Anticipating Success | By Bhushan Sethi
The banking industry is experiencing a double tsunami of disruption – on one side by a radically changing banking environment, and on the other by the need to attract, engage and retain the right talent to anticipate and address these disruptive changes.
Whether it’s addressing the emergence of new fintech competitors, heightened regulatory and political scrutiny, robotics, cloud computing, contingent employees or planning for Brexit, banks struggle to match their evolving needs with strategic, business and workforce plans.
There are three essential concepts banks can adopt right now to better anticipate the future and manage it with the right talent: using data analytics, creating dynamic workforce demand/supply models and developing or accessing “talent exchanges.”
Use Data to Assess the Present and Plan for the Future
Data analysis can show if an organization has a correct executive succession plan in place, whether its workforce is top- or bottom-heavy, what its future needs are for contingent versus in-house staffing, and more. Together, HR and business leaders can usually find these descriptive analytics in existing reporting dashboards, but there also are visualization tools to further analyze how changes in business priorities might impact workforce projections.
Workforce analytics, creating a powerful understanding of a bank’s current situation, can examine engagement and performance trends to drive hiring and retention effectiveness. It also can inform the next crucial step in the process, developing a supply/demand model.
Dynamic Workforce Models Based on Data
A dynamic workforce model can reveal the drivers that impact future workforce needs. Maybe those needs require a different mix of capabilities, a workforce reduction or new onshore or offshore locations. New specialties may be required to address such disrupters as processing automation, unique digital identifiers within trading lifecycles or the need to digitize the workplace with the latest generation of cloud-based technology. You won’t know without a model.
As well, models can help predict the impact of other disruptive forces, such as changing customer preferences, interest rate increases, unexpected geopolitical events or new regulations that strain particular types of talent.
As for the contingent workforce, a workforce model can examine such factors as the balance between fixed and variable costs, capability gaps, recruitment cycle times, risk appetite and the organization’s willingness to work with external partners. A large number of mature financial institutions cannot, with a high degree of comfort, identify their contingent workforce at any point in time, particularly when it comes to the critical issue of system access.
Finding New Sources of Verifiable Talent
With these kinds of understandings in place, banks must now look to alternative ways of sourcing talent. The plain fact is that the traditional ways simply aren’t sufficient to find and recruit the best folks for the changing times.
The bank hiring process is pretty opaque. There is the potential for employees to go from one job to another without their new employers having any real understanding of their prior performance, personal ethics and values, whether they’re a good cultural fit, or if they can even fill the employment needs of the future. The current processes for background checks seem inadequate to filter out bad apples who might expose the firm to reputational and financial damage.
As a remedy, consider the concept of “talent exchanges,” an approach to hiring similar to how today’s sharing economy works. Here, banks and job seekers are matched through technology, algorithms, data and a little human judgment. In addition to validated prior employer references, this might include psychometric profiles, social media footprints and social sentiment.
Recruitment technology vendors might choose to build and launch a talent-exchange platform, or the industry itself might create one. In October, The Wall Street Journal quoted Federal Reserve Bank of New York President William Dudley, speaking at a workshop devoted to fixing conduct problems in banks, urging the creation of an industry-wide “bad banker” registry, which would require changes in hiring, information sharing and employment law.
The talent exchange concept also can help banks attract the best and the brightest. A competitive market has shifted the balance of power to the job seeker; a major question in the industry today is whether young talent even finds a job in banking attractive.
To address this, banks could employ former employees to provide to prospects reviews of their work experience, or immersive pre-employment visualization and experience through such methods as gamification, short trials and “day in the life” previews.
In the coming years the makeup of the bank workforce – how it’s recruited, organized and rewarded – will look very different than it is today, and it should. How banks make sure their workforce strategies are optimized for the future can determine their ultimate successes, or their failures.■
Bhushan Sethi leads PwC’s U.S. Financial Services People & Organization Practice.