Technological Change and Human Capital Transformation in the Banking Sector in Thailand

Masterarbeit, Fachbereich International and Development Economics, 81 Seiten, engl.

Summary:

Workforce transformation is nothing new. Yet, several studies stand highly theoretically or quantitatively; and there is a lack of research in this area, particularly the empirical study on “how” banks transform their workforce. This research, therefore, aims to explore the technological workforce transformation in Thailand’s major banks through the perspectives of bank management and employees. The main conclusions are summarized as follows:

Although the technological disruption causes the displacement for the low-/mid-skilled employees in Thai banking sector, but it does not mean an instant unemployment. Instead, the case banks have strategies to combat this upcoming threat. Based on Bughin, et al.’s (2018) workforce transformation strategies, all case banks are building their future workforce for the disruption by (re)training all employees to have transferable meta-skills (i.e. adaptability, communication, continuous learning, creativity, leadership, and teaching & training others). In this process, regular in-class training courses, 24/7 AI-based online learning platform, skill-assessment program, skill-development office-hours are provided to employees based on their interests. Internal mobility to other job functions to learn sophisticated skills (SCB’s Teller-to-Seller program, for instance) is also an equally important strategy that case banks are practicing. By that, the case banks provide assurance of career growth and job security to the employees who are willing to adapt along with the banks. Besides, hiring and retaining tech talents are also an important path in building the future digital workforce. Contracting and releasing strategies are not solutions toward sustainable digital transformation, as viewed by bank management. The findings of the present case study contrast Bughin, et al.’s (2018)’s prediction on banking transformation, and verify that the unique organizational setting, cultures and norms, and socio-economic settings can lead to different workforce transformation implementations.

Using fsQCA to analyze perspectives from employees in Thailand’s major banks, the findings are formed postulating “Skill Significance” and “Supportive Working Environment as influential concepts in relation to the satisfaction of bank employees. Based on the analysis, no single condition aforementioned alone is necessary nor sufficient for achieving “Employee Satisfaction”. Instead, the configurations toward “Employee Satisfaction” are derived from (1) the combination of “Skill Significance” and “No Career Growth”; (2) the combination of “No Career Growth” and “Supportive Working Environment”; and (3) the combination of “Skill Significance” and “Supportive Working Environment”.

In other words, satisfaction among bank employees can exist when their skill sets are significant that they can create productive values. By that, skill significance can be attainable through skill improvement and job rotation programs, whilst values creation can come from supportive working environment and supports received from the supervisors and colleges. In the author’s view, these fsQCA results deliver out-of-the-box values on top of existing from Hackman and Oldham (1976), especially given the limited literature discovering the combination of such factors. Result also poses an interesting question on why Thai bank employees view that career growth factor is not the condition to their satisfaction. Additionally, fsQCA is a promising tool for producing generalizations of the importance of specific contextuality across several fields of qualitative research.

As technologies advance forward exponentially, working skills set for specific task and employment will still change again and again. According to the results from content analysis, in the author’s opinion, present case banks are moving in the right direction toward the successful workforce transformation because the banks are able to foresee the in-demand future skills set and implement it with their employees via retraining and redeploying programs. For this, it is therefore safe to evaluate that transformation programs of the case banks meet the requirements of shifting skills in the banking sector with regard to technological change. Besides skills improvement programs, fsQCA results suggest that condition “Supportive Working Environment” is recommended to be taken into consideration and incorporated into the transformation programs as it significantly contributes to employee satisfaction. Suggestively, skill-assessment and self- awareness and motivation, however, must be installed to ensure that the employees develop themselves properly and move away from jobs susceptible to automation.

To the author’s knowledge, this is the first study to explore workforce transformation program in the Thai banking sector from the perspectives of management and employees. Obviously, this case study may not lead to generalization for all companies across sectors; yet, the results of this study provide supplement knowledge to existing literature with the empirical evidence from workforce transformation programs in Thai major banks.

As this research is exploratory, future research should focus on studying different organizations in Thailand or ASEAN to provide further knowledge on workforce transformation strategies and implementation, particularly the organizations which have not yet design strategies or implement them into practice. This portrays the possible differences in overall corporate workforce transformation strategy. Furthermore, 46 comparative studies focusing on the workforce transformation programs across industries can provide a comprehensive picture of the digital workforce transformation. Finally, studies focusing on SMEs’ workforce transformation programs can be meaningful in exploring differences regarding the impact of the level of organizational complexity and structure.