1 .  Introduction   :  The Importance of Talent in Modern Banking















Banking is among the sectors in the economy that are more people-oriented. It is a firm that is heavily dependent on competent, reliable, and customer-driven employee base to provide financial services effectively (Radha & Aithal, 2023). The modern business environment is competitive and heavily relies on technology and today, banks are finding it more difficult not only to recruit but also to retain and keep the talents (Judijanto, et al., 2025). The proper talent acquisition is the approach that helps banks to hire people who have the appropriate skills, values, and retention strategies are aimed at retaining them as long as possible keeping them motivated and engaged (Saha, et al., 2025).

Digitalization, regulatory changes and changing customer demands are transforming banks globally. The changes have rendered the human resource management (HRM) more strategic than ever (Wahdaniah, et al., 2023). The current banks not only fight over the customers but also over the best talents particularly in aspects like digital banking, risk management, and customer analytics. Large percentage of the workforce in the banking sector in Sri Lanka is the service-sector workforce, as more than 48.5% of the labor force is in the services (Census and Statistics, 2024)

Figure 1 - Employed population by major industry group, 2018 - 2024 (Source - Labour Force Survey - Annual Report 2024)


Figure 2 - Employed population by major industry group – 2024 (Source - Labor Force Survey - Annual Report 2024)


However, the sector has experienced a high turnover of staff because of the economic factors, immigration, and the lack of career growth. The industry reports that in 2022 the major banks in Sri Lanka have reduced approximately 350 employees altogether, and the voluntary resignations have been on the increase after the post-crisis recovery period (Cal, 2023).

Talent acquisition and retention have become significant in the quest to maintain operational efficiency and customer confidence (Bhati & Manimala, 2011). As digital transformation gains ground, banks are now seeking workers who are both technologically literate and financially savvy. Nevertheless, getting this multi-skilled professional is becoming a hard task due to the global demand and migration of skilled personnel (Ajayi-Nifise, et al., 2024).

The blog focuses on the issue of talent acquisition and retention by banks and provides examples of the banking industry in Sri Lanka, as well as ties the HRM theories to the Resource-Based View (RBV), the Motivation Theory, and the Human Capital Theory. It also contemplates the effect of these practices on productivity, quality of service and reputation of organizations.


Reference

Radha, P. & Aithal, S., 2023. A Study on the Performance of Employees in the Banking Sector and its Impact on the Organizational Health. International Journal of Management Technology and Social Sciences.

Judijanto, L., Novitasari, S. A. & Arini, R. E., 2025. Competitive Advantage of Banking Industry in the Digital Age: A Bibliometric Approach. West Science Interdisciplinary Studies , 3(4), pp. 640-652.

Saha, P. G. C., Roy, A. & Akther, S., 2025. The Impact of Talent Management on Bank Performance. Journal of Business and Management Sciences , 13(4), pp. 154-159.

Wahdaniah, Sucianti, R., Ambalele, E. & Tellu, A. H., 2023. Human Resource Management Transformation in the Digital Age: Recent Trends and Implications. International Journal of Applied Research and Sustainable Sciences, 1(3), pp. 239-258.

Cal, 2023. Banks cut 350 staff in 2022, turnover up. [Online]

Available at: https://cal.lk/banks-cut-350-staff-in-2022-turnover-up/    

[Accessed 12 November 2025].

Bhati, A. & Manimala, M. J., 2011. Talent Acquisition and Retention in Social Enterprises. Journal of Security and Sustainability Issues , 1(1), pp. 39-53.

Ajayi-Nifise, A., Odeyemi, O., Mhlongo, N. Z. & Chidera, V., 2024. Digital transformation in banking: The HR perspective on managing change and cultivating digital talent. International Journal of Science and Research Archive, 11(1), pp. 1452-1459. 

Comments

  1. Nilani SenevirathnaNovember 25, 2025 at 9:04 PM

    This introduction gives a clear and convincing overview of why finding and keeping talented people has become so important in the banking industry today. You've done a great job of showing how the industry's focus on people, along with rapid digital change, changing customer expectations, and tougher competition, has made high-quality talent a key factor in the success of organisations. Adding data about the Sri Lankan labour market makes the context much stronger, especially since economic pressures and migration are causing more and more people to leave their jobs.

    Your discussion also covers the strategic change in HRM, where banks need to not only hire professionals with a variety of skills, but also keep them by providing career development, motivation, and meaningful work. The piece's analytical depth is improved by its links to HRM theories like RBV, Motivation Theory, and Human Capital Theory. This opens the door for a more thorough look at how people practices affect productivity, service quality, and long-term competitive advantage in the banking industry.

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    Replies
    1. Imeshi UdenikaNovember 26, 2025 at 4:14 AM

      Thank you for your thoughtful feedback. I’m glad the introduction effectively highlighted why talent attraction and retention have become critical priorities in the banking sector today. As you pointed out, the combination of digital transformation, shifting customer expectations, and rising competition has placed human capital at the centre of organisational success.

