UNIVERSITY THEASAN BUSINESS GASE CENTRE NANYANG e TECHNOLOGICAL | Nanyang Business School ASIACASE.COM SINGAPORE REIMAGINING EMPLOYEE CENTRICITY: HBSP No.: NTU259 THE DIGITAL TRANSFORMATION OF Ref No.; ABCC-2020-005 HR FUNCTION AT DBS Date: 25 June 2020 Nigel Phang, Mou Xu and Sia Siew Kien ANEWHR DIGITAL STRATEGY ‘The years 2018 and 2019 had been monumental for DBS Bank, Southeast Asia's largest bank in terms of ‘assets. DBS had become the first bank to concurrently hold three global best bank awards: ‘World's Best Bank’ by Euromoney, ‘Global Bank of the Year’ by The Banker and “Best Bank in the World” by Global Finance. DBS had also been named “World's Best Digital Bank" by Euromoney for the second time since 2016. Euromoney lauded DBS as “an institution in which every part of the business ~ from cash management to private banking, fom small-to-medium enterprises (SMES) to retall-is being enriched by ‘a challenging process of digital disruptior ‘These awards were a recognition of the bank's steadfast digital transformation to compete in the digital age. Confronted with growing fintech threats as well as institutional constraints for organic expansion and -acquisition-led growth in the region, DBS embarked on a new phase of its digital transformation in 2015, with a renewed mission to leverage technology to ‘Make Banking Joyful”. "Live More, Bank Less’, its latest manifesto, captured this new vision of simple, effortiess banking for its customers. Its ambitious digital transformation to reinvent itself was grounded on three fundamental “philosophical shifts: to become digital to the core, to embed DBS in the customer journey, and to create a 28,000-person ‘start-up. Support from the bank's board was strong, with an annual technology budget commitment of USDE00 milion. In 2017, the bank also committed SGD20 million over five years on a broad-based programme to equip 10,000 Singapore-based employees with digital banking and technology skills? * Euromoney. (2018, duty 11). Wort’s best digital bank 2018. DBS. Euomoney website tps ew curomoney comvarticie lekaweryTV2sderd33s-est gta hank 2018 dbs?oopyightinfo=Ue * liam, A. (2017, August 21). DBS to invest $20m over ve years to ansfm 10,000 employees into "sigtal workioree™. The ‘Stra Times. hil Tem sratstimes combustiessbanking/ dbs to-nvest-20m-over-fve-years4o-transformts-10000- ‘employses:nto-datsl ‘Associate Professor Nigel Phang, Mou Xu, and Associate Professor Sia Siew Kien prepared this case based on interviews with DBS Bank. This case s intended for class discussion and learning, and not intended as source research ‘material, or as illustration of effective or ineffective management. ‘COPYRIGHT © 2020 Nanyang Technological University, Singapore. Alrights reserved. No part ofthis publication may be copied, stored, transmitted, altered, reproduced or distributed in any form or medium whatsoever without the writen ‘consent of Nanyang Technological University. ‘The Asian Business Case Centre, Nanyang Business School, Nanyang Technological University, 50 Nanyang Avenue, ‘Singapore 639798. E-mail: asiacasecentre@ntu.edu.sgme Having a strong people agenda was a fundamental lever to drive the tremendous change happening across the bank. One of the most important things they had to do was to focus on changing the culture into a start- up culture by encouraging agile behaviours through new ways of working, cultivating a growth mindset as learning organisation, embracing the focus on customer-centricity, using data to make better decisions, ‘and continuously experimenting to improve. Since 2012, DBS HR had embarked on its own digital transformation journey to create a joyful experience for its employees. There were four pillars that were fundamental in DBS’ HR digital strategy: (1) being employee-focused to create amazing experiences, (2) igitalising HR processes, (3) leveraging data for insights, and (4) driving continuous leaming, BEING EMPLOYEE- FOCUSED TO CREATE AMAZING EXPERIENCES. DBS positioned the value of all its people programmes and systems in a way that was meaningful to ‘employees. Anchored on the tenets of DBS’ employee value proposition — to live fulfilled and be the best. be the change and be the difference — the bank uses technology as an enabler to achieve desired outcomes that included increasing operational efficiency, optimising resources and creating amazing products and ‘exceptional employee experiences. ‘* Recruitment and Onboarding To attract talent with new digital skils, DBS had to scale up its recruitment efforts, such as sourcing for talents through new channels and methods. The recruitment process was substantially redesigned. Lee ‘Yan Hong, Head of DBS Group HR, said, We receive thousands of résumés, so the old way of screening Is Ineffective. Instead, we ask, ‘how do we use things like gamification, Al, and data analytics to screen better and faster? We ‘also explore other channels, including social medla, to open doors to newer and non-traditional talent pools. DBS HR introduced a neuroscience gamification assessment powered by arifcial inteligence (Al) in the bank's Management Associate Programme recruitment. This provided an additonal lens to assess cognitive ‘and behavioural traits. Candidates “played the game" and their results were used to match to the scores of ‘current and alumni MAS. This allowed DBS HR to look for cultural ft, thus increasing the probability of hiring ‘candidates that could succeed and