How Danske Bank Became one of The Largest Employers in Lithuaniaby Fintechnews Baltic November 6, 2019
Currently, Danske Bank employs 3,725 employees and the average salary is 2,500 euros.
The original interview was published in 15min.lt by Ernetas Naprys.
Danske Bank has created more jobs than the two major banks operating in the country taken together. According to the state social insurance fund (Sodra), it is the fifth largest employer in Lithuania paying the highest wages. Giedrius Dzekunskas, manager of Danske Bank IT Centre in Lithuania, remembers that the original intention was to hire 350 employees. “But jobs go to where they are done,” he said.
When you enter through the office door, you find yourself in a hipster temple – the vaulted ceiling is painted with images of bearded men or popular animation heroes. In the gym that is next to the entrance, a few employees ride bicycles or jog on treadmills in the afternoon. There is an impressive piece of equipment here – a golf simulator in which a computerised system follows the ball and allows to improve your technique. The office has all the attributes of the Western office: from coffee machines, table football, and computer games to comfortable couches for a short nap. As the bank’s representative showing us around says, the slogan is “make yourself feel at home” and the inspiration comes from such business giants as Facebook and Google.
According to social insurance data (the calculations were made in August), Danske was the fifth largest employer not far behind the Lithuanian Railways. This prompted to take a closer look at one of the largest employers in Lithuania. That is how we met Giedrius Dzekunskas, manager of Danske Bank IT Centre in Lithuania.
How did it happen that in a few years’ time you became one of the largest Lithuanian employers?
Five years ago, maintenance of all the infrastructures was outsourced to a third company. As is often the case, after some time the costs became too much of a burden and, most importantly, we were not satisfied with the quality we got. Outsourcing has its dark sides. The moment the contract is signed, interests start to differ. The customer expects a better service while the supplier seeks to optimize the price and maximize the profit. Therefore, the bank decided to relocate all its internal services: all servers, servicing, networks, technologies, end-user equipment, computers, conference equipment, etc; and a lot of engineers were required for this relocation.
The first iteration 5 years ago was that we need around 400 employees. In 7 months, we managed to achieve the targets in relation to the relocation. By the way, the main control centre of Danske Bank is in Lithuania. We not only relocated services and maintenance, but also development and responsibilities. This is perhaps the main difference from most companies, we would move responsibilities with functions instead of becoming just a regular service centre. Yes, there are global teams, sometimes they are mixed and work together. I myself have 8 virtual meetings per day.
When we moved functions, we agreed no matter how scary it would be for the managers responsible for certain areas, they would have to make decisions – not to move people, but move responsibilities. Originally, we planned to hire up to 400 employees and now we have more than 1,000 employees solely working with IT. It may sound banal, but jobs go to where they are done. Lithuanian talents do their job very well. Thus, automatically, if we want to employ new product or development, Lithuania is a super country for it. People here are very responsible, they form effective teams, they can work in an international environment, and they are very result oriented. Lithuania has a pool of excellent engineering talent.
What is the responsibility of your team and what functions do you perform in Lithuania?
There are two main areas: one is the Danske Bank infrastructure itself – all data centres, available servers. We have 14,000 servers in the bank, and the majority are monitored in Lithuania. We have created an internal cloud, which will soon become a hybrid cloud; the concept, development and maintenance in most cases are also done in Lithuania. A total of 80% of all network maintenance, from India to our London office, is carried out in Lithuania too. Mobile bank solutions are also developed in Lithuania. We have probably over 40 teams engaged in different projects and developing different banking products. We often work with colleagues from Denmark and India.
What challenges do you face, what causes you headaches?
Truly, the challenge is the fact that IT talents are the most desirable people across all markets. This causes very high staff turnover. If 8 years ago the staff turnover was 10%, which already seemed very high, today 20–25% is a new norm globally. In Lithuania economic climate is very positive and the employees are free to look for new positions where they would be most suitable, improve themselves and apply their knowledge best. I can say that currently, our staff turnover indicator is decreasing, and the trend is subsiding. Our turnover is perhaps 17%.
