The world of financial services is on the cusp of the next wave of disruption. As the need for digitisation takes hold across the sector, financial organisations are working hard to update legacy systems and improve operating effectiveness and customer experience.
Not only will financial organisations need to employ significantly more technology expertise over the coming years, they will also need leaders who can manage change effectively. To accommodate that change, they need to adjust their talent and business strategies—and do so cost-effectively.
Ever-widening skills gap
Attracting and retaining the best people – essential for successfully competing and innovating in this increasingly digital environment – is further complicated by the fact that financial organisations are no longer just fighting for skilled people with traditional sector rivals, but also against technology firms and startups.
Talent supply problems remain acute in the financial services sector, with the skills gap in the finance industry continuously widening. Key strategic initiatives are at risk of delay or cancellation because the right people aren’t available for execution.
This, in large part, was – and still is – being driven by the increasing capabilities of digital technology and the emergence of new roles in finance, such as data scientist, and AI and software engineers. Unfortunately, however, there just aren’t enough developers or data scientists out there who are well-versed in finance, and vice versa.
Some commentators have suggested that repairing the reputation of the financial sector could help decrease the skills gap and bring in more qualified talent and that because of developments in recent years, trust in this sector has diminished considerably. People have grown more sceptical towards banking and financial services companies.
Many organisations – particularly in banking – have lost popularity since the economic downturn, putting off newly-qualified graduates from pursuing a career in finance. It is important that businesses in this sector build trust if they are to attract and retain new clients and talent. Compliance is central to this, and companies in the sector are working hard to keep up with all the new regulations.
‘Integrity’, ‘customer focus’ and ‘risk management’ are examples of values that are often prioritised in the branding, communications and internal processes of organisations working in this sector today. Exhibiting these behaviours is key, and selecting leaders, managers and employees that demonstrate them is going to be fundamental to the success of the industry.
Shortage of mid-tier candidates
Talent shortages persist not just at entry levels. There is also a shortage of mid-career candidates.
The financial crisis of 2008 and the low economic years that followed caused many people to leave the financial services industry, meaning there are fewer mid- and upper-level professionals in the financial services job market today. However, these candidates are now in high demand as the economy has since improved, boosting confidence and growth in the industry.
It may be possible for financial services recruiters to attract talented professionals who have gained experience in payroll, accounts receivable, and accounts payable in other sectors if they strategise correctly.
Succession planning
Succession planning is about business continuity and mitigating organisational risk. But, in many financial services firms, leadership development is either non-existent or it’s an exercise in box-ticking.
The risks of dysfunctional leadership are not just bad publicity and damaged brands, but real monetary costs.
Formal management of succession programmes are lacking. Leadership development programmes out of synch with talent assessments. These can provide leaders with a focus for their development, by identifying any gaps in the desired skills and traits.
Building a ready pool of future leaders will reduce the risk of critical positions going unfilled. However, caution needs to be applied here. What makes someone successful in one role does not necessarily translate to the next rung up the leadership ladder. So you need to be clear on what specific competencies and qualities you want to assess.
In today’s organisations, assessment now has a value beyond recruitment. It’s not just about maximising the person-job match and minimising the risk of early attrition or the expense of making a bad hire. Assessments – and the resultant data – can transform your talent management practices and resolve your top HR challenges. The procurement decision for assessment has never been more important.
Shifting demographics
Demographic shifts such as an ageing population influence the demand for financial services and consequently the skills or competencies needed for success in the market. As in all sectors, the banking and finance industries will begin to find generation Z entering their workforces, which means four generations will be interacting in the workplace.
Managers will need to be equipped to understand how to facilitate harmonious relations between these groups. In addition, they will need to know how to manage the younger generations, whose motives and values may be different to their older colleagues. In particular, their planned timescale for staying with a company may be very different to that of more mature employees.
Another interesting demographic change has been influenced by the way in which technology allows people to work and collaborate from a distance. This means that virtual teams can operate, hire and train people from disparate parts of the world, pulling in the skills they need internationally. This adds a multi-cultural component to the interesting dynamics of an already multi-generational workforce.
Nurturing employee experience
As top tech talent and qualified financial services professionals become increasingly hard to find, jobseekers in this market have the pick of the litter. Though financial services jobs often offer market-leading pay, as this may not be enough to attract and retain the scarce talent that’s available.
In addition, the situation puts talent in a position of power, and financial services organisations can expect lengthy salary and benefits negotiations to ensue in the battle for the best candidates.
To remain competitive, starting salaries and bonus opportunities need to be extremely attractive, but beyond monetary benefits, value needs to be added to the job offer by creating and highlighting a great company culture. Providing things like employee wellness programs, team building events, and professional development workshops can all make your organisation stand out from the rest.
As people’s work and personal lives become more intertwined than ever before, there has been an increased expectation that the companies we work for have our shared values.
Successive surveys show millennials would take a pay cut in order to work at a company whose values they feel are in tune with their own, unlike the vast majority of ‘baby boomers’. Professionals are today proudest to work at companies that promote work-life balance and flexibility, and that one of the top reasons workers say they would stay at their company for the next five years is benefits, such as having access to paid time off, parental leave, and health insurance.
The importance of aligning business and talent management strategy is also important in employee retention strategies. Professional development opportunities should be provided to both create more knowledgeable employees and increase an employee’s investment in their financial services career.
Need assistance?
DavidsonMorris are established advisers to the financial services sector. As employer solutions lawyers, we work with tech companies to support with their full people requirements including human resource consultancy, immigration & employment legal advice and global mobility expertise.
We understand the commercial and legal challenges facing businesses in the sector, and work to support our clients in meeting their people management and planning needs while reducing legal risk exposure. Contact our finance sector specialists today.
Last updated: 2nd January 2020
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals