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1 – 7 of 7Mario Testa, Antonio D'Amato, Gurmeet Singh and Giuseppe Festa
This paper aims to investigate the relationship between employee training and bank risk to verify whether and to what extent an increase in employee training, as a soft component…
Abstract
Purpose
This paper aims to investigate the relationship between employee training and bank risk to verify whether and to what extent an increase in employee training, as a soft component of total quality management (TQM), affects bank risk.
Design/methodology/approach
The research adopts a panel regression, based on a unique dataset of a sample of Italian banks over the period 2011–2018, to test whether employee training affects bank risk, measured alternatively in terms of Z-score, a proxy of bank stability and non-performing loans (NPLs)/gross loans ratio as a proxy of credit risk.
Findings
Research findings reveal that increasing employee training leads to growing bank stability. In contrast, credit risk is not affected by employee training. However, by investigating training heterogeneity, this study found that the increase in the number of managerial training hours, as a proxy for soft skills training, negatively impacts credit risk. Therefore, an increase in soft skills leads to a reduction in bank credit risk.
Research limitations/implications
This study provides empirical evidence in support of the relationship between employee training and bank risk, which seems novel in the literature. From a managerial point of view, this study highlights the need for banks to pay attention to the skills, particularly soft skills, that banks' employees must possess to effectively manage bank risk and, more specifically, the core bank risk.
Originality/value
Empirical evidence on the relationship between employee training, soft/hard skills and bank risk appears limited if not absent. Therefore, the findings provide insights for a more nuanced interpretation of variables that affect bank risk.
Details
Keywords
Alba Yela Aránega, Alberto Ferraris, Gabriele Baima and Stefano Bresciani