Does such a situation affect staff productivity and motivation?
First, whether I can see that my work is meaningful, whether my personal contribution has an impact on the result, and whether at the end of the day or month I have something to be happy about. Whether I feel appreciated. These are structural elements. Secondly, this is a young economy so naturally, we are eager to improve it, and people set particularly high standards for themselves. If they feel that they have not improved in one year in the same workplace, they start looking at what else they can do elsewhere. In the IT sector, this is particularly important, because the more you work and deepen your knowledge in one area, the more valuable you are. We, employers, are delighted if people decide to choose a career inside the company, perhaps in another team. We encourage mobility from one team to another, so that people could improve their knowledge in different fields, but in the same company.
Being a large company, we have a competitive advantage against others, and we try to maximise it. Over 35% of our new jobs are filled internally. An upward movement in the organisation is one of the ways to fill in the new positions. Except for young specialists, for this, we have created a student-employer program. We all know that in Lithuania third or even second year students have jobs. Majority of the students in the bachelor’s program are also working and those in the Master’s program usually already have three years’ of work experience. Since young people have huge needs, they usually study minimum and work maximum, thus, both the student and his studies suffer. So, we thought, why don’t we offer a program which would be socially responsible. Students can work 20-30 hours per week in our company, they can choose to do as much as they wish in order to have time for studies. We tell them: we don’t want you to work for the whole week. I think that they get sufficiently solid remuneration and can balance studies and work well.
If the staff turnover is 17%, then 170 IT specialists change over a year? Isn’t it the entire group of students in one year?
I look at it positively. I believe that such companies as Danske Bank nurture professionals, who leave and enter the market and create other, national products. This is the beauty of the ecosystem – yes, we train 70 high-level specialists in a year and they leave elsewhere to share their experiences.
Lately, you have been growing by 100 new staff members each month. How do your plans change? Will such growth continue?
At least in the IT field, we have probably reached stabilisation. The bank employs over 20,000 staff, of which 3,500 with IT of which 1,000 work in Lithuania, I think that it is a lot. I believe that we will grow by another 50-100 positions. 5 years ago, I thought we would have only 350–450 employees. I said it would be an excellent compact team when you still remember every second name and face.
Lithuania is not the cheapest country in terms of the cost perspective. India today is probably about 30% cheaper. But we do not compete in terms of costs. We compete in terms of quality and costs. Our efficiency and quality of work in decision-making process are very high. Are people able to assume responsibility, are they able to have the required knowledge, do they improve – these are the criteria when planning the expansion of the bank. More code for the same money means that we must make our part of infrastructure more efficient. For this reason, our engineers are building an internal cloud with all possible levels of automation. The virtual network, virtual servers and storage. When everything is virtual, we have more money for software development. Lithuania here contributes with its efficiency, technologies and costs.
How does the government treat one of the largest employers? Do you get enough attention, are your needs heard?
It would be better for the state if the government looked at investors through the prism of benefits to the state and economy. If we create and bring 50 million euros to the state budget, it is probably multiplied by 4-5 times, because all the money goes to consumption and new job creation. The state puts effort to communicate with investors and hear their needs. I think Invest Lithuania is one of the best public institutions with the purpose of attracting foreign direct investments, which I have seen from inside.
As far as you spoke, your strategy, it seems, differs from that of Barclays bank, which has left Lithuania?
I could not comment on the Barclays decision. We talk with our IT managers and they say that without Lithuania we would not have achieved what we have set to ourselves. Within 5 years we have moved almost all services from outside to inside. We have more quality code and a better market position in terms of product development. We can see both Lithuania and Denmark as a joint team working for the same company.
Perhaps you use Artificial Intelligence for it?
Yes, we are working with IBM Watson looking at how we could automate assistance to our people. We have been experimenting with AI for a few years now. We are doing very well in Lithuania.
Thank you for the conversation.