Effective Training Needs Analysis for Banco Santander Chile: A Case Study, Study notes of Business Accounting

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Designing Training Needs Analysis Procedures and Instruments for Banco

Santander Chile

Track: Human Resource Management

Key Words: Training Needs Analysis, Banking Sector, Case Study.

Designing Training Needs Analysis Procedures and Instruments for Banco Santander Chile

Abstract Training Needs Analysis process (TNA) is essential for identifying problems with organizational performance and possible causes. Despite the fact that the

banking sector is important for economic growth, its implementation in the industry has lacked research. This investigation takes a case study approach, seeking to identify how this procedure is applied in Banco Santander Chile. An improved TNA is suggested, taking the proposals of authors such as Stone

(2009), and adjusting them to the banking industry. Specifically, a new TNA is offered combining resource optimization and data intelligence, improving connections between training needs and business priorities with optimal organizational performance.

1. Introduction Organizations around the world are increasingly facing highly competitive, globalized and uncertain environments (Kotter and Schlesinger, 2008; Van de Ven and Poole, 2005). In the banking sector, current challenges are

fundamentally rooted in growing demands made by the public and the regulatory environment (Pérez, 2014; Sutton & Jenkins, 2007). This is in addition to the rise in competitors that are not part of the banking industry, yet offer financial services that banks usually provide (Langley, 2016; Sutton &

Jenkins, 2007). The ability of banking entities to successfully deal with these challenges has become essential, especially considering the high impact these institutions have on economic development (Aldrich, Dietz, Clark & Hamilton, 2015; Álvarez & Jara, 2016; Monnin & Jokipii, 2010; Petkovski & Kjosevski,

2014). In response to these challenges, banking entities must combine substantial financial capital with human capital highly qualified in both knowledge and abilities (Aldrich et al., 2015).

Therefore, the decisions and policies taken in human resource departments (HR)

with regards to managing human capital contributes to an organization's viability and the creation of competitive advantages (Aldrich et al., 2015; Ubeda, Sabater & García, 2013). Specifically, training processes play a central role in carrying out organizational objectives through improvements in individual and

organizational performance (Salas & Stagl, 2009; Spitzer & Conway, 2002; Rothwell & Kazanas, 2008). They improve the knowledge, abilities and dispositions required of employees in order to bring a company's strategy to life (Ubeda et al., 2013) and increase productivity, work quality, motivation and

TNA is carried out in the financial industry at a global or local level. While there

are some approximations in the Asian financial context (Ferdous & Razzak, 2012; Sultana, Mohaimen & Ferdous, 2011), no specific tools utilized by the banks in their individual situations are described that can uncover training needs that will support the accomplishment of the strategic goals.

In light of the foregoing, this research encompasses two objectives:

 To identify the practices, procedures and data employed by training professionals at Banco Santander Chile when carrying out the TNA process with internal clients.  To formulate an appropriate, contextualized TNA proposal for Banco Santander Chile using a strategic alignment approach that describes the relevant actors, inputs, analysis and outputs to consider that can be obtained by the training professionals to facilitate a logical and rational investment of the training budget.

2. The Banco Santander Chile Context Banco Santander Chile is a Spanish banking institution that manages 49,

millions of USD in assets with a return on equity that is higher than the average of its competitors (Banco Santander Chile, 2015). Recognized as the top bank in Chile in 2015 (op. cit.), it is the best in terms of capital and market participation, with 17.7% in total investments, 29.9% of credit card lending, 21.9% and 20.7%

in consumer credit and mortgage lending respectively (Feller Rate, 2016). It has 11,723 employees (Banco Santander Chile, 2015).

The company's training division is tasked with handling the training needs of all of its banking departments, and is run by one assistant manager and four training

specialists. Its stated goal is: " to improve the performance of employees by strengthening their competencies (skills, attitudes and knowledge) in order to increase productivity and development ". Based on this goal, 646 courses (600 in person and 46 e-learning) were held in 2014. This results in an average of 46

training hours per employee with a total investment for the year of 5,538, USD. This sum increased to 5,940,516 USD in 2015.

However, there are no standardized procedures that align training with organizational goals. This means that the specialists make needs assessments

without having a standardized methodology that considers the key actors, inputs and outputs that are relevant to the process. This result in the TNA quality being subject to a high degree of variability in the criteria and practices preferred by each specialist when it comes to assessing the training needs of their clients.

This impacts the optimal performance of individuals, teams and the organization

overall.

