Organizations across nearly all industries have been faced with an increasingly competitive labor market driven by staffing shortages, changing workforce expectations, and digital transformation—the financial services sector is no exception. In order to remain successful, financial institutions must adapt their recruiting and retention strategies to meet the evolving needs of the workforce.
Current Recruiting & Retention Challenges
Attracting qualified candidates has become increasingly difficult for financial institutions. Below are four key challenges currently facing banks and credit unions:
- Tight Job Market: The job market remains highly competitive, making it difficult for credit unions to attract qualified candidates.
- High Turnover Rates: Banks and credit unions often experience high turnover rates, which can be costly and disruptive to operations.
- Wage Pressure: With wage pressure from other industries like retail and fast food, financial institutions must offer competitive entry level wages to attract and retain talent.
- Employee Options: Current employees have more job options than ever before, making it essential for financial institutions to stay connected to their employees' needs and wants.
Considerations for Combatting These Challenges
So, what can be done to mitigate the impact of the above challenges? It may be time for your institution to take a close look at its current approach and ask, “are we accurately and effectively communicating who we are, what we believe, and what we offer as an employer?” Here are five action items to consider at this time:
- Listen: Start with listening to your current employees. Listening in this context can include everything from employee surveys to “town hall” style meetings to focus groups of select employees. Management cannot afford to assume they know what employees want. It is imperative that you seek out and obtain real feedback from across your employee base before embarking on any change process.
- Articulate Company Culture: Take the time to define your company’s culture and to articulate it in writing. You have a sense of what your organization’s culture “is.” But it is becoming ever more important to articulate organizational culture in a manner that is clear to everyone in the organization, from the brand-new hire to the longest serving Board member, to ensure common and consistent understanding and expectations. This is key to differentiating your institution from other employers.
- Establish Job Expectations: Articulate job expectations clearly to potential recruits. This should go beyond a listing of job duties and required skills for each position. A common set of expectations for employee and client/customer interactions, that is, how people treat each other and should expect to be treated, will differentiate your organization from other potential employers.
- Revisit Benefit Packages: What benefits do you currently offer? Do your employees value these benefits? Be sure to revisit your benefit packages to ensure they meet current and prospective employees' needs. It’s important to understand how employee and prospective employee needs and wants may have changed in recent years and your benefits should reflect these changes.
- Communication and messaging: Are your internal and external-facing communication materials accurately reflecting your culture, job expectations, etc.? It may be time to take a fresh look at your current job postings, websites, and additional recruiting and marketing materials to ensure they align with what prospective and current employees want.
Alternative Solutions
While the above strategies are crucial and should be part of any organization’s overarching plan, there may be a more effective solution. Many organizations are finding an effective and efficient path includes the following elements:
- Automation: Implementing automation tools such as online customer access and chatbots for customer service to streamline operations and improve efficiency. This is not just for very large institutions; many moderate and smaller-sized community banks and credit unions are partnering with fintechs and other providers to offer more advanced automation tools that can reduce the need for staff time.
- Outsourcing: Outsourcing specific operating functions, such as internal audit, compliance, accounting, information technology, human resources, and others can provide relatively economical access to expertise beyond what your institution can afford internally. Many arrangements are “partial” outsourcing or co-sourcing, where overall direction and strategy of the functional area is overseen by a management employee while the work is outsourced to an external provider. This model has been broadly and successfully adopted for internal audit services across community banks and credit unions. The opportunity to expand the value to other functional areas is available and worth looking into. Learn more about Bonadio’s Advisory & Consulting services here.
Recruiting and retaining talent in financial institutions is challenging, but essential for success. By understanding the current challenges and implementing effective strategies, financial institutions can not only survive, but thrive in the competitive job market.
If you have any questions on this topic, or just want to bounce ideas off someone who might be able to add some external perspective for your organization, we are here to help. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.