Case Study : Human Resources at Bank Danamon, Indonesia

Fullerton Financial Holdings acquired a majority stake in June 2003

When the business plan calls for 600 new branches in 12 months, the hiring and training of upwards of 6,000 staff is just one of many issues that the human resources (HR) group faces. A greater challenge than this is how to become an employer of choice so that you can attract and retain talented people in a competitive market.

International benchmark

The solution for Bank Danamon began by listening to its employees. It engaged an international human capital consultancy to conduct an annual survey to measure the contentment, alignment and enablement of its employees. The bank now benchmarks its own performance against that of other Indonesian and Asian firms. Mr Muliadi Rahardja, Director, Human Resources said, "In just two years, the bank has already improved its scores and ranks higher than its Indonesian counterparts by all three measures."

Now Indonesia's second largest employer in the financial sector, the bank scores the highest on enablement – which measures the availability of internal support, training and resources – befitting an organisation that is growing at an extraordinary rate.

Revamped platform

Mr Rahardja said, "The HR team of Fullerton Financial Holdings has collaborated with us since 2003 to revamp the entire HR platform and introduce new practices. With its support, we were able to stand back from the business and consider radical new ideas for our working environment." This partnership gave birth to a new strategy, focus and plan, leading to new initiatives such a customer-centric structure, consolidated information systems, a service centre, performance and talent management schemes and a long-term incentive scheme. Despite a 43% increase in headcount, the bank's HR group is leaner due to greater efficiencies.

A customer-centric approach for HR means that HR staff sits within the business units so that they hear the voice of the business and can understand its needs.

The service centre responds to queries from employees over telephone, facsimile, e-mail and short message service (SMS) channels. Following its analysis of the queries, the bank discovered that employees had most often inquired about the payment of overtime and medical claims. Now the bank proactively sends this data to employees by SMS.

Talent development

Leadership development is critical to the long-term health of the bank, and in 2007, it embarked on a leadership development programme in cooperation with INSEAD to help the bank maintain a high calibre pool of talent. Mr Rahardja said, "By having a clear model of talent management, we invest in the right people and reward the right people, in terms of both training and compensation."