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Financial and business services is one of the world’s most important sectors in terms of contribution to GDP. The financial services and insurance sectors employed more than 6.3 million people at the end of 2018.
Global labor shortages of 85.2 million skilled workers are projected by 2030, resulting in lost revenue opportunities of $8.452 trillion – the combined GDP of Germany and Japan. A Korn Ferry study suggests financial and business services will likely be the most severely hit by a talent shortage, experiencing a deficit of 3 million professionals globally by 2020.
In financial services companies where 60% to 70% of employees exhibited high engagement, total shareholder return was 24.2%. In financial services companies where the percent of engaged employees fell to 49% to 60%, total shareholder return dropped to 9.1%.
Overall, 66 percent of financial services employees say they have sometimes suffered from workplace burn-out. Women seemed to feel the burn more with 74 percent saying they had been burned-out as opposed to 59 percent of men. When it came to the reasons for burning out, unreasonable workload, unreasonable performance expectations, not being fairly compensated for work, poor management, and a negative workplace culture were the leading culprits.
Employees felt that the financial services industry could become more transparent by encouraging straight communication, eliminating layers of titles, hiring transparent employees, creating a feedback forum, and promoting the use of social media.
Seventy-nine percent of financial services employees say that working for an innovative company is important to them. While 75 percent of employees say they view their companies as being innovative, many still see ways for their company to improve including allowing for the free flow of ideas, having a budget for investing in ideas, holding idea competitions, and hiring entrepreneurial employees.
Sixty-eight percent of financial employees are interested in remaining in the industry, with more than 25 percent stating that they are more interested in working in the technology industry. This is especially true for Gen Z and Millennial employees (39 percent) compared to Baby Boomers (22 percent).
80 percent of employees say they wish their employer offered flexible or compressed schedules. 37 percent say they wish they could telecommute, and 69 percent say they need flexibility and telecommuting options to stay in the financial services field – that pay alone is not enough to keep them there. When asked how their managers could best support them, flexibility again emerged as a frontrunner with 42 percent of employees saying that giving them more flexibility would be the most effective means of support.
Additional ways that managers could provide support to employees included investing in learning and development, helping employees achieve their personal goals, being challenged, giving more frequent feedback, and mentoring. In every category, Millennials and members of Gen Z found these strategies to be more effective than their Gen X and Baby Boomer counterparts.
For banks, 20% of business lost to competitors was due to poor service. In banking and finance, employee retention saves money. Employee turnover costs are estimated at 20% of salary, as well as the costs of severance, and recruiting and on-boarding replacements. With the battle for talent heating up, your employees have a lot of options. Engaged employees are 87% less likely to leave than their disengaged colleagues. Work to ensure your employees feel appreciated and engaged.
When asked how they thought their company could better engage them in their work, 45 percent of employees say they wanted to be shown that their work made a difference, 39 percent say lessening office politics would help; and another 39 percent say that removing bureaucracy would be an effective tactic. In addition, 36 percent say that supporting their personal and professional goals would help and 19 percent say removing silos would heighten engagement.
When asked what their employer could do to attract and retain talent, 54 percent of employees say that companies should reward people more than once a year with a bonus; 47 percent say the company should recognize people more often; 38 percent say that the company should provide ongoing coaching and development; and 29 percent say their companies should provide more training for managers. Employees also felt that time off for professional development (28 percent) and volunteering (20 percent) would help attract and retain great talent.
The financial services industry is facing difficulties in retaining and attracting top talent. Having taken the brunt of impact during the 2008-09 financial collapse, FSI companies still carry a tarnished reputation. The sector also faces a widening talent gap, stunting growth and disrupting productivity. The struggle to adapt to global digitization also leaves FSI corporations in its wake, discouraging valuable millennial talent from entering the sector.
While companies focus on digital strategy to improve evolving consumer demands, most neglect internal digitization to honor evolving employee demands. As a result, only 38 percent of FSI respondents to the 2016 Digital Business Global Executive Study and Research Project agree or strongly agree that their organization offers employees the resources or skill-development opportunities they would need to thrive in a digital environment, and nearly half—41 percent of survey respondents—plan to stay at their current organizations for three or fewer years.
An established employee recognition program can increase productivity, reduce turnover and improve retention. Download our free guide to learn how to develop an employee recognition program in the financial services industry.
1. Keep your level of expectation realistic
Company culture is not something that can be changed the way Wednesday morning meetings are moved to Tuesdays. Culture is built, oftentimes organically, from your core values and management strategy. Some companies are structured around a desired culture, and others possess a culture that is simply a byproduct of high level organizational goals. To change culture, take small, measured steps toward improving overall morale and your organization will reap the benefits.
2. Talk to your employees before implementing a program
If you’re thinking of making big changes to your sales strategy, you don’t typically launch into implementation based on a few sticky note ideas–you research. When it comes to making changes to your organizational culture and your employees’ level of satisfaction, the best source of data is sitting a few feet away from you. Talk to your employees to gather feedback. Ask them what their day-to-day looks like. Ask them what would make their work week easier. Ask them what they love about their jobs. Ask them what they like about your company.
Nearly eight in 10 employees (77%) are engaged when workers strongly agree there is open communication, opportunities to provide input, a clear connection between current changes and the company's future, and management support for changes that affect their workgroup. When employees strongly disagree, a mere 1% are engaged.
3. Involve everyone, not just HR
Discover has invested in employee engagement for years and recognizes the financial and business advantages an engaged workforce returns:
“We work hard to identify leaders within our business units to help us communicate the importance of the [engagement] survey. It’s one thing if HR is saying employee engagement is important, it’s another if a business unit champion is explaining the linkage between engagement and business results.” Erin Correa, Manager, Discover Executive Development, Talent Management
To cultivate change, each key leader in the organization must facilitate it. Top-down recognition is beneficial in that employees are treated as humans, rather than hash marks on a revenue funnel. If c-suite executives, human resources managers, and department managers alike personally recognize and reward employees for a job well done, a culture of gratitude will begin to permeate the organization.
Though maintaining engagement at the executive level is crucial as leaders steer a company during rough patches, local managers have the greatest impact on employee engagement levels. Gallup finds that supervisors who work for engaged leaders are 39% more likely to be engaged, and employees who work for engaged managers are 59% more likely to be engaged.
4. Do not try to make changes all at once
Research suggests that culture gets hard-wired over time and is difficult to change. According to Maile Carnegie, group executive, digital banking at ANZ Banking Group Limited, “[Culture is] the hardest thing to get right, but it's also got the highest leverage. The highest return on investment is getting that culture right.”
5. Find out what your employees like
Have your management team do a little social research on each of your employees. Find out what they like, what makes them happy in their free time, and you’ll find out exactly how to reward them for a job well done. The era of the gold watch is long gone, don’t create a program based on old hat, blanket recognition methods.
6. Take a look at where your employees’ time is going
Empower employees to maximize their talents and do what they do best. That means encouraging employees to use their strengths every day. Teams that focus on strengths every day have 12.5% greater productivity, and people who use their strengths every day are six times more likely to be engaged on the job.