Maharashtra, the second-largest state in India, faces significant challenges in its workforce development, as highlighted by the National Skill Development Corporation (NSDC). Concerns include a mismatch between educational curriculum and industry demands, inadequate emphasis on soft skills, low motivation among youth, and a lack of skilled manpower in certain districts. The NSDC predicts a growing demand for skilled workers in sectors like construction, retail, and finance over the next decade. The specific case of Aurangabad underscores the need for targeted efforts to enhance the skills of the local workforce, as indicated by the district's average entry-level skills and 'good' lateral recruits. Addressing these challenges requires collaborative efforts between educational institutions, industry stakeholders, and government bodies to align curricula, emphasize soft skills, and motivate and train youth for skilled employment, ultimately contributing to the state's economic development.

Problem Statement

As a researcher, I've identified a significant gap in the available literature regarding skill shortages and gaps in various sectors across Maharashtra's districts. This observation has motivated my decision to conduct a thorough analytical study, specifically honing in on the Financial Service Sector in Aurangabad City. With a keen awareness of this research gap, my objective is to explore the specific skill challenges within this sector in Aurangabad. Through a comprehensive examination, I aim to offer valuable insights that can inform targeted strategies to address skill shortages, enhance workforce capabilities, and contribute to the overall economic development of the region.

Title of the Thesis

“Critical Analysis Of Skill Shortages &Its Effect On Financial Service Sector : A Comparative Study Of Selected Commercial Banks & Insurance Companies In Aurangabad City”

Rationale for the choice of the topic

The Rationale for choosing ‘Financial Service Sector’

The Rationale for Comparing Banks and Insurance Companies

The rationale for selecting ‘Aurangabad City'

Financial Sector is the sector which grows simultaneously with the development of any other sector. Yet it is difficult for financial sector outsourcing its services, citing the high security factor. Hence it becomes crucial to conduct a detailed skill related study about this sector.

The Financial Service Sector includes commercial banks, insurance companies, non-banking financial companies, mutual funds, pension funds, co-operatives and other minor financial institutes.

Banks and Insurance sector are two major Sub-sectors of the Financial Service Sector. Hence, research in these two sectors will reflect the clear picture of the whole Financial Service Sector.

Skill shortages may prevail in particular geographic areas, but not in others. Hence, for the detailed analysis of skill shortages, geographic area should be selected. Without selecting a particular location, it is impossible to find out whether the relocation of manpower is a possible reason or solution to the skill shortages.

Aurangabad is one of the leading districts of Maharashtra state. It has been included in the smart city projects in India. Hence it has become the center of attraction for many industries in various sectors. Aurangabad represents the Marathwada region of Maharashtra State, hence any industrial scenario of the district reflects the whole region.

Literature Review

A thematic literature review was conducted using Nvivo. Every topic was explored in detail like Skills, skill shortages, Indicators of Skill Shortages, Determinants of Skill Shortages, Effects of Skill Shortages, Strategies & HR challenges for Skill Shortages, Mitigation of Skill Shortages, Measurement of Skill Shortages

• After an extensive literature review, 5 concrete objectives and 9 research questions were formulated along with 2 hypothesis to test.

• This helped in creating a clear conceptual framework to carry out the whole research.

Objectives and Research Questions of the Study

Objective 1 : To identify and compare the Indicators of Skill Shortages in Banks and Insurance Companies of Financial Service Sector.

Objective 2 : To understand and compare the determinants of skill shortages in Banks and Insurance Companies of Financial Service Sector.

Objective 3 : To study and compare the types and extent of skill shortages in Banks and Insurance Companies of Financial Service Sector.

Research Question 1 : What skills are required in Banks and Insurance Companies of Financial Service Sector ?

Research Question 2 : What are the Indicators of Skill Shortages in Banks and Insurance Companies of Financial Service Sector ?

Research Question 3 : Does the skill shortage exist in Banks and Insurance Companies of Financial Service Sector ?

Research Question 4 : What are the determinants of skill shortages in Banks and Insurance Companies of Financial Service Sector ?

Research Question 5 : What is the type of skill shortage in Banks and Insurance Companies of Financial Service Sector ?

Research Question 6 : To what extent does the skill shortage exist in Banks and Insurance Companies of Financial Service Sector ?