3. Literature review

3.1. Organizational strategy and strategic initiatives High performing organizations are governed by strategic goals that are also

connected to critical processes, technology, personnel, and the organizational climate and culture needed to carry out the strategy (Kaplan & Norton, 2000). Hence, the organizational practices will be strategic when aligned with one or more stated objectives and are designed to close a performance gap (Kaplan &

Norton, 2008). This also applies to HR initiatives. Authors such as Rainieri (2001) point out "high impact HR tools", interventions " designed to improve efficiency, productivity and employee flexibility upon implementation " (p.7). Similarly, Boxall (2003) stresses that HR has a lot to offer as a source of

competitive advantages as the nexus between the corporate strategy and work systems. This means that training activities can be considered as strategic initiatives, given that their primary goal is to close performance gaps that affect the execution of stated goals (Barbazette, 2006; McArdle, 2010; Rothwell &

Kazanas, 2008; Stone, 2009; Salas & Stagl, 2009).

3.2. Training Needs Analysis Models The TNA is the first phase of the training models. It is the process that seeks to determine if there is a performance problem, who is affected by the gap, how

they are affected and which goals of the training initiative are intended to deal with it (Lawson, 2006; McArdle, 2010; Rothwell & Kazanas, 2008). It also addresses the scope and content, the involvement of the Line Managers and the relevant indicators for the assessment phase of the training program (Lawson,

2006).

For the stages of this process, Barbazette (2006) suggests an information- gathering phase followed by an analysis that includes relevant stakeholders and the creation of a training plan that seeks to close the performance gap. Lee,

Altschuld and White (2007) suggest that the process include: defining the ideal status of the situation (standard), identifying the current status, quantifying the discrepancies between these two states, analyzing the cause of said discrepancies and establishing priorities.

A large part of the TNA models involve the aforementioned stages, even if some are designed in more detail than others. In light of this, various TNA concepts are integrated below, specifically the theories of Barbazette (2006), McArdle (2010), Rothwell & Kazanas (2008), Salas & Stagl (2009) and Stone (2009).

strategy, technology or services, business opportunities to strengthen with training, new regulations or certifications). ii. Conduct a detailed study and analysis, and recognize alternative solutions, which helps identify the desired performance level and verifies the reason for the gap. iii. Carry out a situational risk analysis, examining what the likelihood is that participants will apply what they've learned to their jobs. iv. Propose a training plan and negotiate a performance alignment contract and link it to the organizational needs. v. Decide to implement the initiative or to undertake the process once more.

4. Methodology This study is a descriptive exploration. Based on the described theoretical proposals, it analyzes the rarely researched phenomenon of TNA practices used by banking institutions while it also seeks to uncover key elements that may affect the institutions (Martínez, 2006). A case study approach was used to collect, analyze and present the data, and is understood as “ an empirical inquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident ” (Yin, 2003, p.13). This method was chosen for three reasons. Firstly, in order to identify the practices and data used by the training specialists, it is fundamental to consider the conditions that have an impact on these activities and those that may enable or restrict their implementation, and this factor is part of the technique (Yin, 2003). Secondly, it permits multiple sources of information, intermingling quantitative and qualitative data that gives greater depth to the study's conclusions (Woodside, 2010; Yin, 2003). Thirdly, the case study can lead the research using a theoretical framework analyzed beforehand, thus guiding the data collection and analytical processes (Woodside, 2010; Yin, 2003). In keeping with this, the primary information sources include:

 Eight semi-structured interviews with keys actors in the TNA process. Interviews were conducted with three training specialists and the assistant training manager, the organizational development (OD) analyst in charge of human resource management assessments (Performance, Bottom-up, Engagement), a business partner (BP), the training and OD manager and the HR manager.  Observation as a participant and member of the training team.

The secondary data sources that were used include:

 Databases with evaluation results of human resource management for 2015 (Performance, Bottom-up, Engagement) in order to identify how this data

could be integrated into the TNA proposal as a relevant input for human resource management.  TNA process documents supplied by area specialists.

The interviews were analyzed using a thematic content analysis technique, dissecting the text into units and grouping them according to their similarities in function of the research goals (Vásquez, 1994). The files were examined using the organizational document analysis proposed by Anderson (2013). It involves comparing them, defining categories concerning the relevant themes of the study and producing a content chart. Table 1 describes the documents of the training department that were analyzed along with their primary contents.

Document Primary contents TNA 2007 TNA stages and training plan contents. TNA 2008 TNA definition and goals, inputs prior to data collection with the client, contents and format of the training plan, date to conduct the TNA, subject matter to treat, follow-up activities. TNA 2015: How does it work?

TNA stages and outcome data to collect in meetings with management (tools, knowledge and/or skills to develop). TNA for the insurance department 2015

Synthesis of 2014 training, results of performance evaluations, TNA stages, available corporate training programs.

