A pinstripe suit and a job on Wall Street are historically regarded as markers of success for many college grads. But these days, the banking sector may not hold the same shine as the cutting edge world of tech. Compounded by the nationwide skills shortage, banks and other institutions that make up the financial services (finserv) industry sometimes struggle with attracting and retaining top talent.
To win the battle for talent, finserv must adopt an age-old adage: If you can’t beat them, join them.
In other words, finserv companies will gain an edge in the battle for talent by leveraging the same attributes that draw workers to tech.
Recruitment Problems: Money Isn’t Everything
Just like other industries, the banking sector is struggling to fill jobs amid the global talent shortage. As reported in “Banking and Capital Markets Trends 2019” by PwC, more than 60 percent of the banking CEOs surveyed believe it’s become more difficult to hire workers in their industry.
Reputation damage is one hurdle, according to PwC. Between the financial crisis of 2008 and negative headlines about ethical missteps, finserv has been wrestling with an image problem. It’s affecting the recruitment of the next generation of workers to finserv—and giving the edge to industries like tech.
“As financial services organizations compete for talent with industries that are seen as more cutting-edge, a huge amount of work is needed to strengthen the underlying employer value proposition,” says Russ Riggen, partner, financial services at PwC.
Just take a look at the MBA talent pipeline. At many business schools, tech either surpasses or lands among the top contenders—consulting and financial services—for jobs after getting an MBA. Consider the 2018 class of Haas School of Business University of California Berkeley: 32 percent landed jobs in the technology sector, followed by 24 percent in consulting, and 17 percent in financial services.
Today’s finserv professionals want to be associated with brands that are making a difference.
This recruitment problem presents some serious challenges. For one, the finserv sector is realizing that workforce talent—a combination of skills and personal experiences—plays a significant role in an organization’s ability to innovate.
As the PwC report puts it: “People—not systems—drive innovation and help realize its full commercial potential.”
“As industry disruption accelerates, the skills in highest demand evolve and talent expectations become harder to meet, the need for a more fundamental rethinking of the FS (financial services) talent sector can’t be put off any longer,” says Riggen.
Gaining an Edge in the Talent Battle
So how do banks improve how they recruit and retain the talent necessary to move their organization forward? It starts by letting go of some of the talent tactics that banks, well, banked on in the past, including the promise of big money. While the banking industry is known for high earnings and social prestige, in recent years, the average starting salaries for MBA grads in tech and the financial services only differ by a few thousand dollars: $116,526 and $118,585, respectively, according to U.S. World News & Report.
So, again, as they say: If you can’t beat them, join them. As the competition for talent heats up, finserv institutions must align their company brand with some of the philosophies that have been popular in the tech sector, such as work-life balance and social ideals. Here’s a look at the non-financial benefits that help attract prospective employees to tech, and how banks can leverage those qualities.
Stand for Something
Being a “purpose-driven” company may sound like a feel-good buzzword, but qualified and innovative candidates tend to gravitate toward workplaces where company values and purpose are top of mind. Tech is generally known for turning purpose into a selling point for employee prospects.
According to PwC’s 2019 report on “Financial Services Talent Trends”, finserv “has been slower than other major industries to respond to priorities involving the people experience. These priorities include autonomy and work-life balance as well as demands for greater meaning in work and diversity in the workplace.”
But the digital transformation movement is sparking a fresh wave of innovation, pushing the finserv firms to demonstrate how their organizations make a difference, including via new types of offerings for customers.
“FS (financial services) organizations are keen to reassert their vital role within communities and economies,” advises Riggen. “The two goals of building trust and profitability can and should be mutually supportive.”
For example, products such as financial wellness platforms, and life insurance offerings that incorporate wellness plans as incentives, are among the ways finserv companies are showing how their customers’ welfare and outcomes are an industry priority. Today’s finserv professionals want to be associated with brands that are making a difference.
Emphasize Career Growth
According to PwC’s “Financial Services Talent Trends 2019” report, finserv companies have historically obtained highly skilled workers by hiring people away from competitors, said PwC. But the skills shortage has made all industries, including financial services, rethink their talent pipelines.
In-house retraining and upskilling is the primary tactic for finserv CEOs to close the skills gap within their organizations, PwC researchers found. Banks can leverage in-house development as a recruiting tool since training and career progression are top workplace benefits desired by millennial job seekers.
Many prospective employees consider technology as an important factor when considering a company.
For example, in Singapore, education and policy institutions created “transformation maps” of various industries, including financial services, that highlight needed skills as well as less relevant ones in the next 10 years, according to PwC. Finserv firms are also developing programs that match up employees’ existing skills and career aspirations to future needs in the business, such as helping bank tellers transfer to roles that utilize emerging technologies.
“It’s important to ensure that people coming out of full-time education have work-ready skills, but also that they have increasing opportunities to refresh their capabilities throughout their working lives,” write the PwC report’s authors.
If there’s one thing that comes to mind about the next generation of workers, it’s their tech savviness. Many prospective employees consider technology as an important factor when considering a company. Finserv companies must show potential talent how technology is being used to enhance the employee experience, including how they manage their careers and benefits, learn on the job, find mentors, experts, new opportunities, and more.
The eagerness to work with technology appears to align with the tipping point that’s happening in banking. Firms are replacing legacy systems, and along with it, they’re also evaluating how cutting-edge technology—such as artificial intelligence, machine learning, and automation—will affect their business processes. Banks should leverage this transition as a recruiting tool where prospective employees get the opportunity to be at the forefront of transformation in banking.
Highly skilled workers are crucial to business growth and innovation. Finserv is competing for workers with other industries that may be seen as more disruptive, so it must do more to attract top talent. Career development, a sense of purpose, and opportunities to leverage technology are just some of the workplace qualities sought by the next generation of workers. Showing how these qualities thrive in the financial services industry is the edge that banks need to win the battle for talent.