Objective 4 : To analyze and compare the effects of skill shortages on the performance and functioning of the organization in Banks and Insurance Companies of Financial Service Sector.

Research Question 7 : Does the skill shortage create negative impact on the performance of the Banks and Insurance Companies of Financial Service Sector ?

Research Question 8 : What are the effects of skill shortages on the functioning of Banks and Insurance Companies of Financial Service Sector ?

Objective 5 : To understand and compare the strategies adopted by the organizations to mitigate the skill shortages in Banks and Insurance Companies of Financial Service Sector

Research Question 9 : Which kind of short term and long term strategies are being adopted by the Banks and Insurance Companies to mitigate the skill shortages ?

Hypothesis 1

Hypotheses

H0 – There is no significant difference between the existence of skills shortages in Banks and Insurance Companies of Financial Service Sector.

H1 – There is significant difference between the existence of skills shortages in Banks and Insurance Companies of Financial Service Sector.

Hypothesis 2

H0 – There is no significant difference between the extents of negative impact of Skill Shortages on the performance of Banks and Insurance Companies of Financial Service Sector.

H2– There is significant difference between the extents of negative impact of Skill Shortages on the performance of Banks and Insurance Companies of Financial Service Sector.

Skill shortages Analysis - Conceptual Framework

Scope of the Study

1 - Conceptual Scope

1.A] Skills: In this study, the term “Skills” refers to the Soft Skills as well as the Hard Skills.

It has been observed in the extensive literature review that skill shortage is the ‘unavailability of the required skilled manpower in external market’ whereas ‘skill gap is the gap between the skills of an employee and the skills he or she should actually hold to perform his or her job efficiently’. Many times, employers get confused between skill gaps and skill shortages. Because of this factor, an ideal study of skill shortages would combine both economic indicator and survey methods.

For the study, the Skill shortages term has been considered as the combination of both the concepts viz. skill shortages and skill gap.

Operational Definition of “Skill Shortages”

“The Skill Shortages is a situation in which the employer fails to get manpower with the required skills set from the external labor market and/or within the organization.”

2 - Sector Scope

Branches of the selected Commercial Banks & Insurance Companies have been taken into consideration to carry out the research.

The study duration was 2018-2019 during which the data were collected data. In 2018, the data collection was started and it continued till 2019.

1. Researcher faced a dearth of previous research studies related to skill shortages, especially in the Financial Service Sector.

2. No updated government data or reports were found related to human resource in Aurangabad district.

3. Under the study, the recruitment managers have not been taken as respondents, hence details regarding recruitment difficulties and hard to fill vacancies could not be acquired.

4. Researcher tried to reach the population for the study, but because of the tight schedule of the respondents, they could not fill the questionnaire.

5. As the research is based mainly on the responses of the respondents through the designed questionnaire, hence the limitations related to the questionnaire technique may be associated with this study also.

1.B] Operational Definition of the “Skill Shortages” for the Study:

3 - Geographical Scope

Period of Study

Limitations of Study

The study has been carried out in the Aurangabad city area.

Significance of the study for the organizations of Financial service sector

Significance of the study for the Educational Institutes

Significance of the study for the Job Seekers and Current Employees

Significance of the study for the Government

Skills are directly associated with the employment opportunity of an individual. And at the same time, skills are the only things which employers look for in their employees. Hence skill shortage may affect individual, employers, industry and a society as a whole. Hence Skill shortage research may benefit to job seekers, employers, educational institutes and to some extent government also.

• Through this research, employers may express their demands and “related to skills” to the job seekers and to the educational institutes as well.

• From this study, the educational institutes may get a big picture as well as a detailed view of the skill shortage scenario of the Financial Service Sector.

• It may help them to design courses and curriculum according to the demands of the sector.

• It may also help educational institutes to evaluate the skills of their students according to the need of the Financial Service Sector.

• The Skill shortage in the labor market is considered to be a boon for job seekers in many ways. It increases their opportunities to get employed.

• This study may benefit job seekers and current employees to get enough information about skills in-demand especially in the Financial Service Sector.

• The comparison between Banks and Insurance Companies may help job seekers to choose an appropriate sector to apply.With the skill shortage details in hand, job seekers and current employees may demand a fair compensation from their employers.

