Talent retention has decreased in many industries in recent years. In particular, talent retention for banks has seen a significant drop due to ever-changing customer needs. According to the Global Talent Crunch report from KornFerry, by 2030, there will be a labor shortage of 10.7 million in the business and financial sectors, leading to a potential loss of $1.313 trillion in revenue due to skills shortages.
Decreasing the labor shortage requires new methods for talent retention in financial institutions, such as boosting a sense of community, remaining competitive in benefit offerings, and ensuring career advancement opportunities are available for recruits and employees.
How Has Talent Retention Affected the Financial Industry Differently?
According to this Crowe LLP report, a high turnover rate has been shown across the board in banking, regardless of high pay rises in the industry. While the standard benefits for financial institutions have also increased, there is still a major decline in talent retention for banks. The standard methods of attracting and retaining employees have not been effective in recent years.
The reasoning behind this difference in the finance industry is due to a few factors, including competition from fintech and startup companies which are becoming more attractive than financial companies for potential employees. This note is increasingly true, especially after the 2008 recession, which caused uncertainty for many individuals in the finance industry.
Unfortunately, high raises and benefits packages are no longer a fit for the current workforce. According to the findings of ManPowerGroup, 77% of millennial workers want other benefits, such as feeling like they are making a positive impact on the business, working with “great people,” and having recognition as a field expert.
Offering alternative benefits such as remote positions and core values that meet employees’ expectations is essential to talent retention for banks.
So, how do banks and financial institutions attract, retain, and develop a workforce that can withstand an evolving customer base?
3 Ways Financial Services Can Attract and Keep Top Talent
Updating practices within the financial industry is the best way to approach talent shortages. Some updates which can help entice potential talent include creating positions that can be fully remote or hybrid, altering core values to create a more desirable workplace, and creating an overall welcoming environment.
1. Offering Flexibility and Remote Work Options
For many, the pandemic allowed workers to tackle their daily work tasks from the comfort of their homes. Talent in the finance industry demands that remote work continues for positions that align with remote work capabilities. According to a survey of 8,000+ workers in various industries by Gallup, only 6% want to be in the office full-time. By looking at which positions can be fully remote or hybrid, banks can potentially entice top talent away from fintech companies and startups.
2. Adjusting Core Values
A growing number of workers are seeking companies that align with their core values, including values in environmental, social, and governance (ESG) issues. ESG issues are business standards set in place by potential investors who are socially conscious. According to a new LinkedIn survey, about 71% of professionals note their willingness to be paid less at a company with a shared mission and values. Re-evaluating core values is another important way to help attract top talent in the financial field.
3. Creating an Inviting Environment
As mentioned earlier, many employees in the financial industry are seeking a career that allows them to work with other employees they enjoy. It’s important to create a sense of belonging in a company. According to the same LinkedIn study, about 47% of workers value a positive work culture in which they feel they can be themselves. Thus, creating a welcoming environment in the financial industry is key to talent retention.
These are only a few of the many ways in which the financial industry can create a more desirable environment for new talent. By following the above tips regarding talent retention for banks, the financial industry can begin closing the gap between labor shortages and banking.
Onboarding and training employees cost time and money. Research shows that the number one reason employees leave an organization is due to the lack of career progress. Financial Institutions can’t afford to lose effective employees to another organization. Contact Oncourse Learning to help you invest in your employees and their futures, and help your institution at the same time.