76% of the CEO’s in the Financial Sector say that the lack of talent is a threatening factor for growing companies in the sector after 654 chief executives of companies are interviewed around the world based on PwC’s surveys.
A new skills challenge
Ten years ago, only approximately 50% of the CEOs of financial services (FS) companies saw skills shortages as a threat to their growth prospects. According to PwC’s 22nd Annual Global CEO Survey, it’s now 76%. This shortage of key skills is affecting everything an FS organization does, including staffing, innovation
and customer experience (see Exhibit 1).
Impact of Skill Shortage
Priorities of Closing the Skills Gap
So far, industry leaders have generally responded to this challenge with more of the same talent strategy: developing skills from within and attracting employees away from competitors. A few forward-looking exceptions aside, most FS organizations aren’t focussing closely on fresh approaches. For example, they aren’t hiring from outside the industry or changing the composition of their workforce (see Exhibit 2). How sustainable is this continued reliance on traditional talent strategies? Although financial reward was once a big attraction in recruiting FS professionals, today’s diminishing returns make it difficult to sustain an employee value proposition built solely around pay.
The challenges are compounded by a mismatch between the supply of talent (higher in slow-growth mature markets) and demand for talent (with rapidly expanding markets in Asia and the Middle East). More than a decade after the financial crisis, FS businesses also are still wrestling with their identity. Banks have a strong and compelling value proposition: they can help businesses grow and enable customers to meet cherished aspirations, such as owning their own home. Yet despite concerted efforts to rebuild the image of the industry over the past ten years, this positive purpose may be ignored externally, and it may be blurred internally as well.
Wanted: Financial Innovators and Engagers
Although technology can provide a platform for modernization, it’s people who ultimately drive innovation and realize its potential. The most prized talent includes people with combined FS and technology expertise, focused on highly specialized areas such as the use of drone surveillance analytics in underwriting or training the machine learning systems used in algorithmic trading and robo-advice systems. There is also a call for people who can drive digital transformation. This capability depends on understanding new business models and appreciating the art of the possible from a customer experience perspective, then integrating these approaches with leading-edge technology. The skills of human engagement also become more prominent as operations become more automated. The differentiated value of skills that can’t be replicated by machines—creativity, engagement, and emotional intelligence—increases accordingly.
Examples include the needed skills of employees who deal with the complaints, complex inquiries and other moments that matter that chatbots can’t manage. These individuals aren’t standard call center personnel, but a new breed of ‘super relaters’, capable of quickly scanning through multiple omnichannel interactions and then responding with expertise and imagination when human intervention is required. Examples of how innovation, engagement and core FS skills are coming together include people developing solutions for financial inclusion and well-being, and customer-facing staff meeting the demands for more socially and environmentally conscious investment strategies. Signs of a relationship resurgence include bank outlets that are more like cafés and places to hang out than like traditional branches. In short, institutions are looking for ways to capture more of people’s time, loyalty and wallet than one-click digital interactions can allow.
How can you identify and secure talents?
1. Forge a renewed sense of purpose
Although FS organizations have found themselves weighed down by process and regulation over the past ten years, digital transformation has set off a fresh wave of innovation. Pushing your business to the forefront of that wave and creating an environment where it can prosper—for example, with attention to diversity and agile working—can help make it a magnet for talent. FS organizations are keen to reassert their vital role within communities and economies. The question is whether they’re doing this in a way that rebuilds trust or just as an afterthought to the prime strategic objective of boosting shareholder value. This needn’t be a trade-off. The two goals of building trust and profitability can and should be mutually supportive. Areas such as ensuring customer welfare and outcomes are at the forefront. Examples gaining ground include financial wellness platforms and medical and life insurance plans that encourage healthier lifestyles.
2. Get workforce planning up to speed
Effective data analytics can give your business a critical edge in anticipating future talent needs and creating a compelling people experience. Priorities Although FS organizations have found themselves weighed down by process and regulation over the past ten years, digital transformation has set off a fresh wave of innovation. 6 | Financial services talent trends 2019 Part of PwC’s 22nd CEO Survey trend series
3. Manage the real impact of technology
The impact of technology on your workforce is often misunderstood. Far from whole divisions being automated out of existence, we’re seeing parts of jobs being replaced and augmented. The resulting priorities include learning how to best use digital tools and making the most of the time they free up.
4. Operate as part of a wide ecosystem
Contract, contingent, joint venture and other forms of partnership or independent talent should be at the center rather than fringes of workforce strategies. These will all be valuable mechanisms as traditional sources of talent run short, highly specialized new areas emerge (e.g., cybersecurity intelligence gathering) and FS organizations come under pressure to curb fixed costs. Although the CEO Survey findings suggest that many FS organizations are reluctant to embrace this ecosystem approach, a small but growing set of businesses in the vanguard are looking at as much as 50% external talent models. The move to a platform model in which the most appropriate products and services are brought in would accelerate the move to partnering and more flexible talent sourcing. Key priorities include the identification and engagement needed to create a reliable network of independent contractors. It’s also important to ensure your employee value proposition embraces independent talent and determines how to address any regulatory or legal constraints.