• Same as the employers, this research may present the big picture as well as a detailed scenario of skill shortages in Financial Service Sector to the Govt. as well.

• The points covered in research like indicators and determinants of skill shortages and the effects of this on financial service sector may help government to think of proper interventions to mitigate skill shortages.

Significance of the Study

Questionnaire Validity and Reliability

Validity

The Construct and Content Validity of the questionnaire has been assured by extensive literature review and guidance from mentor, subject area experts and managers of Banks and Insurance Companies.

Sampling Methodology

• When Financial Service Sector is considered as population for the study, then there are four sub-sectors which are present in the Financial Service Sector.

• These sub-sectors are (1) Public Sector Banks (2) Private Sector Banks (3) Public Sector Insurance Companies (4) Private Sector Insurance Companies.

• Each sub-sector is considered as stratum of the population.

• Hence Proportionate Stratified Random Sampling Method has been adopted for the study.

• In Proportionate Stratified Random Sampling, the size sample of each stratum is proportionate to the population size of that stratum.

Sample Size

Reliability

The reliability of the questionnaire has been measured by pilot study and Cronbach’s alpha tests to see if multiple-question Likert scale questionnaire is reliable.

• The data collected for the study have been processed and analyzed with the help of MS Excel and SPSS [Statistical Package for Social Sciences] software.

• 39 Tables and 68 graphs have been formulated for expressive representation and interpretation of the facts and figures.

• The statistical tools like percentage analysis, cross tabulations are used.

• For comparison between Banks and Insurance Companies and to prove their statistical significance, Mann Whitney U Test has been applied.

• Further post-hoc Mann Whitney U tests have been done to compare among Public Sector Banks, Private Sector Banks, Public Sector Insurance Companies, and Private Sector Insurance Companies.

• Kruskal Wallis Test has also been used to compare all the four sub-sectors of Financial Service Sector.

Framework and Tools for Data Analysis

The whole analysis is categorized into 7 sections (1) General Profile of the Respondents (2) Identification of Skill Shortages and its indicators in Financial Service Sector (3) Identification of determinants of Skill shortages in Financial Service Sector (4) Analysis of effects of Skill Shortages on performance and functioning of the organizations in Financial Service Sector (5) Investigation of Short term and Long term strategies of the organizations to overcome the Skill Shortages (6) Exploration of the Skill Demand Details (7) Hypotheses Testing

Data Collection & Data Analysis

Section I: General Profile of the Respondents

This section of the analysis states the general profile of the respondents. The data is tabulated using the frequency distribution and percentage analysis method. Appropriate graphs are used to represent the data.

Section II: Identification of Skill Shortages and its Indicators in Financial Service Sector

This section attempts to identify the Indicators of the skills Shortages. In this section, A post hoc comparison has been done to comprehend the situation in better way viz. Comparison between Banks & Insurance Companies, Comparison within Banking Industry- Public Sector & Private Sector, Comparison within Insurance Industry- Public Sector & Private Sector, Comparison within Public Sector – Banks & Insurance Companies, Comparison within Private Sector – Banks & Insurance Companies.

Section III: Identification of Determinants of Skill shortages in Financial Service Sector

This section focuses on identification of the Determinants of the skills Shortages in Financial Service Sector. In this section, five comparisons have been done to understand the situation clearly viz. Comparison between Banks & Insurance Companies, Comparison within Banking Industry- Public Sector & Private Sector, Comparison within Insurance Industry- Public Sector & Private Sector, Comparison within Public Sector – Banks & Insurance Companies, Comparison within Private Sector – Banks & Insurance Companies.

Section IV: Analysis of effects of Skill Shortages on performance and functioning of the organizations in Financial Service Sector

This section is further divided into two Sub-sections Part A and Part B.

Part A focuses on the effects of Skill Shortages on performance of the organization. To study the effects in detail the post hoc comparison has been done.

Part B of Section IV deals with the effects of Skill Shortages on functioning of the organizations. Post hoc comparison has been conducted to understand the situation better.

Section V: Investigation of Short term and Long term strategies of the organizations to overcome the Skill Shortages

This section is categorized into three parts viz. Part A, Part B and Part C.