      Including insights about the Sri Lankan labour market was intentional, as current economic pressures and increased migration have had a significant impact on workforce stability. These realities further justify why banks must adapt their HRM strategies to secure and retain skilled employees.

      I also appreciate your acknowledgement of the theoretical integration. By drawing on frameworks such as the Resource-Based View, Human Capital Theory, and Motivation Theory, the analysis aimed to provide a deeper understanding of how effective people practices can drive performance, enhance service quality, and create sustained competitive advantage in the banking industry.

      Delete
  2. Sachithra GarusingeNovember 26, 2025 at 7:45 PM

    An engaging and well-structured introduction that clearly highlights why talent has become a strategic asset in modern banking. You effectively connect digitalization, regulation, competition, and Sri Lanka’s service-heavy labor market to the growing difficulty of both attracting and retaining skilled banking professionals. Framing talent acquisition and retention through lenses like RBV, motivation theory, and human capital theory sets a strong academic foundation for the rest of the blog, while the reference to recent turnover trends in Sri Lankan banks makes the topic timely and practical. This opening gives readers a clear sense of why HRM is now central to productivity, service quality, and long-term reputation in the banking sector.

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    Replies
    1. Imeshi UdenikaNovember 27, 2025 at 6:31 AM

      This is a strong and insightful introduction. It clearly explains why talent has become a critical strategic resource in today’s banking sector and effectively links broader industry trends—such as digital transformation, regulatory pressures, and rising competition—to the challenges in attracting and retaining skilled employees. By incorporating theories like RBV, motivation theory, and human capital theory, the introduction demonstrates solid academic grounding while remaining practical and relevant. The inclusion of Sri Lankan banking trends adds local context and enhances the significance of the discussion. Overall, this introduction sets a clear direction for the rest of the analysis and highlights the essential role of HRM in ensuring long-term competitiveness and service excellence

      Delete
  3. Rahal MaddumageNovember 27, 2025 at 10:00 PM

    This section clearly explains why talent acquisition and retention are critical challenges for modern banks, especially in Sri Lanka’s changing economic and digital landscape. It highlights how technology, migration, and competition for skills make it harder for banks to build a strong workforce. The integration of HRM theories adds depth and strengthens the discussion. Overall, it provides a solid foundation for analysing how banks can attract, develop, and retain talented employees.

    ReplyDelete
    Replies
    1. Imeshi UdenikaNovember 28, 2025 at 8:43 AM

      Thank you for the thoughtful feedback. I’m glad the section effectively highlighted the current challenges banks face in attracting and retaining talent, particularly within Sri Lanka’s rapidly evolving financial environment. Your recognition of the role played by technology, migration pressures, and skills competition reinforces the importance of examining these issues through both practical realities and established HRM theories.

      I appreciate your acknowledgement that the analysis provides a strong foundation for further discussion. This feedback is valuable and will help strengthen the overall depth and clarity of the study moving forward.

      Delete
  4. Sajeewani NisansalaNovember 29, 2025 at 5:45 AM

    This article explains how banking depends strongly on skilled and motivated employees to deliver quality financial services. It highlights the rising challenges in hiring and retaining talent due to technology changes, global competition, and high turnover in Sri Lanka. The discussion shows that banks now need multi-skilled staff who understand both digital tools and finance. It also links talent management to important HR theories like RBV, Motivation Theory, and Human Capital Theory. Overall, it clearly shows why strong talent acquisition and retention are essential for banking performance and reputation.

    ReplyDelete
    Replies
    1. Imeshi UdenikaNovember 29, 2025 at 8:35 AM

      Thank you for this thoughtful summary. You’ve clearly captured why talent has become such a critical differentiator in today’s banking sector. The shift toward multi-skilled, digitally capable employees—combined with rising competition and turnover, especially in Sri Lanka—makes strategic talent management more important than ever.

      I appreciate how you connected the discussion to key HR theories like RBV, Human Capital Theory, and Motivation Theory, as these frameworks really help explain why investing in people directly strengthens performance, innovation, and long-term reputation.

      Your reflections add strong value to the conversation. Thanks again for engaging so insightfully.

      Delete
  5. Shehan AkalankaNovember 30, 2025 at 8:21 AM

    Great overview of the challenges and importance of talent management in Sri Lanka’s banking sector. I especially appreciate how you connected HRM practices to theories like RBV and Human Capital Theory, and highlighted the impact of digital transformation and employee retention on organizational performance.

    ReplyDelete
  6. Imeshi UdenikaDecember 2, 2025 at 5:28 AM

    Thank you for your thoughtful feedback. I’m glad the connections to RBV, Human Capital Theory, and the current challenges in Sri Lanka’s banking sector were useful. Your insight is much appreciated.

    ReplyDelete

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