what next for employment in the financial services industry?

Securing the right candidate with the right skills has never been easy, but the pandemic has changed the landscape once more. The way that the financial services industry adjusted operations to cope with work-from-home orders and disruptions has shown that there are alternatives to the old status quo. While many employers have reopened offices, many more employees are ready for a permanent change, bidding goodbye to five days of commuting and cubicles. 

Because of this, no organization will be able to go back to exactly how things were – and nor should they. Employees, customers and shareholders are all demanding lasting change – and your business will need to take notice if it is to successfully navigate ‘The Great Resignation’ and retain its brightest talent. 

In the coming years, financial services businesses face five key staffing challenges:

employee retention

You already know that retaining the brightest talent isn’t easy. Research by Randstad RiseSmart has found that across all industries, talent retention, engagement and talent mobility are key business priorities

This is particularly true as much of the world returns to some degree of normality because employee perceptions and preferences have changed. A record number of employees are leaving work to find new roles that better suit their changing priorities. 

demands for hybrid work

During the pandemic, many financial services employees got to experience hybrid working for the first time – and they liked it. So much so, only 20% of employees wanted to be in the office for three or more days each week once COVID-19 was no longer a major concern.

Unfortunately, managers are not so enthusiastic about remote working with 68% wanting the exact opposite from their workers – a minimum of three days in the office each week. Clearly there needs to be a compromise that works for the business and its employees.

At the same time, regulators are updating their frameworks to adjust to the new hybrid work model. In the UK, the Financial Conduct Authority (FCA) recently updated its remote or hybrid working expectations for firms with the caveat that these may evolve further still as the workforce adoption of office working increases.

Elsewhere, a joint paper by the Monetary Authority of Singapore and the Association of Banks in Singapore sets out key actions that firms are encouraged to adopt to manage remote and hybrid working risks. Themes include ensuring an adequate control environment, cybersecurity defenses and the impact that distributed work has on people and corporate culture.

The Hong Kong Securities and Futures Commission has also issued regulatory standards for managing the potential risks of remote working, such as off-premises trading and information security. In addition it goes on to suggest techniques and procedures to help firms comply with these standards to better protect themselves, their employees and their customers. Where these established financial hubs lead, other countries are almost certain to follow in the very near future.

Technology will play an important part in enabling hybrid working, but there are other factors to consider. Financial services compliance obligations will still apply – including to those workers operating outside the office. Financial services firms will need to seriously consider how to build a corporate culture that ‘works’ outside the company network and which encourages adherence to compliance frameworks and the like.

changes to the traditional workforce

The financial services industry is under constant attack from fraudsters and criminals. Mitigating these risks will require a skilled workforce who can manage risk and compliance, cyber security and digital transformation in the new hybrid working model. 

The workforce will need to acquire technical and soft skills. They will be part of teams who can collaborate, innovate, adapt and persevere through industry and operational disruption. AI and Open Banking will go some way towards meeting these challenges. However, Gartner research suggests that building a culture of continuous learning will yield even greater progress towards model innovation.

talent scarcity

Competing with agile and innovative FinTech startups, the financial services sector is engaged in a prolonged battle to secure and retain the skills they need for their own internal projects. Your brightest talent is undoubtedly drawn to the prospect of innovative projects and cutting-edge technologies, making them susceptible to overtures from your competitors.

Increasing remuneration packages has had some effect on retention, which is why many large industry players have boosted their remuneration packages in recent years. But money isn’t everything, as shown by changing employee priorities. Hybrid working, flexibility and an improved employee experience are all crucial factors for employees making career decisions. But employee asks are also evolving. Our own research showed many younger workers now expect to  be offered paid coaching by third-party consultants. 

equity, diversity and inclusion

Employees are increasingly choosing roles with employers who align with their purpose and principles. More than 40% of potential candidates would not consider working for an organization that is not proactively working to improve its equity, diversity and inclusion (ED&I) policies. Global protests have shown that people want their voices heard on matters of social justice – and they want businesses to play their part too. 48% said they would refuse employment offers from companies that lack an active ED&I initiative.

Similar numbers of people want organizations to align with their social and environmental concerns. They will refuse to work for anyone with misaligned values and those who do not actively promote their ED&I efforts.

Gender equality remains a hot topic, particularly as so few women make it to board level in the financial services industry. Even fewer make it to CEO – just six in the 107 largest US public financial institutions are chaired by women. And of course, racial diversity still needs to be improved too. In the US, the proportion of people of colour in financial services drops by 75% from entry-level positions to the C-suite..

These expectations are not simply an employee wish list however. Customers and stakeholders are also prioritizing spend with organizations who have active ED&I initiatives. This means that ED&I is no longer a fringe issue – it is actually critically important to attracting and retaining bright young talent and helping drive new growth prospects for the business.

how can these challenges be overcome?

Taken together, these five factors represent an existential crisis for financial services institutions. More than ever before, employees are driving the conversations around employment and the workplace of the future.

But this is not necessarily a bad thing. Improving hybrid working, ED&I initiatives and workplace culture can deliver significant benefits in terms of staff retention, productivity, efficiency and profitability.

To learn more about post-pandemic HR challenges and how best to navigate them, please download your copy of our latest guide key employment trends in the financial services industry

simon lyle

UK managing director

24 June 2022

speak to an expert.

unleash worklife possibilities for your organization and employees.

contact us