Part A examines the Short term Strategies adopted by the organizations to handle the problems of Skill Shortages on immediate basis. A post hoc comparison of sub-sectors of Financial Service Sector represents the situation in detail.

Part B observes the Long term Strategies of the Financial Service Sector for dealing with the issues related with Skill Shortages. The details are tried to observe by doing post hoc comparison among sub-sectors of the Financial Service Sector.

Part C tries to identify the key mitigating agent to eradicate the Skill Shortages from Financial Service Sector.

Section VI: Exploration of the Skill Demand Details

This section is divided into two parts. viz. Part A and Part B. The Part A deals with the enquiry about the various ways to represent the skills.

Part B identifies the important skills required in Financial Service Sector. The demand details of the required skills set have been magnified in this part.

Section VII: Hypotheses Testing

This section is dedicated to the Testing of Hypotheses using appropriate statistical tests.

Tables & Graphs

Data Collection

• Primary as well as secondary data have been used to conduct the research.

• The primary data have been collected through the survey method. Each branch of bank and insurance company operates independently, hence the branches are made the unit of analysis for the study. Branch managers were asked for the responses for their respective branches.

• A structured questionnaire was used to collect the data from the branch managers.

• The secondary data was collected through Govt. reports and websites, research papers, Newspaper and magazine articles, books and other published materials.

Data Analysis

39 Tables and 68 graphs have been formulated for expressive representation and interpretation of the facts and figures.

Factors (Variables) for Questionnaire and Analysis under Study

1 ] - Banks and Insurance Companies

1. Banks

2. Insurance Companies

3. Public Sector Banks

4. Private Sector Banks

5. Public Sector Insurance Companies

6. Private Sector Insurance Companies

2 ] - Indicators

1. Supply of professionals is not as per the required quality in terms of skills & experience

2. It is difficult to get entry level professionals as per requirements

3. It is difficult to get Experienced / Higher Level professionals as per requirements

4. For professionals, demand is high and supply is less

5. Higher investments in Recruitment & Selection procedures by the organization

6. Higher investments in training programs by the organization

7. Ever had to hire professionals with lower than required standards of qualification / skills / experience for any vacancy

