Challenges with HR Planning, recruitment and deployment

1. Challenges with HR Planning, recruitment and deployment Deepak Alok

2. Agenda • Introduction • Case Studies: two typical MFIs • State of the sector regarding HR issues • Ideal Best Practices • Issues in attracting professionals to Microfinance • Conclusions

3. Explosive growth in Microfinance has resulted in steep growth in HR requirements HR Requirement Outstanding (Rs Crores) Projected This growth has made the HR challenges one of the most important issue in the sector

4. Agenda • Introduction • Case Studies: two typical MFIs • State of the sector regarding HR issues • Ideal Best Practices • Issues in attracting professionals to Microfinance • Conclusions

5. We will consider two typical MFIs to explore issues in HR MFI - A MFI - B

6. HR Challenges of these two types of MFIs MFI - A MFI - B

7. Agenda • Introduction • Case Studies: two typical MFIs • State of the sector regarding HR issues • Ideal Best Practices • Issues in attracting professionals to Microfinance • Conclusions

8. State of the Sector regarding on HR issues HR Planning Recruitment Deployment • Little formal HR planning system • Most of the planning is quantitative and concentrates on field staff • To feed in to financial plans • Planning is almost non-existent for the senior and middle management level • Almost no planning for training, deployment and motivation • MFI-A has good recruitment for the field staff level • Cannot find professionals for middle and senior management level • MFI-B often transfer staff from other programmes • MFI-A has formal training and job description for the field staff level • MFI-B has no formal training and job-description • Training for the senior and middle level staff is mostly donor driven

9. Agenda • Introduction • Case Studies: two typical MFIs • State of the sector regarding HR issues • Ideal Best Practices • Issues in attracting professionals to Microfinance • Conclusions

10. HR Planning needs a systematic approach HR Planning Identify functional requirements Define characteristics of personnel Identify source of personnel Personnel development and retentions • Operations • Finance • HR • Legal • Technology • Education • Experience • Attitude • Local graduates • Other MFIs • Other Industries • B school Campus • Compensation • Training • Job description • Motivation

11. Agenda • Introduction • Case Studies: two typical MFIs • State of the sector regarding HR issues • Ideal Best Practices • Issues in attracting professionals to Microfinance • Conclusions

12. Issue in Attracting professionals MF Needs Professionals MF can attract professionals • Large number of small transactions • Margins are small • Pressure to maintain portfolio quality • High volume of cash transactions • Large number of small units • Can scale up fast Professionals are not coming • Revenue model • Continuity • Capacity to scale up fast • Can objectively measure performance • Can compensate well • Confusion in the microfinance sector • SBLP Vs MFI • Grameen Vs SHG • Social Performance Vs Profitability • Virtue vs Vice

13. Agenda • Introduction • Case Studies: two typical MFIs • State of the sector regarding HR issues • Ideal Best Practices • Issues in attracting professionals to Microfinance • Conclusions

14. Conclusions • HR is the most critical resource in MFIs • HR is a neglected function - not considered urgent • Ad-hoc planning results in underperformance and can have disastrous consequences • With proper planning MFIs can increase efficiency of HR and ensure stable growth • Hire professionals, if the planning indicate a need for this