizes the imperative of a nuanced approach to understanding the factors influencing retention rates, particularly at the specialist level.

The research by Unnar Theodorsson, Svala Gudmundsdottir, and Thorhallur Gudlaugsson of the University of Iceland in Reykjavik, shows that there are subtle variations between the banking landscapes of Iceland and Denmark.

The team explains how the findings underscore the need to undertake comprehensive talent management and strategic human capital to redress the shortages of specialists in the banking sector. This might entail a sustained commitment to investment in employees, such as improved continued professional development, active engagement in educational initiatives, inclusive communication practices, strategic recognition, and better promotion structures. Moreover, it would involve a more meticulous approach to managerial recruitment practices, focusing on the identification and cultivation of managerial talent.

One of the big challenges highlighted in the research is the banking sector’s ongoing struggle to cultivate an environment conducive to retaining specialists. To surmount this, the study recommends sustained efforts in workforce planning, development, and financing. It suggests placing a heightened emphasis on leadership capabilities among those managers at the mid-level of the corporate hierarchy, a better approach to the recognition and acknowledgement of the efforts of employees, as well as fostering an improved working environment through inclusive and constructive communication.

The study also pinpoints key policy issues that are pivotal for successful retention initiatives, such as the establishment of transparent career progression plans, fair promotional procedures, a well-defined system for filling posts and carrying out employee transfers, as well as the empowerment of local management for effective governance. If these various insights are banked by the industry, then the researchers propose that ongoing studies be carried out to assess their long-term effects and to identify how they might be improved if problems come to light.

Theodorsson, U., Gudmundsdottir, S. and Gudlaugsson, T. (2023) ‘Successful employee retention practices: characteristics found in Danish and Icelandic banks’, Int. J. Business Information Systems, Vol. 44, No. 2, pp.161–179.