8. Mostly work overtime to meet the objectives

9. Attrition rate is high in Entry Level professionals

10. Attrition rate is high in Senior Professionals

11. Reluctance of professionals for relocating to Aurangabad is a concerning factor

3 ] - Determinants

3.5- Sector Specific Factors

1. Change in industry structure

2. Specialized and specific knowledge & skills for every job role

3. Employee poaching within sector like insurance/NBFI etc.

4. Employee poaching by other industries (other than financial sector)

5. Not enough people interested in Financial Sector

6. Need of new skills due to changes in external environment

7. Less scope for innovation, which is failing to attract youth

8. Slow Pace of upgrading skills of current employees

9. Slow Pace of upgrading skills of external workforce supply

3.1- Macro-Economic Factors

1. Rapid technological change

2. Globalization

3. National economy

4. Changes in customer orientations

5. Increased competition

6. Evolving Regulatory framework / legal compliance

3.2- Mobility

1. Migration to metro cities / Tier 1 cities

2. Reluctance to move to non-metro cities or Tier 2 / Tier 3 cities

3.3- Education System

1. Dysfunctional education system

2. Lower standards of formal qualifications

3. Difficulties in finding experienced employees

4. Skills mismatch in the labor market

3.4- Internal Training / HR Issues

1. Because of retirement of workforce

2. Time Consuming Recruitment & Selection procedure

3. Training & Development policies of organization

4. Difficulties in skill upgrading with the pace of technological changes

5. Reluctance to change by employees

4 ] - Skill Shortage Impact

4.1- On the Performance of Organizations

1. Negative impact

2. Immediate negative impact

3. Long term negative impact

4. Overt negative impact

5. Covert negative impact

4.2- On the Functioning of the Organizations

1. Adjusting hard to meet the objectives

2. Reduced productivity

3. Reduced ability to serve clients

4. delivering late on our services

5. Increased error rates

6. Reduced competitiveness

7. Reduced innovation and creativity

8. Difficulty in succession planning

9. Difficulty in implementing strategic HRM policies

10. Increased employee turnover

11. Higher compensation costs

12. Lower employee engagement / Morale

6 ] - Skills Shortages Mitigating Agents

5.1- Short Term Strategies

1. Longer working hours

2. Job Enlargement or Job Rotations

3. Inter-branch deputation / Transfers

5.2- Long Term Strategies

1. Creation of new veteran hiring programs

2. Focusing on Retention strategies

3. Employee training and development programs

4. Higher compensation

5. Higher Relocating allowance

6. Brand imaging

7. Better Work Life Balance (WLB)

8. Tie ups with reputed educational institutes

9. Outsourcing of certain functions

5 ] - Strategies Adopted by Organizations

1. Employers

2. Educational Institutes

3. Government

4. Job seekers / existing employees themselves

7 ] - Representation of skills in financial service sector

1. Basic educational qualifications

2. Different add-on Certificates

3. Experience

4. Rely on Personal interviews

(3a) in terms of years

(3b) of working in a particular functional area

(3c) of working in high performing organizations

8 ] - Skills in-demand in Financial Service Sector

Hard Skills

1) Quantifiable skills by earning degrees & certificates

2) Well versed with the financial language

3) Complex Data Analysis and interpretation

4) Product Knowledge

5) Market & Industry awareness

6) Regulatory awareness & implementation

7) Statistics & Numeracy

Technological Skills

8) Proficiency in MS Office Suite especially in Excel

9) Familiarity with Industry specific software e g. ERP

10) Data analytics

11) Data mining & modeling

12) Business intelligence software

Soft Skills

1) Written Communication skills within the organization

2) Written Communication skills outside the organization

3) Team work & collaboration

4) Creative thinking

5) Decision Making

6) Problem solving using skills and scientific way

7) Analytical skills

8) Customer service & Client Relationship

9) Hunger to Learn & learning aptitude

10) English proficiency – writing

11) English proficiency – speaking

12) Organization & Time Management

13) Embracing diversity of customers, clients and coworkers

Leadership Skills

14) Coaching

15) Management

16) Strategic thinking

17) Project management

18) Business acumen

Emotional Intelligence

19) Commitment

20) Self-Discipline

21) Self-Motivated

22) Empathy

23) Self-Esteem

24) EQ skills

• Using primary and secondary data, it is found that there are 5 major categories of skills viz. (1) Hard Skills (2)Technological Skills (3) Soft Skills (4)Leadership Skills; and (5)Emotional Intelligence. Under these categories there are around 36 skills. These skills are rated highly in-demand by almost all the Banks and Insurance Companies. (refer Table No. 4.6b.1 and Chart No.4.6b.1)

• Hence it is crystal clear that similar sets of skills are required in the Banks as well as in the Insurance Companies.

• Due to limitations of obtaining information from hiring managers and the branch managers’’ reluctance to disclose the skill gaps of their staff, the direct question regarding skills in shortage was twisted and asked in terms of skills in-demand. Hence by comparing and analyzing the tables of Indicators, Determinants and Skills in-demand, it is observed that Technological Skills and Soft Skills are in shortage in Financial Service Sector.(Refer Table No.4.2.1, Table No.4.3.1 and Table No. 4.6b)

• The Banks as well as Insurance Companies to a great extent consider the following factors as clear representation of the skills of an individual (1) Basic Educational qualifications (2) Different add-on Certificates (3a) Experience in terms of Years (3b) Experience of Working in Particular Functional Area (3c) Experience of Working in High Performing Organizations (4) Rely on Personal Interviews.

Findings Based on Objectives and Research Questions of the Study

Objective 1 - To identify and compare the Indicators of Skill Shortages in Banks and Insurance Companies of Financial Service Sector.

Research Question 1- What skills are required in Banks and Insurance Companies of Financial Service Sector?

Research Question 2 - What are the indicators of skill shortages in Banks and Insurance Companies of Financial Service Sector?

Research Question 3 - Does the skill shortage exist in Banks and Insurance Companies of Financial Service Sector?

