How to manage the growth of your staff ?Experience from CEE

Agata Szostek

Microfinance consultant

Functions of Human Resource Management

1. Human Resource Planning

2. Human Resource Policies

3. Recruitment and Selection

4. Salary, Benefits and Incentives

5. Performance Management

6. Training and Development

Human Resources Development issues of the MFIs in CEE (in the past)

Lack of HR function in the institution– Lack of staff capacity (training)– Lack of professional staff performance

management– Hiring processes not aligned with the strategic

goals of the institution– Staff incentive systems non existent or not

supporting the strategy

What are the current main issues of HDR in the CEE region?

HR function/manager not always recognized for its importance in planning institutional development

Poor alignment of systems with strategy Lack of appropriate attention to staff

development Lack of succession plans

What are the best staff incentives in place?

Fair , transparent, simple and achievable! SIS should be appropriate to the institutional

culture and support the stage of development of the institution

Introduction of SIS in the CEE

Implementation of SIS in number of years after birth of MFI

0%

5%

10%

15%

20%

25%

30%

0 1 2 3 4 5 6 7 8 9 10

Number of years

% o

f re

sponden

ts

Reasons for introducing SIS

Solving operational problems Following competitors who have already

introduced SIS Pressure from staff - as a result of their

feedback Attendance at a SIS training course Findings of an external consultant

Who receives bonuses?

Staff eligible for incentive payments

0

10

20

30

40

50

60

Only Loan Officers Only Support Staff Other Loan Officers andSupport Staff

Type of staff

Per

centa

ge

of re

sponden

ts

Indicators for SIS used in the CEE

QUANTITATIVE FINANCIAL:Loan size, type of loan and at risk loan: • Average portfolio size • Number of accounts served• Number of loans disbursed per month• Number of loans written off / Delinquency rate• Number of new loans• Portfolio quality• Portfolio size   Clients:•  Client drop out• Client retention rate• Number of clients• Number of new clients• Number of repeated clients    

Indicators for SIS

QUANTITATIVE FINANCIAL:   Branch Office Performance:• Income level of branch• Sustainability / profitability of branch    QUALITATIVE  Staff performance:  • Increased productivity per loan officer• Overall performance of admin staff  • Quality of work  • Team spirit     Outreach  • Number of jobs created / sustained • Number of women clients• Number of invalid, refugee and displaced clients • Type of clients • Income level of clients 

Indicators for SIS in the CEE

Overall lack of indicators supporting the social mission of the institution!

HRD alignment with the strategy

HR systems:– Hiring– Training (in this induction)– Staff performance evaluation– Staff Incentive Systems

Should be aligned with the overall strategy of the institution.

The role of networks in supporting staff development

The role of MFC as a training provider was crucial in the first 10 years of microfinance development in the Region and still continues– Specifics of microfinance should be addressed in

specialized courses (MFC trained over 4000 participants!) and consulting missions.

– Best practices should be promoted, experiences shared within the region

Recommendations for European programs

Without the growth of the programs microfinance will not have any impact at all

The main resource needed for growth is staff! It is essential to start building the capacity of your

staff from early on! HR function is necessary for the planned

development of your staff to have:The right number of people

With the right attitude and skillsIn the right place At the right time