TNA mail 2015 Mail that informs various managers of the start of the TNA process. The document "TNA 2015: How does it work?" is attached, requesting that certain points be analyzed prior to the meeting that will be held. Informational guide and TNA questions

Questions and items to collect in the interview with the line manager in the TNA meeting. Some of the information to be presented includes: a summary of the previous year's training, assessment indicators for human resource management, discrepancies per segment, HR indicators, (turnover, principal reasons for leaving), demographic team data. Table 1. Analyzed documents and principal contents

Accessing the aforementioned documents is a key added value for this study. The author also serves as a training specialist at Banco Santander, facilitating access to files that are exclusively handled by professionals in this area specifically and in HR more generally.

5. Presenting the case

5.1. Thematic content analysis Various categories and sub-categories were established based on information provided by the interviewees. The primary categories are presented below.

5.1.1. TNA process Inputs

management so that in the budget they can determine all of the issues and their

appropriate valuation. They will also have to choose which interventions will not be done in order to comply with the budget.

In comparison with the industry in Chile overall, Banco Santander's training investment per employee is lower than the average (431 USD versus 611 USD)

(Banco Santander Chile, 2016) despite having a competitive total budget with respect to its counterparts. However, generally speaking the total number of trained staff and the number of training hours per employee is greater equivalent^1.

Training activities conducted in the previous period

Two of the specialists list the entire set of training activities carried out in the client area throughout the previous year as a relevant input. This would help identify the areas that were invested in and imbue it with a medium-term

training perspective. The impact and efficacy of training activities in the human resource management assessments and business indicators could be reviewed.

Organizational secondary data analysis

Using the analyzed documents (Table 1), it can be concluded that the TNA has

been growing more complex and robust over time. It has gone from a vision focused on implementation without questioning the internal client requirements to one that specifies relevant inputs and outputs as well as the questions to pose to departmental management. It is important to emphasize that these are

documents designed by some of the specialists, meaning their use is not interdepartmental. Therefore it is necessary to analyze which elements agree with and/or complement the information gathered in the interviews. At least in the most recent documents, it is possible to see that they are consistent in large

part with the inputs and information found in the content analysis, especially the strategic goals and indicators, the budget, the assessment results and the training plan summary from the prior year.

Concerning additional factors that were not clarified in the interviews, the TNA

process and training plan should focus on improving knowledge, skills and/or technical tools. One factor to consider in the TNA instrument proposal is that the above point be included in the suggested activities, thus defining beforehand which type of measures can be included in the training budgets and which can

be left out (social events or recreational activities, etc.).

(^1) Information asked to training managers from four large

national and multinational banks

5.1.2. Comparison of analysis and collected information

The interviewees consider the validation of the HR professionals' recommendations by department managers to be important so that they can align themselves with the projects of the department and bank. In keeping with McArdle (2010), it is important to clearly explain that three indicators were used

in formulating the recommendations for validations: (1) The skills required by the organization, whose gaps can be found using the assessments; (2) The characteristics of the participants, teams, positions, job families and the area in general; and (3) The gap or strategic focus to work on.

The specialists agree that another relevant actor to include in the TNA process is the business partner. The BP can provide important information with respect to the other organizational development factors to consider, thus clarifying the plan proposal. This concurs with what is formulated by Barbazette (2006) and

Rothwell and Kazanas (2008) when proposing the importance of validation and consensus building between the various stakeholders in terms of the gaps to work on.

5.1.3. TNA process Outputs

Recommendations

Concerning the suggestions stemming from the data collection, one of the specialists and the departmental assistant manager point out that a number of training activity proposals can be laid out. Nevertheless, the TNA activity will

be useful for the HR professionals to collect information on other organizational challenges such as workload share, remuneration, etc. This information will be shared with the manager or the business partner. It is essential for HR professionals to distinguish between these aspects and ensure that the proposal is

more comprehensive and of greater utility as a result of encompassing not only the activities to encourage performance, but also those connected to other human resource management processes.

The outcomes that can be addressed through training should initially be

preliminary as it is likely they will need modifications based on the validators (business partner and department manager) observations. In keeping with what is put forth by the assistant training manager and after merging the various inputs, the conclusions must be analyzed together with the internal client so they

can determine which skills or knowledge sets should be improved to support the strategic challenges of the client's department.

Training plan

6.1. Input collection stage

Human resource management assessment results According to the agreed upon assessment process, it is suggested that the OD assistant manager provide the training department with a comprehensive report for each one of its client departments. This report should have the

perspective/profile outlined in Figure 1.

Figure 1. Explanatory framework of the collected data recorded in the TNA instrument on human resource management assessments

The HR professionals will have clear, standardized information on the results obtained in various bank departments. They will be able to easily visualize the

net result and gaps for each competency/aspect looked at in the Performance and Bottom-up Assessments made by employees as well as in the aggregate according to hierarchy and functional area. This information is presented to the line manager who then includes additional people known to be in need of

training. Lastly, the results of the Engagement Assessment are added to the report, although this information does not evaluate items that can be dealt with through training which means it will not form part of the training goals.

