Financial Services - Industrial Background
The financial services sector has gone through lots of turmoil in the last decade, including massive reputational harm post the global financial meltdown in 2008.
Increasing regulatory requirements and sophistication introduced in the sector, after the 2008 crisis, forced many financial services companies to rethink their business strategies.
Additionally, technological advancement, pressure to digitize and an increasing influence of the social networks made the financial organizations rethink their customer interactions. The focus then shifted to customer experience in these types of communications.
The changing rules of participation prompted companies to take fresh stock of the skill sets that would be required to manage, grow, and sustain the businesses.
Technological skills that were traditionally part of only IT now became a necessity for the whole workforce, along with the domain knowledge.
Globalization, to some extent, helped bridge these shortages in talent acquisition. However, resource shortages are not a thing of the past yet. Firms, across the globe, are finding it extremely difficult to hire and retain the right talent.
Financial Services HR Challenges
The following are some of the challenges from the Human Resources perspective:
Striking a balance between experience and rapidly changing skill sets
There is a wide gap between the experienced workforce and Generation Z (centennials) who are now entering the workforce. Today, in an average work environment, anywhere around three to four, different generations are interacting and working together. The HR departments are finding it challenging to strike the right balance between expertise and skills and bridge the gap.
Talent Retention
As the skills deficit increases in the current market, it is becoming challenging to attract and keep the best talent amongst fierce competition.
Globalization Challenges
Skill shortage in the local markets has forced companies to look for talent globally, but globalization comes with its challenges. There are cultural differences, language barriers, time zones, etc. to be managed.
Also, some areas in the financial services industry are market-specific, restricting HR from recruiting people from broader geography.
Quick Turnaround and Support
In the last few years, the markets have been witnessing shrinkage in the lifecycles of services and products.
The time to market has reduced drastically and is still decreasing, forcing HR departments to move away from their traditional maintenance jobs. This, in turn, has to lead to more proactive HR departments and smarter business models which revolve around specific business needs.
There has been a growing demand for the HR departments to continuously assess the short-term and long-term aims to be aligned with the organization.
Effective HR Strategies To Address The Challenges
Workforce Strategy
Developing a comprehensive workforce plan which is also flexible, can help companies overcome resource shortages.
Flexibility to ramp up or ramp down resources at any given point in time in response to the changing business requirements, market conditions and financial situation can assist these financial institutions in sustaining in the market and delivering results.
Customize Rewards & Recognition programs
While compensation plays an integral role in attracting and retaining talent, there’ll be employees at certain levels who are looking beyond compensation.
Recognizing the needs of employees at different levels and devising innovative programs at various levels can help employee retention.
Talent Management
The Human Resources sector must adopt a holistic approach to talent management and be able to mitigate talent risks:
- Training and retraining employees, succession planning, and accelerating leadership programs within the organization at different levels is crucial.
- Role defining and targeting the right talent in the market with social networks and developing talent communities can help companies overcome skill shortages.
Technology Adoption
Human resources departments can rely on newer technologies to improve their operational effectiveness:
- Treat employees like customers and enhance employee participation and engagement through technology adoption, which could provide mobility to the employees. Develop metrics, data-driven models, and HR intelligence to make informed decisions. Creating meaningful and actionable HR insights by embracing newer technologies can help improve results.
