Human capital and collaborative initiatives: Human capital development
Human capital development best practice begins at the education level. Despite over 378 institutions providing Islamic finance education globally , there is a lack of consistency in the delivery of courses; in academic information and definitions; in assessments, curriculum and even the competencies candidates acquire. Many courses from reputable universities are heavy on the Islamic finance knowledge, but lack the practical knowledge needed to work in the industry and innovate through technology. It is essential for the industry to address this mismatch between education and skills, and to work with educators to formulate, develop and agree on professional standards, and the use of Fintech and digital expertise to raise competencies.
The industry must also make a concerted effort to create pathways for graduates, including graduate schemes, internships, and placements. Graduates must become a part of the recruitment armory of Islamic finance. As an industry we cannot exclusively rely on conventional financial services for talent at the expense of non- investment in young graduates, who are agile, digitized and connected. One way to tackle this is through talent development programs, which foster knowledge, mentorship, support, employee engagement and a mindset that is flexible towards change. HR departments in IFIs have to take the long view and invest time and resources to create such programs and continuously review, assess and evaluate them, so that employees get the most out of them.
The industry must also make a concerted effort to create pathways for graduates, including graduate schemes, internships, and placements. Graduates must become a part of the recruitment armory of Islamic finance.
Similar investments are needed in the Sharia’ space, ensuring members of Sharia’ bodies and associations are aware of the latest industry developments and trends, are up to date on training, technological advances and are actively setting up apprenticeship schemes for young potential scholars. Nurturing and investing in young scholars is vital to help shed the image that the Sharia’ space in Islamic finance promotes conflict of interest, is insular in its thinking and lacks diversity.
An important aspect of best practice also involves looking at company culture. By 2020, over 35% of the workforce will be millennials, and 24% Generation Z – both as a demographic have distinct expectations. They want to work for organizations, which offer a work-life balance; they expect rapid progression in their career path, regular feedback, encouragement and learning on the job, as well as working for companies which have a positive social impact. Islamic finance principles have a natural affinity to address ethical, sustainable and socially responsible business practices. However, the industry must be more transparent and foster a culture to demonstrate how and where this is happening with concrete case studies from all Islamic ‘hubs’.
In terms of transparency, one of the most crucial areas for human capital best practice and governance is the provision of credible and reliable data. Islamic finance has little to no validated data. We are unable to truly verify the extent of talent development, human capital capacity, recruitment gaps and statistics on the extent of the talent shortfall across different facets of the industry. HR departments of banks and financial institutions and CEOs in the industry must collectively work to close the data gap and commit to sharing data for research and development purposes, which in the long term will help us identify talent gaps.
The Islamic finance talent pool must reflect diversity and inclusion. Women are an untapped resource, especially across Muslim-majority countries, which house the biggest Islamic finance institutions. There are no Sharia’ restrictions on women occupying important roles in the development of Islamic finance at all levels, yet we see few rising up the ranks in the industry. If the industry is serious about talent development, then female participation in the workplace must become a strategic priority at all levels, beginning with inclusive workplace policies, identifying and removing obstacles to women in the workplace, training and creating career pathways to leadership for women and establishing returnship programs for women to re- enter the workforce, for instance after having children.
Developing human capital in Islamic finance
Nurturing Islamic finance talent means to invest in supporting people, in training, engagement and creating a culture which fosters skills, creativity, inclusion and innovation. CEOs and Islamic finance leaders must pilot this change, and make talent development best practices a strategic priority. This requires implementing a framework which supports people and innovation – not just a symbolic gesture, but also a forceful stance crystallizing real development in human capital.
This article was originally published by Deloitte, in a report on “Islamic Finance - Scalable and sustainable funding source for social infrastructure”. The article is reproduced on this website with the kind permission of Deloitte.