A recent KPMG survey revealed that the lion’s share of bankers – with 66% are either “confident” or “very confident” – see a bright future for the financial services industry. Of course, the brightness is contingent on a host of factors, from their ability to protect data and the adoption of AI solutions, to navigating a sea of unpredictable regulations and their honing of the customer experience… to name just a few. What doesn’t seem to get much media attention is talent - finding and retaining the talented individuals who will be tasked, essentially, with guiding their banks through this host of challenges.
Talent acquisition challenges, ranging from a lack of skilled candidates to high turnover rates, have significant implications that certainly cannot be overlooked. And, while there are probably more, here are 5 factors for banks to consider when addressing their talent needs.
1. Unskilled candidates
Skills gap is a real thing. Just how big a problem it is is hard to say, as there isn’t a great deal of current data available. Back a few years ago, bankers surveyed pegged their employees who needed upskilling at about 40%. With the advent of new technologies and the pressures felt from increasingly digitally-savvy consumers, banks are undoubtedly feeling an even greater “unskilled labor” pinch. In short, the lack of technically proficient employees is a major challenge. At the same time, there is a noticeable gap in the education and training of banking professionals.
To add to the complexity of the challenge, the role of banking professionals has evolved beyond basic functions, now demanding knowledge in areas such as data analytics, cybersecurity, and digital customer service.
What can you do? As the old saying goes, learning never stops. There are always new developments, discoveries, technologies, concepts, strategies, and more just waiting to be explored… and this couldn’t be truer than in banking. With the skills gap being one of the most pressing challenges in the banking industry, it is crucial to address it with learning and development programs. If you’re not doing so already, make the very worthwhile investment in training sessions, sponsor certificate courses, and offer reimbursement for professional development.
2. High turnover rates
High turnover rates are a major challenge for organizations in any industry. Considering the already high levels of skills gap and its implications on the banking industry, the struggle is real as employees don’t possess the skill set to carry out their responsibilities.
As Henry Ford, Founder of Ford Motor Company, once said: “The only thing worse than training your employees and having them leave is not training them and having them stay.”
Here’s another concerning fact — according to Cerulli, about 37% of financial advisors plan to retire during the next decade, and 72% of newcomers (with 3 or fewer years of experience) fail to stay in the industry. Matters related to compensation, growth opportunities, high levels of stress from workload, and the skills gap all contribute to these high turnover rates. And the outcome? A never-ending cycle of recruitment and training, which drains your bank’s resources and affects your team’s overall productivity.
Another factor not often considered? Your brand. The impression your prospective candidates, as well as your current team members, have about your bank’s reputation can play a major role in their decision to consider applying… or staying! Not sure where to start when it comes to building your bank’s brand? My suggestion is to make use of your social platforms, as this is the most cost-efficient and simple-to-execute tactic for brand building and maintenance. Of course, marketing your products and services is one thing. Living up to those marketing promises is the critical part. Make sure that you’re always responsive to customers whether in branch or online. There’s nothing more damaging than making a promise you don’t keep. For other ideas, check out this blog, “Employer Branding Strategy | What it is and How to Build One”.
3. Applicant fraud
Security in the banking sector takes precedence, and any risk can cost the organization a hefty sum. Job scams are an emerging threat. July 7, 2024 in CNBC: “Aided by AI, job scams surged 118% in 2023 from 2022, according to the Identity Theft Resource Center.” Sadly, the banking, insurance, e-commerce, and staffing sectors were the most susceptible to employment fraud, with nearly 8% of employees failing background verification checks.
It is a major challenge for recruiters to identify such serious security threats. Therefore, it is imperative for strong background verification (BGV) measures to be in place. Ensuring thorough screening processes, leveraging advanced verification technologies, and conducting regular audits can help decrease the risk of candidate fraud. As you’ll read further on, recruiting software programs can be useful in this area.
4. Time-eating, labor-intensive hiring processes
The process and speed at which you carry out your recruitment process directly impacts your bank’s operational efficiency and reputation. Long, manual hiring processes steal precious recruiter time, saddling personnel with juggling countless responsibilities and with little time for personalized candidate engagement. This negatively impacts the candidate experience and can also lead to recruiter burnout. And here, Forbes can help. They’ve curated a list of their top recruiting tools. Check them out here.
Automating the process can take your hiring team a long way toward improving your potential candidate experience, engaging the right talent, and enhancing your overall recruitment efficiency. It can also assist in the area of weeding out frauds, as your team has more time to do in-depth credentials review. And automated recruiting tools often offer useful, time-saving, fraud-detecting features such as:
- A multilingual recruiting chatbot
- A semantic resume parser
- AI assessments
- An Automated Video Interviewing tool
5. Building and maintaining a diverse workforce
If you are already struggling to fill positions with top talent, consider this: Here again, current data is not easily found, but according to a 2020 Glassdoor survey, more than 3 in 4 employees and job seekers (76%) report that a diverse workforce is an important factor when evaluating companies and job offers. This is especially true of GenZ’ers, who will comprise more than 30% of the workforce in 2030. A September 4, 2024 ABA Journal article reinforces the fact: “Many are expressing interest in careers at regional and community financial institutions; two-thirds of Gen Z respondents are somewhat or very likely to consider a career in this sector, valuing flexibility, purpose, and financial education as key factors in their employment decisions.”
It therefore goes without saying that your bank must formulate and implement effective diversity hiring strategies, while offering the "flexibility and purpose" sought by this upcoming generation of workers. Doing so not only attracts talent and enhances your bank’s culture so that team members stay with you, but also brings in fresh perspectives, drives innovation and improves decision-making. What’s involved? Tracking and analyzing your hiring metrics to identify biases, providing diversity training, opting for recruitment automation tools to minimize bias, promoting flexible work arrangements, and fostering an inclusive company culture.
To sum up…
Each financial institution is unique, so the challenges that each faces are unique, as well. You can, however, “bank” on the fact that finding and keeping the right individuals is a real challenge … and that challenge is not only not going away, but appears to be growing each day.
Yes, technology implementation, customer experience, data protection, regulatory compliance and workflow efficiency are all critical areas when it comes to a community bank’s success or failure. But, in the end – at least, in my opinion – success in all of the above areas hinges on one thing: Having the right team.
Bank Marketing Center
Here at bankmarketingcenter.com, our goal is to help you with that topical, compelling communication with customers — developed by bank marketing professionals for bank marketing professionals — that will help you build trust, relationships, and revenue. But, that’s not all.
We want to share what we know – and learn along the way – with all our community banking friends. Whether it’s the latest on AI technology, suggestions on how to attract and retain top talent, or the importance of data protection, we’re here to make bank marketing the best that it can be.
Want to learn more about what we can do for your community bank and your marketing efforts? You can start by visiting bankmarketingcenter.com. Then, feel free to contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com. As always, I welcome your thoughts.