PERSONNEL DEVELOPMENT

CAREER #7-8 (114) JULY-AUGUST 2008
BUSINESS-WORK
 

Vladimir Emeljyanenko
 

A UNIQUE FINANCIAL INSTITUTION, STATE CORPORATION ‘BANK FOR DEVELOPMENT AND FOREIGN ECONOMIC AFFAIRS (VHESHECOOMBANK)’, WAS ESTABLISHED IN RUSSIA. THE BANK’S HUMAN RESOURCES DEPARTMENT IS TASKED WITH IMPLEMENTING STRATEGIC INITIATIVES IN HUMAN RESOURCES MANAGEMENT. BELOW IS AN INTERVIEW WITH VNESHECONOMBANK BANKING OPERATIONS DIRECTORATE HEAD SERGEI NOSKOV.

 - Sergei Yurjevich, how did a change in Vnesheconombank’s status impact the activity of the Bank’s human resources department? The fact is that human resources’ functions are limited and you can hardly think of something new.

With changes in the Bank’s strategic development plans, human resources’ priorities tend to change too. We are facing new objectives and our employees need special expertise and skills to achieve them. They have to be able to change their approaches and operate in a new business environment. Vnesheconombank’s strategic plans are to implement infrastructure projects aimed at removing economic growth infrastructure restrictions, boosting innovations, providing support for small and medium-sized business and the export of industrial products and services. Moving to a principally new qualitative level gives rise to more complex tasks and requires highly qualified specialists. They are always in short supply but we need them here and now. So at this stage, investment in man, intellect is our top priority. We concentrate substantial financial and administrative resources in this line of our activity. And I mean not only our Bank’s personnel but also our partner companies’ personnel including human resources of government and municipal authorities as well as commercial sector personnel participating in joint projects implementation. We must train sought-after specialists for specific projects.

Do you believe that business keen to avoid any cooperation with authorities would welcome such cooperation?

Now Vnesheconombank jointly with the Ministry of Education and Science is discussing an issue of including the program of training qualified personnel for the mechanical engineering sector into the Bank’s list of priorities. If we want to have real professionals we should invest in their training and should not wait for ready-made professionals. This is also he case with infrastructure projects. We can complain for a long time that mechanisms for cooperation between the state and business are not as good as we’d like them to be and that regions lack experience. But we can also get down to training specialists and this is jut what we are going to do

How?

Practice demonstrates that we have to modify traditional approaches to educational and training. While various projects were being implemented we found out that our partners and we had at least to develop a single conceptual approach and ideally, train specialists to suit our own purposes, specialists for each planned project. In the long run these ideas evolved into a project after Vnesheconombank executives’ had done a training course at the China State Development Bank. They established a special department at the China State Development Bank. The department is responsible for evaluating and training their partners’ personnel from technical specialists to managers. The China State Development Bank tries to avoid investment risks if their potential partners do not have a team of competent managers capable of addressing unusual problems. A part of training is provided through outsourcing but basic training is conducted by the department using the China State Development Bank’s funds. Despite the fact that this department is new at the China Development Bank and investments in training personnel are long-term in nature, technology used to train their partners’ personnel allows the China Development Bank to minimize investment risks by improving the quality of human resources involved in implementing investment projects.

Are you sure that Chinese business experience can be used in the Russian environment?

Of course, we should take into account differences in mentality, structure and distinguishing features of state regulation. But look at China’s economic growth rates? And the China State Development Bank is highly instrument in achieving such high economic growth rates. Chinese people absorb all high technologies like sponge and in this respect we can learn a lot from them. But it should be noted that Vnesheconombank tries to measure up to the best world standards while working with its personnel. And we are in a position to share our experience with others. In order to exchange business experience we have held a series of round-table discussions with the participation of Shanghai Cooperation Organization Interbank Consortium member banks (SCO).

We carried on discussing issues associated with human resources management at the Third International Interbank Conference organized by our Bank jointly with Gazprom and the International Moscow Financial and Banking School and arrived at a conclusion that it was necessary to work out new standards for human resources management with due regard to banking business specifics.

Highly qualified personnel tends to be enticed by competitors.

Surely, you wouldn’t object that it’s not the best thing to be content with poorly trained personnel because you are sure that they won’t be enticed by competitors. I recall an old TV commercial. In this commercial the Russian Emperor takes a walk near a pond where white swans swim and he asks a park keeper: “Why don’t swans fly away?” – “We clip their wings,” said the keeper. The Emperor orders them not to clip wings and soon he can see that there are no swans in the pond. A confused keeper makes a helpless gesture and says: “They’ve flown away, my dear Emperor.” Then the Emperor says: “If you had fed them better they wouldn’t have flown away.” This recommendation makes sense only if swans are still in the pond.

Who is going to be directly responsible for providing training? There are very few instructors in the field of public-private partnership.

We are planning to involve specialists from the largest Russian and Western consulting firms as well as lecturers from state universities, which can help to develop a structured training system. Regional personnel’s training and social development departments will act as coordinators. As we can see from these departments’ name they will be responsible for personnel social development in the regions. This objective is one of the most important today. Because by participating in implementing federal investment projects Vnesheconombank influences the social development of entire regions and helps address infrastructure problems, create jobs, increase employment rate, boost personal incomes. All this improves the quality of life and allows us to maintain high rates of economic growth.

As a rule, social sphere is a responsibility of separate departments. Why did Vnesheconombank decide to put its human resources department in charge of social sphere?

It was extremely important to put our human resources department in charge of social sphere. In many Russian companies human resources departments were traditionally in charge of social policies and social projects. It’s not only a matter of responsibility for fulfilling obligations to the Bank’s employees, this responsibility rests with the human resources department and is a component of corporate social responsibility. We are developing both the Bank’s social policy and mechanisms for transferring principles of social responsibility towards partners. Of course, social responsibility is closely linked to ethical principles. Nevertheless, it should become a day-to-day philosophy of each person ad company. As long as there is no competition between companies in the sphere of social responsibility, as long as social sphere remains to be an exclusive responsibility of the state there will be no progress.

Don’t you think that such a strong social motivation resembles a purchase of indulgence, an attempt by business that generated superprofits in the recent past to atone for the sins against society?

In my opinion this association is funny but not relevant. At least, as far as our Bank is concerned. I should admit that commercial entities’ deep social motivation is often dictated by their desire to reduce risks of unfavorable impacts on the part of the state structures and many companies under the state’s pressure have to introduce a practice of social responsibility. For example, they have to carry out socially meaningful programs as a compensation for their production activities polluting territories and harming people’s health. In our case the situation is quite different. Vnesheconombank initiates social responsibility itself and is an instrument of implementing the state’s responsibility to citizens. As opposed to commercial entities whose aim is to earn money our strategic goal is to financially promote our country’s socio-economic development. We pursue socially responsible investment policy and support only those projects that are aimed at improving the welfare of society.

In what way are you determined to introduce principles of corporate social responsibility towards partners? And how would you describe this line of your activity?

This line of our activity is absolutely new. In making a decision on the possibility and terms of financing a project at present Vnesheconombank does not take into account such criterion as a principle of social responsibility towards partners. In the short term, expert examinations of all projects are to be conducted with due regard to social effect from their implementation. It’s important for us to find out if our potential partner’s activity is in line with society’s social needs? How are natural resources spent, how is workforce used, what impact does business have on a region’s development. This approach aims not to increase percentage of refusals to finance projects but on the contrary to raise the general level of investment projects’ effectiveness by raising living standards in a region, creating new jobs and increasing labor safety.