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Woori Bank plans to cut 1,000 employees over the next three years. This is because we believe that if we do not change the large organization that focuses on branches, we will inevitably fall behind in the competition with Internet banks and big technologies (big information technology companies). Starting with Woori Bank, the wind of workforce restructuring is predicted to blow through the banking sector.
According to the financial sector on the 25th, Woori Bank is pushing a plan to reduce the number of executives and staff members from around 14,000 to the level of 13,000 by 2022. Assuming the number of newly hired staff remains as usual (2,000 over the last three years), it means that around 3,000 of the existing staff should be cut.
Woori Bank will work to group 676 general branches into 117 regional branches starting next year to improve the efficiency of workforce management. Next month, the number of executive positions with vice president or above in executive staff will be reduced from 22 to 20. A senior Woori Bank official said: “The proportion of labor costs in net profit is too large to be competitive with the current structure of the workforce “.
The high cost structure is the same for other commercial banks. So there is the prospect that the restructuring of the banking sector workforce may be in full swing. A commercial bank official said: “As the number of people using digital and remote banking has increased rapidly, the need for offline stores and human resources has declined relatively significantly.” They will be. ”
“I need to cut labor costs to survive” … Sudden increase in bank ‘workforce restructuring’
To compete with big tech like Naver, a large number of IT and digital staff are transfused
Starting with Woori Bank, there is a chance that the movement to restructure the banking sector workforce will begin in earnest starting next year. It’s an analysis that ‘improving the constitution’ has emerged as a survival chore as digital and remote finance has become the trend with the Corona 19 incident. There is also a growing awakening that a shakeup is needed. radical focused on digital talent to take on big tech like Kakao Bank, which is growing rapidly without stores, and Naver, which is destroying the financial sector with big data as a weapon.
“If you can’t reduce labor costs, there is no future”
Major national banks are struggling to lower their operating income expense ratio (CIR). CIR is the portion of selling, general and administrative expenses in operating profit. It is mainly used to judge the business efficiency of a bank. At banks, 50-70% of SG&A expenses are made up of labor costs. It is a representative indicator to see how efficiently banks make a profit relative to their workforce.
The reason Woori Bank plans to cut their jobs is because this ratio is higher than other banks. Woori Bank’s CIR in the third quarter was 53.7%, higher than Shinhan Bank (44.2%), Kookmin Bank (48.6%) and Hana Bank (43.7%).
The growth of Kakao Bank, which turned black this year, is also a factor that raised the feeling of crisis. The CIR is still higher than that of commercial banks due to the small size of earnings, but experts predict that it could drop to 30% sooner or later. A commercial bank official said: “Because Internet banks have no stores, fixed costs, such as labor and rental fees, can be drastically reduced.” I will.”
Considering the symbolism of hiring in the financial sector, it is analyzed that it will not be easy to reduce hiring. One banking executive said: “Cutting new hires is the most obvious way to cut staff, but we have no choice but to see the financial authorities.” . This year, the number of new hires at six large banks, including Shinhan Kookmin Woori Hana Nonghyup Corporation, was about 2,000, 30% less than last year (2,779).
Accelerate the recruitment of digital talent
The major banks agree that they can only survive when they break away from the existing financial industry and transform into “information technology (IT) companies.” Most banks are already in the process of consolidating existing stores and reorganizing them around base stores. Face-to-face and non-face-to-face convergence services are also being introduced one after the other.
Recruitment targeting digital talent is also expected to accelerate. Banks are putting their life and death into recruiting science and engineering students in the fields of artificial intelligence (AI), big data, blockchain, and software by creating a special digital master’s and doctorate program. Kookmin and Woori Bank beefed up their IT and digital workforces by 40 and 70, respectively, through frequent hiring in the first half. Shinhan Bank collaborated with Samsung Electronics to prepare a special recruitment selection program for IT talents, and Hana Bank began “coding training” for all employees.
A senior executive at a commercial bank said: “In the future, the digital and IT workforce will no longer be called ‘professional workforce.’ The time has come when every bank employee must have the same knowledge and competitiveness than employees of an IT company. “
Reporters Jeong So-ram / Kim Dae-hoon / Oh Hyun-ah [email protected]
