Navigating the Talent Crunch
Shifting tactics to attract new talent
Great news! The headline on CNBC read “Payrolls jump in June well above expectations”. The article highlighted a sharp rebound in hiring in June, as the U.S. economy had the largest gain in jobs since January. The labor force participation rate increased one-tenth of a percent to 62.9%, its best since March, and underemployment was reported at its lowest level since early 2001.
All good news, right? Well, it is wonderful news for people in the market for work. Demand for qualified workers is very strong. But what about the view of the bank working to fill open or newly created positions? Here the story changes.
It’s not a headline to report that the financial services industry is experiencing a challenging time for attracting new talent. For many early career job seekers, banking still has a taint carried from the financial crises a decade ago. This is not surprising considering that the Gen Z population were in their formative years, and older Millennials were early in their careers in 2008. Perspectives were shaped by family members losing jobs or their homes and in many cases, the narrative of the day was that all banks caused the problems. In addition, today’s college graduates and early career job seekers have more career path options than even a decade ago, including a range of choices in the gig economy.
According to a recent article in Money (http://money.com/money/5644053/best-jobs-recent-college-graduates-salary/), the most popular jobs for recent college graduates right now include software engineer, registered nurse, salesperson, teacher and accountant. “Banker” didn’t even make the list.
So what is a bank to do when they need to bring in new talent to the firm? Here are four steps to help bank leaders win the battle for talent:
1. Recognize that we are in a different kind of “seller’s market” for talent. Immediately after the financial crises, there were many more candidates for financial services jobs than there were jobs available. That dynamic has changed, and the imbalance between supply of talent and demand for qualified workers will likely continue into the foreseeable future. Recognition of this shift informs bank leaders that it is incumbent upon them to consciously define, design and deliver clear and intentional talent acquisition strategies. This means who the firm targets, how they proactively connect with potential candidates, developing and maintaining a talent acquisition pipeline and assuring that all managers co-own the firm’s talent acquisition objectives.
2. Reframe your firm’s talent management strategy. Talent management strategy is as critical as the bank’s risk management, business development or product strategy. It must include an all-out positioning and prioritization of the bank’s approach to creating and living a compelling value proposition about why a candidate would choose to work at your bank, clarity around why your firm is a great place to work and understandable career development and pathing options. In addition, candidates need to understand all the benefits of working at your bank, beyond just financial compensation.
Today’s job seekers expect more from potential employers than a paycheck. They need to know that they are doing meaningful work that helps enhance peoples’ lives. Consider a recent Harvard Business Review article that says 9 out of 10 people are willing to earn less money to do more meaningful work (https://hbr.org/2018/11/9-out-of-10-people-are-willing-to-earn-less-money-to-do-more-meaningful-work). Money matters, but it’s only part of what banks need to provide to candidates and employees.
3. Position HR as a front-line talent management arm. In the current talent crunch, human resources professionals must have a front-row seat at the bank strategy table. HR leaders need to co-create and co-own all aspects of the bank’s talent management strategy – the bank’s employee value proposition, talent pipeline management and acquisition, learning and development, total benefit and compensation programs, career pathing management and talent retention. The days of thinking about HR as the place to go for advice on how to deal with personnel problems is in the ancient past. Today is the day to redefine the role of HR in your bank’s clearly developed talent management strategy.
4. Change the narrative. Most of the bankers I know did their best to hold their heads up high in the aftermath of the financial crisis. They knew that there were some bad actors empowered by enabling policies who defined the crisis, but they were the exceptions and unequivocally not the rule. The vast majority of bankers performed venerable work to help clients accomplish their financial objectives and manage their money prudently but kept a low profile.
Now it’s time to step forward and tell the real story of what banks and bankers do every day to support individuals, families, businesses, communities and the economy. Banking is a profession and one to be proud of. The new narrative needs to articulate that through performing work in a bank, you develop knowledge and experience that helps people demonstrate financial success in all aspects of their lives. From helping raise financial literacy to teaching the importance of prudent money management; from advising on how credit can facilitate the growth of a family business to navigating the financial needs of nonprofit community support organizations, it all matters. And bankers matter!
In the words of Jim Morrison of the Doors, the time to hesitate is through. This is the day to develop your bank’s talent management strategy to assure you are effectively positioned to navigate the demand for talent today and into the foreseeable future.
David Coffaro is principal at Strategic Advisory Consulting Group.