Skilled employees that will stick around long term are hard to come by these days. Financial services companies are finding themselves in an increasingly competitive environment for the recruitment and retention of talent, as job openings have tripled in the last year, and banking giants have boosted the junior wage to entice applicants. This isn’t enough to keep the employees long term though. What is needed is employee satisfaction with the company: this stems from companies listening to their workers’ desires.
Colin Clunie is the Head of EMEA Operations at Clearwater Analytics. Clearwater Analytics is a provider of web-based investment portfolio accounting, reporting, and reconciliation services for institutional investors at thousands of organisations. Having worked at a variety of financial institutions like BlackRock, Athora, and Standard Life, Clunie has seen how the right recruitment can have a positive effect on a company.
Clunie spoke to The Fintech Times to explain the positive impact that diversity has on the workplace and how it should be prioritised by employers. How employees are treated should also be re-evaluated to ensure long term involvement in the company:
As businesses seek to manage the continued impact of the pandemic, a lot of noise has been made around adopting new ways of working – from how many days a week employees should go into the office to which technologies to adopt to enable the remote workforce. While these are important areas for consideration, finance leaders have to go a step further and focus on winning the war for talent.
Financial services companies are finding themselves in an increasingly competitive environment for the recruitment and retention of skilled employees, so much so that job openings in banking have tripled over the last year as people have increasingly left their posts. As a result, banking giants – including the likes of Barclays, Citigroup and JP Morgan Chase – have recently boosted wages for junior staff to entice applicants.
Today, however, simply raising salaries won’t cut it. Financial services organisations need to do more to proactively attract and retain the best talent to help them rebuild and continue innovating following the pandemic. For the majority of companies, this entails changing the recruitment battle plan.
Diversity is the strongest weapon
The first line of attack must be achieving a diverse employee base. A heterogeneous workforce leads to fresh perspectives and ideas, helping to drive innovation and better business performance. In fact, companies in the top 25% for ethnic diversity are a third more likely to achieve above-average profits.
What’s more, access to diverse language skills across the talent base can help businesses grow and align with the expectations of clients across different countries.
But despite the potential that a diverse workforce offers, the finance industry is falling behind. As it stands, women make up nearly half (45%) of the financial services workforce. But, as we move up the management chain, this number quickly wanes; at the board level, only 23% are women. On racial diversity in the industry, statistics are sorely lacking. An article in Reuters earlier this year revealed that eight of the 14 top banks have not yet published any UK ethnic diversity data. In a country, where at least 14% of the population hails from BAME backgrounds – this is simply not good enough. Financial services organisations must start to proactively seek the best and most inclusive talent by re-evaluating their recruitment strategies to fit this goal.
Dipping into a diverse pool of talent
To identify and appeal to a large, diverse pool of prospective employees, financial firms therefore need to do more to reassess their hiring strategies. This means actively seeking out the right candidates and implementing diversity-led recruiting initiatives.
For example, removing male-coded language – such as ‘driven’ and ‘competitive’ – from job advertisements will attract a more inclusive split of applicants, as well as making efforts to hire employees from a range of educational backgrounds. In particular, return-to-work individuals and school-leavers tend to be easier to retain than graduates. In fact, 67% of school-leavers will stay at a company for five years after employment, compared to 53% of graduates. By making fundamental shifts to the recruitment process, companies will be opening up their doors to a wide range of talent rather than creating a homogenous workforce that mirrors the current status quo. This is vital for future financial services innovation, given that Deloitte found that employees’ ability to innovate increased by an impressive 83% when they felt their organisation was committed to diversity. At the same time, in recalibrating their recruitment focus on inclusion, firms can retain employees for longer, leading to a more stable and stronger workforce.
The battle against attrition
Recruiting the best talent is a futile task if these employees do not stay within the organisation. And attrition is already wreaking havoc on the financial industry, with the sector experiencing an employee turnover rate of 19% – one of the highest among all industries. This is well above the UK’s average employee turnover rate of approximately 15% a year.
The root of the issue can be boiled down to one simple fact: satisfied employees are less likely to quit. Nearly 90% of workers report that their work-life balance is deteriorating and nowhere is this more evident than in the financial sector. In fact, Goldman Sachs recently hit the headlines for employees working more than 95 hours a week. Therefore, it’s no surprise that 70% of junior bankers have quit their roles due to burnout from severe workloads.
With even more uncertainties being thrown into the mix during the pandemic, it is more critical than ever to listen to your workforce. You must accommodate their needs and understand what they value – be it flexible working or educational development. It will be key to employee engagement and thus, retention.
Turning inwards and moving upwards
Talented employees are vital to business success, no matter the extent of the organisations’ growth ambitions.
To lead the charge in the war for talent, businesses have to look inwards to reassess not only how they recruit employees, but also how employees’ careers are developed. To retain their best talent, more must be done to ensure representation at every level. This means focusing on diverse and inclusive career development policies and ensuring that managers apply equality and fairness in every part of the business. I have seen first-hand how well-thought-out training programmes for employees at all levels, skillsets, and departments can make a world of difference in terms of readiness, confidence, and a view toward continued professional growth.
At Clearwater Analytics, we know from personal experience that diversity works. We are proactively implementing diverse hiring and striving to recruit across a wide pool of talent, including return-to-work individuals and recent university graduates that may have less relevant experience. And our leadership team is diverse – showing candidates and employees it is very possible to reach the upper echelons of management.
For financial services to survive and thrive, and keep talent, it’s time to rethink our talent acquisition and retention strategies. Those that do, will win the war on talent and grow.