A group comprised of pertinent HR managers and assistant managers was

established to determine which results should be focused on and what the training stage should address in terms of the lowest three competencies uncovered in the Performance and/or the Bottom-up Assessment. It is also important to systematically analyze whether or not all staff members identified

as presenting gaps were important for determining if the training activities would have an impact on human resource management metrics, and to what

degree the results in the following year would be improved for the selected

competencies or aspects.

Guideline for data collection with key actors In accordance with the TNA process proposal, once the assessment information and the report on the training plan from the previous year have been analyzed, it

is important to hold a data collection meeting with the BP or personnel manager of the department. Guidelines have been drawn up to help align each actor with their discourse and knowledge about the present situation of each functional area of the bank. It also provides them with important information for predicting

potential issues that the line manager may point out and to prepare possible responses in the event that the budget is constrained, the guidelines indicate that the issues cannot be handled through training or they do not respond to HR policies. The guidelines contain questions for advance investigation of the

strategic goals and whether or not any training needs have been discovered over the course of the year along with the information source, or if there is any pertinent background information to consider prior to meeting with the line managers.

Once this information has been analyzed, the proposed training areas shall be validated together with the line manager. A guide for this purpose is proposed in Figure 2.

Figure 2. Data collection guide to use with the line manager

The proposed guide is broken down into three categories. Each one contains a series of questions that have to be answered in order, moving from general to

specific. The questions included in this section have been adapted by following the approach taken by McArdle (2010) for conducting an analysis of goals and

goals). In the event one of the factors is evaluated poorly, the HR professional

must investigate the causes the result in such an assessment level to pursue the corresponding modifications. All of this is done with the aim of ensuring consensus among the various stakeholders concerning the training needs, as this is one of the central goals of the entire TNA process (Rothwell & Kazanas,

2008).

6.3. HR needs chart Lastly, an HR needs chart is proposed based on the data collected with the individuals involved. The purpose is to distinguish between the items that can be

handled through training and those that pertain to other HR processes. This chart is intended to assist with the poor practices of many organizations that seek solutions to various organizational performance shortcomings through training, without a proper consideration of other tools, that through an informed and

realistic scope, aid towards deciding what type of intervention applies best (Tziner y Birati, 2015). The chart breaks down two types of factors and identifies which level they belong to (divisions/areas or individuals), categories encompassed by each factor, and lastly, possible contents for each category, as is

shown in Figure 4:

Figure 4. HR needs chart

The performance preparation factors were incorporated using Stone's (2009) proposal, whereas Sanders (2001; in Franklin, 2006) formulated the contextual factors for the hygienic elements that must be present at the individual level to ensure effective training. The goal is the same, but with a management

perspective in which human resources plays a principal role.

The HR professionals are responsible for creating a brief report of the needs

uncovered in the TNA process so that it can be provided to the HR staff tasked with working on these gaps. The information is pertinent background data for effective management of the value proposition of human resources. This also feeds into other human resource management processes such as well-being,

organizational development, recruitment and selection, compensation and more.

7. Conclusions The TNA proposal can be constituted as a process that adds value to the organization generally and to human resource management specifically. This is

due to the needs diagnostics improvements and standardizations when the organizational strategic and management goals are formulated as the centerpiece of gap detection. The proposal also seeks to respond to potentials and limits put forth by the interviewees. It should avoid being a burden to the professionals in

charge of the process or being isolated from the specific needs and realities of the company. The methodological utility of the proposal is noteworthy, as it uses aspects of business analytics to systematize the available information and rationally optimize the resources.

Applying the referenced authors’ theoretical and methodological approaches to a concrete process and tool underscores the relevance of the proposal. They help to clearly identify the inputs required by the process, the participant actors and

validators, and the outputs necessary to make an optimal execution of the phases of design, implementation and assessment of the training programs and initiatives more feasible. Specifically, the inclusion of the factors proposed by Barbazette (2006) stand out with respect to the questions the TNA should

respond to by following a clear logic that helps link data collection to the corresponding answers. Furthermore, the proposal uses the three levels of data analysis of McArdle (2010). It also translates the five sub-stages of Stone (2009) into concrete measures to be taken by HR professionals, not only in identifying

training needs, but also identifying hygienic factors that must be present and those collected aspects that pertain to other HR areas.

Lastly, some possible lines of research include implementation of the formulated

proposal, analyzing its effective impact on resource optimization, manager satisfaction with the TNA process and improvements in human resource management assessment results.

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