contribute effectively to the organisation. DBS also launched Jim — or Jobs Inteligence Maestro ~ as the first vitual bank recruiter in Southeast Asia in June 2018. Developed in partnership with Singapore start-up impress.ai, Jim helped shortist potential ‘Wealth Planning Manager hires by automating the frst stage of the hiring process: conducting tasks such 28 pre-screening questions, psychometric profing assessments, and enquiries. It offered applicants a faster, more streamlined process, with real-time interaction avallable 24/7, while reducing 25% of the recruiters’ time so that they can focus on higher value areas of thelr job, Incliding sourcing for candidates ‘and interviewing applicants (see ink to video in Footnote 3) Time spent to screen candidates was reduced by 75%. With Jim guiding and prompting candidates along the way, the candidate journey saw improvement vith the drop-off rate n application reduced from 15% to 3%. In 2018, 71% of the Wealth Planning Manager ‘applicants used Jim inthe application process. Jim was $0 personable that some candidates even thanked slim and said goodbye to him at the end. DBS’ clear positioning as a digital bank attracted many talents seeking long-term growth prospects. Shiemi Lim joined DBS as a management associate. With a Master's degree from Columbia University, she chose Gartner @2017) Undergoing digital transformation: A case stay from DBS Bank CHRO Quarter * DBS. (2018, November 1). Creating Jim, SEA's ts vival bank reruter. nnovates, DBS wenste. Iitpsnanv.dbs.coninnovatonabs innovates/creating jm-seas frst vtual bank tecruternimlASIAC ASE. OM __________________ Page 3 Treen avanassCCeCenre ‘ABCC-2020-005 DBS because she wanted to be part of its transformation from an old, traditional bank to an organisation that was at the forefront ofthe digital age. 1 felt that with my skil set, | could make a greater difference in a bank that is going through this digital transformation. | can leverage my technical skills and be part of heir growth. And that gives ‘me a lot of satisfaction. The job allows me to be part of a core team. | can offer my suggestions, ‘and the ideas get implemented. To create a seamless digital experience from recruitment to onboarding, DBS HR redesigned the employee ‘onboarding process for new hires. The bank engaged new hires via a single platform, from the time they ‘signed the e-Ofter letter til their first day at work. Through an onboarding microsite, new hires could access: Information and resources that would help them assimilate into the bank. Toolkits were also made available ‘on the microsite for line managers and new hires’ buddies to support the new hires. DIGITALISING HR PROCESSES. In digitalising the HR processes, DBS examined the full employee lifecycle from recruitment to offboarding using human-centred methodology to identify opportunities for enhancement. The purpose was to enhance the empioyee journey and automate key processes that would free up employees’ capacity to provide high touch (1e., a commonly used phrase in the industry to mean taking a personal attention in customer service) ‘and more value-adding work. (See Figure 1 for HR Technology Map). Figure 1: HR Digital and Technology Map INVISIBLE BUT CONNECTED ‘Source: DBS ‘+ HR processes and channels DBS HR also enhanced its technology infrastructure and introduced new HR systems to enable self-service ‘and online processing of HR transactions. Employees could manage over 20 HR services on their own, ‘and managers could manage self-services empowered with access fo data and insights.Pages — ‘BCs 2020-008 eee Meanwhile, the HR technology infrastructure was migrated progressively towards a cloud platform. For DBS HR, the aim was to deliver 100% cioud-based HR solutions. In February 2019, DBS rolled out a new human capital management (HCM) system on the cloud, which integrated the existing different systems to form an allin-one platiorm for HR transactions. It vas a tremendous step forward in DBS’ cigtal strategy (see Figure 2 for HR Digital and Technology Roadmap) as the new HEM, branded as OBS People Hub, provided a one-stop portal for all HR transactions, from leave application, generating HR letters to Performance management and compensation matters. Figure 2: HR Digital Roadmap EXECUTING OUR DIGITAL & TECHNOLOGY ROADMAP ogacte bendy omc 9 Guat 9 9 ®&DBS ‘source: DBS: DBS HR also leveraged Al and robotics process automation (RPA) to streamline processes in HR and eliminate administrative and manual services. It rolled out 10 RPAs in 2018 in the benefit administrative areas, such as insurance invoice processing and recognition points redemption. This had improved the efficiency of processing time by more than 90% and reduced the average handling time by 87%. Furthermore, the processing of administrative tasks could be scheduled after office hours. These RPAS also reduced the amount of oversight and human errors and provided greater data accuracy. In 2018, DBS HR launched HIRI, an Al-powered employee chatbot that provided easy, instant, and personalised responses to HR matters 24/7. HiRi alleviated the load of routine transactions, such as ‘checking on leave balance, thus allowing HR teams to focus on more strategic interactions, such as providing career advice. It was one of four channels for employees to get in touch with HR: Click — click conto the intranet for information: Chat - chat with HIRI chatbot: Call ~ call the Ask HR hotline to speak to ‘someone; and Connect ~ connect and meet face-to-face with an HR Relationship Manager (see Figure 3 for the 4Cs). Six months into the launch of HIRI, there were mote than 11,000 log-ins and over 60,000 ‘conversations recorded.ASIACASE.COM. Page 8 fit Rake nian exe Con ‘aBe¢-2020-005 Figure 3: 4¢s, Get in touch with us tas ‘Bri Ses. DBS is serrodescom —ppemtment ‘source: DAS In addition, to foster a culture of appreciating others, DBS HR developed iTQ (I Thank You) in 2017, an online peer-to-peer recognition programme. Through this digital portal, every employee was credited with 2,000 TQ points in their ITQ account and could give 100 points each time to anyone they wished to say thank you to. They accompanied each gift with a personalised message. LEVERAGING DATA FOR INSIGHTS. We've gone beyond reporting to using data to gather insights, make predictions, and prescribe ‘meaningful change. For example, our Human Capital Analytics team has developed models to predict early attrition and identity top traits of high performers to understand what drives productivity. We've tured insights into action and are working with managers to introduce ‘appropriate interventions and reduce attrition. Our recruiters also use insights on tats of high ‘performers to redesign the hiring process, including the way we interview candidates. ‘Lee Yan Hong, Head of Group HR at DBS In 2016, DBS HR formed a Human Capital Analytics (HCA) team. Focusing on recruitment, retention, and productivity, they used data analytics to help both the business and HR gain stronger insights to make better decisions, improve productivity and mitigate risks. An effective use case of HCA was in reducing the chum rate of relationship managers (RMs). DBS HR buit an analytical model to Identity RMs who were at risk of leaving the bank. The model examined critical Indicators drawn from employee records, including employees’ profiles, milestone changes, work performance, and data on days of leave taken. DBS HR would highlight results indicative of possible attrition to line managers for more proactive action to reduce attrition. The back-testing results showed that managers who proactively used the high-risk attrition report to engage employees yielded two times retention success than managers who took no action, Extracting useful insights required the HCA team to work with other business units (BUs). For example, the attrition model relied on 200 input factors out of about 600 variables the HCA team had identified for analytics. Some of these factors came from BUs. At the same time, the HCA team would need to collaborate with the bank's central data team. The central data team provided the overall governance on the bank’s data architecture but data teams in units had autonomy for their specific analytical needs. See Notespe Sitewon ASIACASE.COM DRIVING CONTINUOUS LEARNING To bulld a 28,000-person start-up, DBS believed that its people had to cultivate digital mindsets and ‘embrace innovation. With the aim of becoming a learning organisation, DBS heavily invested into having the right platform, tools, and programmes to support different learning styles and promote skills needed for the future. This also included reskiling and upskiling its people, some of whom had been with the bank for ‘over 30 years. In August 2017 DBS announced they were investing SGD20 million over five years in a broad-based programme to skill their 10,000 Singapore-based employees. The programme covered several initiatives — Akpowered e-leaming which could be accessed 24/7; experiential learning such as intrapreneur programmes and hackathons; grants and scholarships: and innovative learning spaces. DBS launched DBS Leaming Hub in 2017, an Al-powered e-learning platform that made learning easy and ‘simple. In addition to accessing Leaming Hub on the computer desktop, employees could access it anytime ‘and anywhere, and received recommended learning options to suit individual goals. DBS HR viewed Leaming Hub as a virtual university that complemented DBS Academy. Built in 2015, DBS Academy was a 40,000 square feet innovative learning centre where more than 10,000 training sessions were conducted each year. DBS also invested in corporate subscriptions for online learning which included Linkedin Leaming, Coursera, Plural Sight. and intuition Know-How. Linkedin Leaming was integrated with Leaming Hub to give its employees greater access to online courses and bite- sized learning. ‘The bank also created DigiFY, anew digital curriculum to bulld core digital skills in each and every employee. Employees leamt seven core digital skills: agile, data-driven, digital business models, digital ‘communications, digital technologies. journey thinking, and risk and control. Each core digital skill had three ‘competency levels. Physical space mattered too, DBS invested in agle and collaborative workspaces for employees. Through the Joyspace programme, tracitional offices were transformed into workspaces that fostered collaboration, inspired creativity and helped them to rethink the way to work and learn. Equipped with the latest digital tools, such as writable surfaces and video conferencing systems, designated areas and meeting rooms within spaces, employees are given the choice to work anywhere and with anyone. (see Figure 4).ASIACASE.COM. Page ft Bibtorantaeateeon ‘aBce-2020-005 Figure 4: HR Joyspace Source: DBS: ‘The thinking behind heavily investing in learning and development was the