Financial Engineering to Financial Inclusion
Ramesh Ramanathan Chairman, Janalakshmi Financial Services
off. So over a 4-5 year period, the
employee can go from a 19-year-old
earning `10,000 as a field executive
to a 24-year-old Area Head, earning
`40,000 with a college degree. At this
point, they are also offered a housing
loan. So they go through a Naukri,
Degree and a Makaan. In some sense,
it is making the promise we made to
people come true. It is also creating
enlightened self-interest because if this
is done consistently; we reduce the
churn on the feet-on-street level and
the investments made. I genuinely
believe that in 15 years, the CEO of
the company will be someone who
grew in the ranks in the company.
Q. In financial services, and in
most private sector jobs, we have
sort of accentuated the entire war
for talent. How have you managed
to make training a vital constant
in your growth trajectory?
A. Six months ago, we introduced a
new recruitment drive. We are today
a pan India organization in 70 cities
across 14 states. We decided to go into
the communities where our customers
are. Very often, even the children
who are customers could be potential
employees for us. So we tried reaching
out within the customer community
and it was a runaway success! At a
certain location, 35 positions needed
to be filled. We put up fliers among
our customers and did a lightweight
testing. Around 600 youngsters turned
up for those 35 positions. Out of those,
a 100 of them were outstanding. So
not only were those 35 positions filled
out but we ended up over-recruiting.
And the cost of acquisition was one
tenth of the traditional channel of
doing this. The point is, it makes
eminent economic sense if we think
differently about talent acquisition
both in terms of methods as well as the people we can bring onboard, as
opposed to everybody coming in with
that clichéd degree.
Q. At the industry level, what are
some of the fundamental shifts that
you have seen in the last five years.
And what are the shifts you would
like to see in the next five years?
A. Soon after the financial crises, I was
on the panel for the World Economic
Forum, and the focus was on greed
and how we are overcompensating
people. I think that is the single
biggest existential question for us in
the financial sector, globally.
We have gone overboard in the way
people are compensated, but currently,
I don't see any way out of this. Unlike
in many other sectors like consumer
products or in manufacturing, where
the attribution of one's value-add to
the profits is not so straightforward,
in financial services, it is very easy to
point out the exact profit that was
brought in by an individual. In such
cases, it becomes very hard to retain
talent without using money as the
only currency. So everybody becomes
a mercenary and the culture becomes
completely distorted. One of the
major questions that financial services
institutions need to address is - how
do we come back to a compensation
formula that doesn't bring out the
worst in people? Everybody has a desire
to invest in the larger purpose, and if
the job doesn't give you that avenue, it
can leave you parched at some level.
At Janalakshmi, we believe there
are enough people out there, for
whom compensation is important, but
not the only driving force. We offer a
credible narrative on how the job at
JFS can fulfill an individual's need for
purpose. Our association with Aon
Hewitt has been about codifying this
philosophy and we can see it bringing out results as well. For instance, in terms
of compensation, our approach when
hiring feet-on-street is very different
from that for our senior management.
But as employees move up the
organization, other factors such as
ability to make an organizational impact
and do larger good for the country
take prominence over compensation.
So in a way, it's a balancing act.
Q. What do you think are some
of the lessons that the larger
financial services or the banking
industry, which always seems to be
looming under pressures of talent
paucity, can learn from the JFS
model of conducting business and
engaging with their workforce?
A. I am a product of the financial
market and a student of outstanding
financial services companies. Having
worked in a large multinational bank,
the only thing I would say is that
financial services sector is a unique
sector because we are at the heart of
a country's economy. Therefore, we
have the ability to articulate our role
in larger purpose terms. So if we can
hold on to that purpose and sharply
define, it can be a very important
strength for an organization, to then
be able to bring onboard the right
people, to address this challenge
of greed vs. purpose and overcome
conflicts. But that requires the right
leadership. It requires leaders who are
willing to think larger than their own
needs and will lead from the front
and lead by example.
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