Shortcut to human capital development through diversity and inclusion
From its rudimentary inception, the modern Islamic finance industry has grown not only in size but also in complexity. From basic products that catered to the financing needs of the embryonic market at the start, the industry has developed to encompass a wide spectrum of products and services catering to the needs of a large and, at times, discerning market. FARHAZ FAROUK explores.
Farhaz Farouk is a consultant, trainer and speaker, presently collaborating with two
boutique consulting firms on transformation projects. He can be contacted at [email protected].
As with any industry, the successful growth and development of the Islamic finance industry could be attributed in no small measure to the human capital that has worked tirelessly over the years to elevate the overall industry to where it is today.
At the inception, the products and services of the Islamic finance industry were primarily designed toward fulfilling the needs of those professing the Islamic faith. For a short period, it served this purpose. However, the potential for the industry to offer its services to a wider market was clear from an early stage.
Human capital in the early Islamic finance industry comprised mainly of people of the Islamic faith, with many not exposed to conventional banking practice. Human capital development includes the fostering of work-related skills and knowledge among the existing human resources. Further education and industry-specific training are also paramount. These measures served to improve the abilities of the existing human resources toward achieving the goals of the organization. The industry has several institutions that cater to education and training. Access to the programs of these institutions is not wide, and at times is an expensive exercise. The Islamic finance industry provides retail banking, Takaful, capital markets, investment banking and small-scale microfinancing, to name a few. Human capital requirements have also grown exponentially, along with this industry growth. Despite this growth, there continues to be a considerable undersupply of human resources.
With overall growth, the industry was quick to recognize the need to break out of this narrow talent pool and procure human capital from wider sources. Experienced professionals from conventional banking were admitted to the fold. The industry also welcomed professionals from other faiths. This enriched the talent pool and brought with it much-needed expertise that ensured the industry grew and functioned in an efficient and effective manner. However, is this adequate, given the growth in the industry?
Encouraging diversity and inclusion.
It is high time the industry looked at diversity and inclusion on a much larger scale. While there are institutions that have already embraced these concepts at the organization level, the extent of adoption at the industry level can certainly be increased. One employing organization recruited human resources from all corners of the globe and from a multitude of faiths and backgrounds. All members of the team were encouraged to bring out their best which resulted in the organization growing to a leading position. The nature of the workforce is a representation of the market an organization aims to serve. Having a diverse and inclusive workforce could help with expanding existing markets and opening new markets, and potentially also help with devising and developing new products and services for these expanded and/or new markets.The industry must encourage women to join its ranks and enable them to work their way up the career ladder. It is imperative that female members of the human capital pool also be given opportunities to rise in the hierarchy and assume senior leadership roles. Members of the human resources pool that subscribe to different and/or non- traditional orientations could also be brought into the industry, despite their preferences. Their respective preferences are obviously personal to them and should not have a bearing on their ability to positively contribute toward the success of the industry.
Existing culture should be challenged and updated if the industry is to benefit from human capital from non-traditional sources
At first glance, the orientation preferences of this human resources segment may seem to be at loggerheads with the operating principles of the industry. If this factor was important, then one could question the admission of people of other faiths to the industry as well since the principle remains the same. However, this should not be the case.
The personal beliefs and preferences, and by extension, factors such as age, gender, ethnicity, education, origin and disability/special needs, should not have a bearing on their suitability to join the industry. The only factors that may need to be considered are job-specific training/ licensing, background checks and security clearance. Opening the doors of the industry to everyone both in word and deed — even those that have traditionally been overlooked due to their factors such as orientation — would provide the industry with a much larger and richer human capital pool. This, in turn, could help to enrich the existing talent pool with newer skills, knowledge and exposure. If talent from a wider pool is welcomed, the ultimate beneficiary will be the industry and its customers.
Rethinking culture
The Islamic finance industry has generally been welcoming of people of other faiths. However, at its roots, the industry maintains a conservative culture. Any personal practices and preferences that do not resonate with the generally accepted religious thought usually may not have a place in this conservative culture. However, if the industry is to continue its growth, it must look beyond the traditional human resources pools. In order to do this, reconsidering the culture prevailing in organizations, and by extension in the industry, is pertinent. In this connection, it may be useful to look at Edgar Schein’s layers of organizational culture, viz. artifacts, values and assumptions. Of these three layers, it is the last one that needs closer scrutiny. ‘Assumptions’ consist of invisible and/or preconceived things that are taken for granted. They are not talked about, but generally accepted. It will be worthwhile to revisit, reconsider and rethink any such preconceived notions about the suitability (or lack of suitability) of potential human resources. Without such a shift in paradigm, the industry may keep its doors closed to numerous promising human resources, and in effect stifle the development of human capital.
Conclusion
The Islamic finance industry is ever- growing and needs a steady supply of human capital to ensure its success. Enhanced work-related skills development, continuous education and training are important and should be done. However, increasing diversity and encouraging inclusion will be extremely useful in widening the available human resources. Accordingly, opening the industry to talent from human resources pools that were traditionally not considered suitable could help speed up human capital development. Existing culture should be challenged and updated if the industry is to benefit from human capital from non-traditional sources.
This article was first published in IFN Volume 18 Issue 18 dated the 5th May 2021, and can be found at the following link:
https://www.islamicfinancenews.com/shortcut-to-human-capital-developmen…