The Impacts of Financial Variables on Employment Planning in Turkish Banking Sector

Abstract

Understanding investors' perception begins with questioning their position on risky assets and portfolio selection strategies in volatile market conditions. In banking sector, the performance of banks relies on operational and technical efficiency levels. In the last decade, stakeholders have been facing the dilemma of whether or not to deploy expensive employment programs with high quality personnel as the effects of these programs on banking performance have not been clearly examined in the literature. In this study, it is aimed to assess the role of financial and non-financial factors on employment programs which contribute to the banking efficiency and performance. Within this scope, the analysis conducts with the annual data for the periods between 1988 and 2015 is tested by using logit model for three different groups of Turkish banks based on ownership structure. Empirical findings demonstrate that (1) internal variables are more significant than the external variables in employment programs of these banks, (2) with respect to state-owned banks, it is identified that higher non-interest income affects the employment decision positively, (3) private banks prefer to have fewer employees in case of any decrease in the total loans amount and (4) financial variables are influential for these banking groups to increase or decrease the number of personnel.