belief that the bank should carry people through the disruptive change. DBS HR proactively categorised the jobs at risk due to digital transformation and mapped out specific training to reskill people so that they could take on new roles. Bee Lay Png, who had been with DBS HR for 40 years, shared her experience having gone through cchanges due to the bank's transformation. It went from handling paper personne files when she frst started to managing the HR Contact Centre, which required her to use HiRi to complement HR services. She had to continually unieam and then relearn, picking up digital skls that seemed foreign to her., She reflected, We must learn to embrace change, and the learning was difficult but not impossible. Yes, we had ‘both long-serving colleagues and new hires who left because they could not adjust to the fast pace. Those who pressed on often came out feeling satisfied and learnt new skills. ‘A more recent example of HR innovation was ftom the recruitment team: they had developed the virtual recruiter Jim with limited tech experience. Dee Tan from the recruitment team signed up to create the chatbot from scratch. To quickly bring themselves up to speed, she and her team started to do thelr research on Al and related topics. They consulted other teams in DBS that had created chatbots, learning best practices from them. After selecting a start-up as a partner, work officially began in April 2017. Coupled ‘with the recruiters’ deep understanding of hiring practices to ensure the chatbot would meet both recruiters’ and candidates’ needs, together with the start-up's technological expertise, they worked together to help bring the chatbot to life. For the first few months, they worked on Jim's personaltty, wrote the chatbot script, and designed its interface. They would meet regularly, launch experiments, and finetune the script based on feedback. There was also the user interface and user experience testing. The transfer of knowledge had been valuable for the recruiters, many of whom could now call themselves chatbot coaches. The experience also taught them, to let go of certain views about recruitment and to consider how a bot might do things differently but better.pe Ewes ASIACASE.COM ‘Sor Cheng added: We are not here to automate and remove the jobs. Instead, we automate fo take away the ‘manual and mundane part ofthe job, and train people to become supervisors of vitual workers, ‘such as chatbots by having them acquire the necessary skills.° {In addition, internal mobility programmes were also designed to cater to employees who were eager to innovate and experiment with ideas. The DBS Xplore Programme allowed them to take up short-term projects from other departments throuigh an online platform. Within HR, the introduction of HR Break-a-thon ‘was an initiative to connect virtually with HR colleagues in the region to brainstorm and generate new ideas, land challenged HR colleagues to push the boundaries of HR processes and policies. ‘The cultural shift towards more risk-taking took Development Manager for Banking Credit Architecture programme, Liu Dapeng, by surprise when he joined the bank in 2017. Trained in computer engineering, he had only worked in small fms before DBS and was steeped in a start-up thinking. What he saw in DBS, however, was unexpected, People were open to embracing technology and wiling to change: This isa bank. There are alot of people and processes. But people can change. | am not referring to only the technology people, but also our business counterparts. This is the biggest surprise. 1 ‘came in as a software development guy and | did not expect to influence the business and work together with them. | think that is very refreshing. REIMAGINING EMPLOYEE CENTRICITY: LIVE FULFILLED ‘The various HR awards DBS has accumulated over recent years was a testimony to these transformation efforts. A recent 2019 employee engagement survey conducted by Kincentric, formerly a part of Aon Hevit, ‘found DBS to be the top of the class among peers. The bank was recognised by Kincentric as the “Best Employer in Asia Pacific” for inspiring strong commitment and superior performance from employees, driving business results through effective people practices, and managing the business in ways that build long-term success and sustainability” When asked about how HR supports DBS' digital transformation efforts, Lee Yan Hong, Head of Group HR, underscored the need to win both the “head and heart’. Often when organisations undertake digital transformations, they focus on winning the “head” through vision and data-driven processes. Equally, if not more important, is winning the “heart”. In the past couple of years, we have implemented many intiatives to win the hearts of employees. We want employees to feel valued, experience growth, progress, and have fun through this Joumey.® Her perspective certainly aligned well with the employee value proposition of DBS. We must ensure employees are aligned on this [transformation] journey by recognising and ‘appreciating thelr work and giving them opportunities to be the change and make the difference. In short, we must deliver on our EVP [employee value proposition) fo lives fulfled. Be the bast, ‘be the change, and be the ditference.® "Feedback meeting on 28 March 2019. * DBS. (2019) Hing and employee engagement. DBS website. itpshwaw dbs com/sustanabltylemployer-of-choteirng-and- ‘employee-engagemeidetaul page © See Notes © SeeNte 3.