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From a global pandemic, inflation, war, rising interest rates, supply chain disruptions, and more, the market has seen an unprecedented time of instability. Despite this, the global finance industry still showed strong revenue growth, reaching a 14-year high in profitability in 2022.
However, new data suggested that the banking and financial sectors have had a pretty bumpy start this year. The high-profile bank failures, rocky global stock markets and rising bond yields have shaken the confidence of people in these sectors. The dearth for talent in the banking industry and the high employee turnovers has posed a serious problem for the banking hiring managers. If the financial sector does not up its game, it is going to be a tough road ahead for them.
Of course, you cannot control the global economy, but what you can do is work on your talent acquisition strategies. By recruiting and retaining better talent, you can still stay ahead of the competition.
Financial institutions must rethink the way they are attracting, recruiting, and retaining talent. They need to have a future back approach to talent management that focuses on talent they need for the next 5 to 10 years.
The Present Situation- Challenges faced by the Banking Industry
The economic downturn coupled with the big layoffs wave among fintech, and big tech companies has been tempering the “Great Resignation” of 2022, but not the banks. According to a study by Cornerstone Advisors, nearly 9 out of 10 banks are still struggling to hire fresh staff or retain their current employees.
But the layoffs from the FAANG (Facebook, Amazon, Apple, Netflix, Google), should have provided ample number of employees to fill job openings in financial services and the banking sector must have snapped up this talent, isn’t it?
A Forrester Research even suggested that worried fintech engineers, data scientists and others will look at employment offers from banks that suddenly look more stable than their own firms. But if that was really true, why didn’t they choose to go with banking roles to start with?
- They were looking for a more entrepreneurial, alive environment
- They were looking for an opportunity to make quick money.
And the reality is, banks cannot offer either of the rewards.
Lack of skilled finance professionals
Believe it or not, there are not enough banking professionals to fill the open positions. To make the situation even more challenging, the Bureau of Labor Statistics has projected that employment in business and financial occupations will see a growth of about seven percent between 2021 and 2031, resulting in about 715,100 new jobs over the decade.
And mind you, these are new jobs that will be arising due to the growth. If we factor in who leave their roles and need replacement, you are looking at nearly a million (980,200) openings yearly.
Failing to offer job security
A Randstad study showed that economic and job security were top priority for majority of workers. Around 52% stated that they were worried about their job security given the economic uncertainty and 37% of them were concerned about getting laid off.
Competition for talent
The advancement of digital transformation spruced up the competition for new tech positions in most industries including the banking and financial services. Along with financial knowledge, employees with the right skill and have a fair amount of digital knowledge are more sought after by leaders.
Curate the right team by focussing on Creative Recruitment strategies
For financial institutions, people are the biggest assets. To ensure a strong, able workforce, you need to upskill your existing workforce and produce innovative ideas to attract new talent.
Some of the best practices financial institutions should incorporate in order to not just find the best talent but retain them as well.
Implement early career, internship programs
Skill shortages is one of the most critical problems that need to be addressed in the financial services sector. You can start by exploring partnerships and internship opportunities with universities and institutions to teach skills that you would specifically require for a particular role in your organization. Whether you are hosting remote, hybrid or in-person programs, job seekers look for companies that pro-actively provide opportunities and genuinely invest in employee wellbeing.
Build a strong employer brand
To attract top talent, you need a strong employer brand. To achieve this, you can
- Highlight your organization’s values, culture, and opportunities for growth
- Invest in employer branding initiatives- create a kickass careers page, leverage social media platforms, participate in industry.
Remember, the goal is to increase visibility to attract the best of the talent pool
Support flexible working
The global World Economic Forum’s Future Jobs Report 2023 which surveyed 803 companies, 11.3 million employees across 27 industries and 45 worldwide economies, found that “83% of workers prioritise flexible hours, and 71% prioritise flexible locations. On top of this, 35% say that poor work-life balance and burnout would prompt them to leave their job” (World Economic Forum: Future Jobs Report 2023).
Financial services can be demanding and stressful, so it is important for businesses in this sector to implement strategies that support their employees’ work-life balance.
Some ways businesses can continue to support their employees in achieving a better work-life balance:
- Establish clear expectations and boundaries around workloads, deadlines, and work hours to aid employees with effective time management.
- Promote flexible working as ‘the norm’ and build a culture of trust and empowerment to support people’s ownership of work and lifestyle commitments.
- Encourage employees to take regular breaks and time off to recharge their batteries, whether that’s holiday leave or time off in loo.
- Prioritise mental health and wellbeing by offering and providing clear communications around available resources and support programmes.
- Promote healthy habits like exercise, healthy eating, and adequate sleep to help employees maintain their physical and mental health.
American Eagle’s work from home (WFH) policy became the industry standard as nearly two-thirds of the financial institutions now have a hybrid policy where the staff splits their time between working from home and at the office.
Source: Cornerstone Advisors
Offer professional career development pathways
One of the most effective methods of employee retention is the offering career development pathways. Training, mentoring, and coaching is key to attracting potential employees and boosting workforce engagement, retention, and productivity.
In a study by Finextra, an independent newswire and also an information source for the fintech community surveyed and found that “90% stated that development was essential for a job and 40% of employees who weren’t presented with opportunities for development in their organisation left their position within five years” (Finextra: Why Continuing Professional Development is key for Financial Services).
With changing financial regulations, new legislations and governance models, training and professional is even more essential for those working across Financial Services.
Offer a strong benefits package including financial support for studying
Providing a competitive benefits package is essential for attracting and retaining top talent. A strong benefits package, including financial support for studying, will hugely benefit the employee and business. Including a financial allowance for personal study, whether that is learning a specific discipline, life skill or leadership quality, is becoming incredibly important to professionals, as people look to enhance their employability and skillsets.
As of 2023, the top benefits offered by Financial Services organisations are:
Financial support for studying, Life Insurance, Equipment for remote working, Pension contributions and Health Insurance.
Additionally, a competitive benefits package should go hand-in-hand with professional development in that the former equips an employee with the best toolkit possible for excelling in the latter.
Develop shared values, diversify the workforce to attract new employees
Corporate values matter. Research found that around (54%) of workers would quit if they did not feel they belonged at their company, while 42 percent said they would not take a job if the company’s values did not align with their personal ones.
Create an employee value proposition that appeals to today’s socially conscious workforce.
You can start by
- actively promoting your commitments to diversity, equity, and inclusion
- leaning into value-driven and profitable fields like clean energy, financial inclusion, and community investment.
Win the talent war in Finance
Attracting new talent in the financial services industry is a dynamic and evolving process. Organizations that embrace change, embrace diversity, and adapt their strategies to align with the ever-shifting demands of the talent market will position themselves as employers of choice. In doing so, they will not only attract top talent but also create a foundation for long-term success and innovation in the fast-paced world of financial services.
