11 months ago -

In Financial Services, It Will Take Agility to Solve the Skills Gap

Financial services talent shortage, banking talent shortage, real estate talent shortage, insurance industry talent shortage

If you made me choose one word to explain what leaders in the financial services industry need today—and tomorrow—I’d go with “agility.”

 

After all, the past three-plus years have seen one crisis after the other. An unprecedented pandemic quickly flowed into worldwide geopolitical and economic instability. All this is set against the backdrop of the more predictable, but perhaps also more impactful, shrinking of the global workforce as Baby Boomers retire.

 

So yes, I’ll go with agility as the most important tool in the toolbox of CHROs and other leaders in financial services. The industry will continue to be tested in coming years.

 

Economic instability continues, and inflation-fighting moves by central banks have begun impacting financial services businesses. Both investors and younger workers have heightened expectations around equality, sustainability & governance (ESG) initiatives. The changing ways people work are affecting commercial real estate. Disruptive technology is further accelerating the urgency behind

digital transformation. And the aging workforce is affecting leaders’ ability to find the talent they need to excel.

 

These are just some of the trends highlighted in our Financials & Real Estate World of Work 2023 Outlook.

 

Is the bloom off the rose?

For more than a century, the financial services industry had an ace up its sleeve in the recruitment game: money. If you wanted to earn the big bucks, banking was your destination. Innumerable studies showed that the primary motivator for students and other young people entering the sector was salary.

 

Fiscal goals remain a high priority for those entering financial services as a career, but we’ve witnessed a shift; the 2007-2008 global financial collapse altered perceptions about the sector. Some Millennials and Gen Z workers were turned off to financial services by that downturn, or perhaps by debt-reform issues in general, and student debt in particular.

 

Let’s face it: workers’ priorities have changed. Money is still important, but as our own research and that conducted by others indicates, younger workers want their employer to have an aggressive ESG strategy. They want to see commitment to social issues. They want to feel their employer has a larger purpose.

 

Banks need to engage workers to whom these issues are very important, and I see many financial institutions working to get ahead on that front. Sure, there are inherent challenges when you’re addressing such topics as remote-work policies, but people are really pushing for work-life balance—and to succeed in a time of talent scarcity, financial services firms need to respond.

 

Meet them where they are

When I talk with our financial services clients, one recurring theme is the importance of meeting them where they are. What’s interesting is that “them” and “they” refer to both customers and talent.

 

Banks are racing to provide a great customer experience (CX) regardless of how and where interactions occur. CX is a hot-button topic in most industries, but it raises unique issues for the financial services sector. For example, two-thirds of consumers like to see a bank branch in their neighborhood, and an even higher percentage visit that branch “mainly to solve specific and complicated problems.

 

So financial services firms—those in the retail arena, anyway—are under pressure to not only maintain a branch presence, but to staff those branches with knowledgeable employees equipped to help customers solve thorny problems. At the same time, the digital imperative is more powerful than ever; the industry needs to provide great CX, maximize revenue opportunities, and trim costs all the while. Regional and demographic differences add additional complications.

 

In other words, banks need to meet consumers where they are.

 

The same goes for workers. One major trend among ManpowerGroup’s financial services clients is that leaders are reevaluating their talent engagement strategy. More than ever, they ask us for information on the worker skills supply everywhere and are willing to engage talent where they find it, regardless of borders.

 

India has long been a hot spot for talent, and it remains one. But banks are looking farther afield—to nations they previously overlooked in Europe, the Middle East and Africa, for example. And certainly to Latin America. Indeed, the latter region has certain major advantages, including shared time zones, for US-centric firms. Many major financial services companies are piloting talent programs right now in Latin America.

 

Grow your own

Over the past decade or more, it’s been fascinating to observe the evolution of the financial services industry into something that looks and acts very much like the technology sector. When you consider the scale of many banks, as well as the volume of data they process, this makes sense.

 

It’s not surprising that employment strategies in these industries are quite similar. They share a primary pain point: an enormous skills gap. For financial services, as for tech, the future lies in data analytics, blockchain, automation, AI and machine learning (including the generative AI exemplified by ChatGPT and similar offerings), and even quantum computing. The skill-set gap facing banks over the next three years is huge. They need skills that simply aren’t there.

 

So, what do you do? If you want to compete and excel, you fill that gap by any means possible—“beg, buy and barter” is the expression that comes to mind. That’s the reason upskilling is finally gathering momentum in the US financial services sector (Europe is far ahead on up- and reskilling). Leading firms are also opening up to credentials outside the traditional four-year college, such as tech education programs focused tightly on such areas as cybersecurity and database management.

 

It’s encouraging that this outside-the-box thinking is gaining a foothold in the sector. Banking was once considered a stable, even stodgy industry—bound by tradition, reluctant to adapt. Those days are long gone. Propelled by the digital imperative and rapidly changing macro conditions, today’s financial services leaders have proven themselves capable of imaginative, agile decision-making. And it’s a good thing, because those skills will continue to be needed for the foreseeable future.

About the Author

Jeff Schott is the Vice President of Strategic Accounts for Financial Services at ManpowerGroup, the leading global workforce solutions company. He has over 20 years of industry experience, specializing in workforce strategy, engagement and transformation.

Jeff holds a Bachelor of Arts degree from the University of Scranton and is based in New Jersey.