• Under this study, the Skill Shortages in the Financial Service Sector have been identified using 11 Indicators of Skill Shortages which are acknowledged after extensive literature review. These indicators are (1) Supply of professionals is not as per the required quality in terms of skills & experience (2) It is difficult to get entry level professionals as per requirements (3) It is difficult to get Experienced / Higher Level professionals as per requirements (4) For professionals, demand is high and supply is less (5) Higher investments in Recruitment & Selection procedures by the organization (6) Higher investments in training programs by the organization (7) Ever had to hire professionals with lower than required standards of qualification / skills / experience for any vacancy (8) Mostly work overtime to meet the objectives (9) Attrition rate is high in Entry Level professionals (10) Attrition rate is high in Senior Professionals; and (11) Reluctance of professionals for relocating to Aurangabad.

• The Banking sector exhibited the 5 Indicators of Skill Shortages out of 11 Indicators viz. (1)For professionals, demand is high and supply is less (2)Higher investments in Recruitment & Selection procedures (3)Higher investments in training programs (4)Mostly work overtime to meet the objectives (5)Reluctance of professionals for relocating to Aurangabad.(refer Table No. 4.2.1 and Chart No.4.2.1 )

• The Skill Shortage is at alarming state in Insurance industry as 10 out of 11 Indicators of Skill Shortages are observed in Insurance Companies; viz. (1)Supply of professionals is not as per the required quality in terms of skills & experience (2)difficult to get entry level professionals as per requirements (3)difficult to get Experienced / Higher Level professionals as per requirements (4)For professionals, demand is high and supply is less (5)Higher investments in Recruitment & Selection procedures (6)Higher investments in training programs (7)had to hire professionals with lower than required standards of qualification / skills / experience for any vacancy (8)Mostly work overtime to meet the objectives (9)Attrition rate is high in Entry Level professionals (10)Reluctance of professionals for relocating to Aurangabad. .(refer Table No. 4.2.1 and Chart No.4.2.1 )

• The Banks and the Insurance Companies have unanimously Highly Agreed only for 2 Indicators of Skill Shortages out of 11 Indicator, viz. (1) Higher Investments in Recruitment & Selection Procedure; and (2) Higher Investments in Training Programs. (refer Table No. 4.2.1 and Chart No.4.2.1 )

• By testing the Hypothesis-1, it is revealed that there is a skill shortage in Banks as well as Insurance Companies. (refer Table No. 4.7.1). Both, Banks and Insurance Companies have unanimously moderately agreed that there is Skill Shortage in the Financial Sector

Findings

Objective 2 - To understand and compare the determinants of Skill Shortages in Banks and Insurance Companies of Financial Service Sector.

Research Question 4 - What are the determinants of skill shortages in Banks and Insurance Companies of Financial Service Sector?

(1) Macro-Economic Factors :

• Majority of the Banks as well as the Insurance companies unanimously echoed that Increased Competition to a great extent contribute to the Skill Shortages in the sector.(refer Table No.4.3.1)

• Majority of the Banks and the Insurance Companies also opined together that other Economic Factors such as Rapid Technological Changes, Globalization, and Evolving Regulatory Framework/Legal Compliances to moderate extent contribute to the Skill Shortages in the Financial Service Sector. (refer Table No.4.3.1)

• The banks majorly responded that National Economy and Changes in Customer Orientations are to moderate extent responsible for Skill Shortages. Whereas for the same factor, the Insurance Companies opined that they are to a great extent reasons for the Skill Shortages in the sector. (refer Table No.4.3.1)

• Under the study, the determinants of the Skills Shortages have been found broadly in five categories viz. (1)Macro-Economic Factors (2)Mobility (3)Education System (4) Internal Training /HR Issues; and (5)Sector Specific Factors.

(2) Mobility:

• The Banks as well as the Insurance companies opined in chorus that Mobility factors such as Migration to Metro Cities/Tier 1 Cities and Reluctance to move to non-metro cities or Tier 2/Tier 3 cities to a great extent determine the Skill Shortages in Financial Service Sector. (refer Table No.4.3.1)

(3) Education System:

• Majority of the Banks responded that the factors related to Education System such as Dysfunctional Education System, Lower standards of formal qualifications, Difficulties in finding experienced employees, and Skills mismatch in the labor market are to moderate extent responsible for Skill shortages , whereas for the same factor, majority of the Insurance Companies replied that these factors are to a great extent responsible for Skill Shortages in the Sector. (refer Table No.4.3.1)

(4) Internal Training/HR Issues:

• Majority of the Banks as well as the Insurance Companies echoed that Internal Training/HR Issues to a great extent contribute to the Skill Shortages. These factors are Time Consuming Recruitment & Selection procedure, Training & Development Policies of Organization, Difficulties in skill upgrading with the pace of Technological Changes, and Reluctance to Change by Employees. .(refer Table No.4.3.1)

(5) Sector Specific Factors:

• The majority of the Banks and the Insurance Companies unanimously responded that certain Sector Specific Factors to a great extent determine the Skill Shortages in the Financial Service Sector. These factors are Change in industry structure, Specialized and specific knowledge & skills for every job role, Employee poaching within sector like insurance/NBFI etc., Need of new skills due to changes in external environment, Slow Pace of upgrading skills of current employees; and Slow Pace of upgrading skills of external workforce supply. (refer Table No.4.3.1)

Objective 3 - To study and compare the types and extent of Skill Shortages in Banks and Insurance Companies of Financial Service Sector.

Research Question 5 - What is the type of skill shortage in Banks and Insurance Companies of Financial Service Sector?

• Under the study, the patterns of majority of the responses from the Banks and the Insurance Companies regarding the Indicators and the Determinants of Skill Shortages reflect that the Financial Service Sector is going through Structural Reforms issues such as Technological Changes, Globalization, Competition, Migration of workforce, Mobility, Supply of Workforce, Organizational Recruitment and Training Policies etc. (refer Table No. 4.2.1 and Table No.4.3.1). Hence the current study reveals that the Financial Service Sector facing the Structural Skill Shortages.

Research Question 6 - To what extent does the skill shortage exist in Banks and Insurance Companies of Financial Service Sector?

• The framework of the study stated that if the Skill Shortage is because of multiple factors then it means that it is a Complex Skill Shortage. By analyzing the various Determinants of Skill Shortages, it is observed that Macro-Economic Factors, Mobility Factors, Education System, Internal Training/HR Issues and Sector Specific Factors are to great extent contributing towards the skill Shortages in Banks as well as in Insurance Companies. (refer Table No.4.3.1) Hence the study reveals that the Financial Service Sector is facing the Complex Skill Shortages.

Objective 4 - To analyze and compare the effects of Skill Shortages on the performance and functioning of the organizations in Banks and Insurance Companies of Financial Service Sector.

Research Question 7 - Does the skill shortage create negative impact on the performance of the Banks and Insurance Companies of Financial Service Sector?

• Under the study, by testing the Hypothesis-2, it is found that the Skill Shortage does create a negative impact on the performance of the Banks and the Insurance Companies. (refer Table No. 4.7.2)

• Majority of the Banks reported the negative impact of the Skill Shortages to moderate extent, whereas, on the other hand the Insurance Companies reported the negative impact of Skill Shortages to great extent .(refer Table No. 4.7.2)

• The study also reveals that the Banks witness moderate to small extent of Immediate, Long term, Overt and Covert Negative impacts whereas the Insurance Companies face moderate to great extent of Immediate, Long term, Overt and Covert Negative impacts of Skill Shortages. (refer Table. No. 4.4a1)

Research Question 8 – What are the effects of skill shortages on the functioning of Banks and Insurance Companies of Financial Service Sector?

• The study reveals that around 85% of the Banks as well as the Insurance Companies reported that they are adjusting hard to meet the objectives to a great extent.(refer Table No. 4.4b.1)

• For the negative impacts of Skill Shortages such as (1) Reduced productivity (2) Reduced ability to serve clients (3) Reduced competitiveness (4) Reduced innovation and creativity (5) Difficulty in succession planning (6) Difficulty in implementing strategic HRM policies(7) Lower employee engagement / Morale , the majority of the Banks responded as from moderate to small extent , whereas the Insurance Companies responded as from moderate to great extent.

• It is noteworthy that in spite of the existence of Skill Shortages, both, the Banks as well as Insurance Companies stated that to small extent they deliver their services late and to small extent they have error rate. (refer Table No. 4.4b.1)

Objective 5 - To understand and compare the strategies adopted by the organizations to mitigate the skill shortages in Banks and Insurance Companies of Financial Service Sector.

Research Question 9 – Which kind of short term and long term strategies are being adopted by the Banks and Insurance Companies to mitigate the skill shortages?

• The Longer Working Hours and the Job Enlargement or Job Rotations are the short term strategies which are often adopted by the Banks and the Insurance Companies. It is noteworthy that majority of the Insurance Companies responded that they always have Longer Working Hours (refer Table No.4.5a.1 )

• The study finds out that the banks as well as the Insurance Companies consider six long term strategies very important to cope up with the skill shortages viz. (1) Creation of new veteran Hiring Programs (2) Focusing on Retention Strategies (3) Employee Training and Development Programs (4) Brand Imaging (5) Better Work Life Balance (WLB) (6) Tie ups with reputed educational institutes.(refer Table No.4.5b.1)

• The Banks and Insurance Companies unanimously consider that the Educational Institutes and the Job Seekers/Existing Employees Themselves play very important roles in mitigating the Skill Shortages form the Financial Service Sector. ( refer Table No. 4.5c.2)

Recommendations to the Employers

• Employers in Financial Service Sector are already implementing various strategies to cope up with the problems of Skill Shortages. But the Skill Shortages are mostly related to the external labor market. Instead of adapting to the reactive approach for the Skill Shortages, the employers need to think of proactive approach. Employers may create some positions for internships, so the new entrants will get some domain knowledge.

Recommendations

Recommendations to the Job Seekers/ Current Working Professionals

1. Skill Shortages in any industry prove to be a boon for the job seekers. Hence, to grab this opportunity, the job seekers must extensively study the skill set required by the sector.

2. The job seekers and the current working professionals should periodically perform self-assessment of their skills and must keep on upgrading according to the changes in skill demand. To be aware of the current skills demand by the sector, the job seekers and the working professional should occasionally research the job descriptions of current vacancies in the industry. By doing so, they can easily cross-check about the skills they have and the skills they need to upgrade.

3. As the current study reveals that the Skill Shortage scenario is worse in the Insurance Industry, hence the job seekers must try to approach to the entry level positions in the Insurance Companies. The required skills set are almost similar in the Insurance Companies and the Banks, hence after gaining some initial experience they can move to any desired position in any industry of Financial Service Sector.

4. Along with obtaining specialized Graduate and Post-Graduate degrees, it is necessary for the job seekers to get some additional certificates related to their aspiring positions.

5. The current working professionals must look forward for some job enlargement or job rotational opportunities as per their career ambitions. Because some skills cannot be obtained by learning, they need hands on experience to be excelled in.

Recommendations to the Educational Institutes

Recommendations to the Government

"The HIRING Desk" (Job Portal) - A Digital Solution is proposed by using a Systems Thinking Approach to Address the Skill Shortages and Skill Mismatches. Donella Meadows' Leverage Points for Intervention have been referred to identify the places for intervention.

1. The Educational Institutes should look forward to provide specialized graduate, post-graduate, diploma and certificate courses related to Financial Services.

2. Along with the theory, more practical approach towards the concepts should be adopted.

3. Some additional certifications related to the Financial Service Sector should be made mandatory for the students or at least detailed guidance must be provided to obtain specialized certificates.

In order to identify the leverage points and to suggest a strategy for reducing the skills shortages from the region, the entire problem has been examined using a Systems Thinking Approach.

1. Government should periodically survey the Skills Shortages in Financial Service Sector to provide a clear scenario to the employers, job seekers, educational institutes about the skills required currently and in near future. This would help to a great extent to mitigate the structural unemployment from the labor market.

2. Along with monetary CSR (Corporate Social Responsibility), the provisions should be made for some kind of Knowledge Sharing Programs under CSR.

See Details here

Future Scope of Research

1. The current research tried to understand the demand side of the Skill Shortages scenario of the Financial Service Sector. Studying the supply side of the Skill Shortages would be an important aspect to consider for the future research.

2. The characteristics of the labor market vary according to different geographical locations. Hence it would be an interesting research to study the Skill Shortages at various geographical locations.

3. Adopting the quantitative research methodology, the current study used closed-ended questions to get the responses from the Banks and Insurance Companies. As a different aspect of research, a qualitative research methodology with open-ended questions would present the Skill Shortage scenario in more magnified manner.

Thank You