September 14, 2022
An increasing push toward digitization — as well as the pandemic’s disruptive effect on standard operating models — has moved banks closer to the fintech industry. While this shift can lead to exciting opportunities for financial institutions, it also introduces a new challenge: staffing.
“Employers across all industries, including banks, are facing a new digital reality,” says Patrick Connell, lead of the McLagan global banking consulting practice at Aon. “They need employees to not only have more advanced technical skill sets, but also be more flexible and open to continuous change.”
As the industry continues to grow, it is important for financial institutions to be agile and receptive to shifting trends in business and technology. Banks now compete with a broader set of peers including technology companies, FinTech and technology roles in the general industry. This presents a new set of operational risks.
Banks can stay ahead of the curve in one area of operational risk by building a strong, capable base of digital talent.
When seeking this new talent, financial institutions must account for industry-specific variables and recruiting approaches to put themselves in a competitive position with fintech companies and other banks.
Practical Issues with Staffing
With the shift toward remote work and the Great Resignation, organizations looking to recruit new staff must operate on different assumptions than has been classically applicable. Companies must now be aware of technology’s inextricable ties to the modern workforce and what that means from a risk perspective.
“A bank’s cyber footprint has expanded,” says Joel Sulkes, global financial institution practice leader at Aon. “Companies need to know that their vulnerability to their network being compromised — and security issues related to hybrid working — has clearly grown.”
Companies must also consider the current economic climate and developing circumstances that may affect the workforce.
“Since the pandemic, some of the leverage has shifted toward the employees,” says Sulkes. “But as we potentially shift into a recessionary environment, what will happen to that leverage? Does it go back to the employer?”
Technology and the Trouble with Talent
Part of the challenge for banks in bringing on technologically capable employees is that they often must compete with technology companies for the same staff.
“Banks are in need of attracting engineers and technology and data scientists, and they need to create an environment for those types of employees that can compete with tech companies,” says Sulkes. “There’s a bit of a battle going on between legacy finance and big tech.”
In a competitive hiring environment, fintech may have an advantage over banks. Many employees have left legacy finance companies to join fintech organizations and more are projected to do so in the future.
Attracting the Right Talent
Though attracting tech-capable employees may be a challenge, there are concrete steps companies can take to make their workplaces more welcoming to potential hires.
Many conventional principles of making a job compelling to potential employees still apply in today’s changing workplaces. Connell outlines four suggestions for employers as they continue to build their teams:
• Make sure the total rewards program is competitive and aligns with the needs of a changing workforce.
• Establish a job architecture that provides transparency of career path/development.
• Provide learning and development opportunities to employees so that they may realize their aspirations.
• Invest in employees’ wellbeing — physical, financial and mental. Most banks already have solid retirement, health and benefit programs, but employers can find opportunities in helping employees maximize the value of these programs to improve their overall wellbeing.
Reskilling and Upskilling
Many banks may find that reskilling and upskilling their current workforce can get them to where they need to be without contending with the competitive employment field. Investing resources in reskilling and upskilling may also lead to benefits beyond staffing and workforce talent development.
“Given the current crunch in hiring, progressive organizations are proactively identifying the skills gaps for their existing populations,” says Neil Shastri, associate partner of people analytics at Aon. “Creating internal talent markets helps these organizations strengthen their employer brand as well as assuage hiring issues.”
In addition to these advantages, reskilling and upskilling also help insulate employees and companies from disruption. “At a broader level, in wake of digital disruption, remote working and a possible recession, organizations are focusing their energies on helping their employees develop resiliency and the ability to navigate chaos,” says Shastri.
Combining Staffing Strategies
To keep up with the pace of technology and the growth of fintech, banks are changing their approach to staffing — but to maintain an edge, traditional financial institutions must take a close look at what they’re offering to potential hires. Highlighting workplace values, benefits packages and a commitment to invest in talent development can help financial institutions distinguish themselves in a highly competitive job-seeking environment.
“The challenge in recruiting and retaining this talent is universal demand and limited supply,” Connell says.
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