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5 Key Hiring and Recruiting Trends in Financial Services

November 26, 2019 | Shannon Shoemaker

Financial services (FS) is a broad term, but the industry includes investment firms, commercial banks, lenders, mortgage brokers, insurance, tax and accounting services, credit card companies, and brokerages. FS has also spawned its own subsector in financial technology, or fintech. Globally, the FS industry leads the world in terms of earnings and equity market capitalization. Large conglomerates dominate this sector, but it also includes a diverse range of smaller companies.

With unemployment at a record-low 3.7 percent (Bureau of Labor Statistics) and fewer job seekers on the market, finding and securing skilled financial talent will continue to be a challenge for FS employers in 2019 and the coming year. Unemployment rates in the sector are even lower than the already-low national rate (2.5% for accountants and 2.1% for financial analysts, respectively).

In order to remain competitive, FS companies must focus on ways to improve efficiency and offer more to customers by transforming their technology infrastructures and improving agility. Bank leaders face three primary challenges in developing a talent strategy: preparing for technology driven disruptions that could require widespread retraining; identifying the skills and expertise needed to compete in the future; and attracting and retaining the people with those skills.

 

Five Important Trends for Hiring in Financial Services

Here are five important trends to consider for hiring and recruiting in FS for the coming decade:

    1. Time to hire. We need to move quickly in order to hire the best talent. Often candidates are receiving offers from other employers midway through our own hiring process. There is so much pressure to compete over the same top candidates in a rapidly shrinking talent pool, we can no longer wait weeks to hire the best talent. Going from interview to offer in days instead of weeks is now the norm.
    2. Skills gap. Especially in fintech and in new technologies in the financial sector, in order to close the talent gap we must develop programs to upskill and reskill our existing workforce. Which members of your workforce already have the skills you need in the future? Which members don’t have the right skills yet, but can develop them with targeted training and coaching? Ten years ago, only approximately 50 percent of the CEOs of 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.
    3. Time to apply. Many companies are shortening the candidate application process down to as little as five minutes. It doesn’t mean we are skipping steps, but that things like assessments and gathering additional information are moved later into the interview and selection processes. This means that background checks can be done concurrently.
    4. Salaries and perks. Evaluating compensation and taking a more creative stance on things like relocation stipends and sign-on bonuses. According to the 2019 PwC report “Preparing for Tomorrow’s Workforce, Today, work-life balance is an especially strong focus for the generations coming into the workforce and moving into the leadership pipeline. They’ve seen the impact of long hours and stress on their parents and therefore want to work in more agile and autonomous ways. Many are going further by choosing contract or contingent work over being an employee so they can take greater control over their life and seek out more varied experiences.
    5. The ability to compete. Increased competition in hiring from fintech, medical device, and healthcare are aggressively working to poach talent and provide training and development for those hires in other industries and areas. Many FS organizations aren’t clear about what kinds of skills they need or how to secure them, especially as existing jobs are evolving and new types of roles are emerging at an accelerating rate. The 2019 PwC report “Preparing for Tomorrow’s Workforce, Today identifies workforce data deficiencies as the biggest risk to the development of effective organizational capabilities. This research also shows the FS industry’s engagement with contingent talent lags behind that of other industries, and few organizations have developed an employee value proposition that embraces agile working and relationships outside direct employment.

 

The Importance of the Fair Credit Reporting Act (FCRA) and Other Regulations in Financial Services

Positions in the FS industry almost always involve access to money and data. Because of these factors, the risk for abuse in this industry—including fraud, identity theft, and embezzlement—is high. There are federal regulations in the FCRA that require background checks for most personnel in the FS industry. For example, Section 19 of the Federal Deposit Insurance Act (FDIA) and Section 205(d) of the Federal Credit Union Act (FCUA) govern whether an individual may be employed by a federally insured depository institution or an insured credit union, respectively. These institutions are prohibited from employing any person who has been convicted of any criminal offense involving dishonesty or breach of trust. The risk to financial companies is typically in the form of lawsuits for negligence, meaning an employer either knowingly hired or neglected to run a background check on an employee that, for example, commits identity theft or fraud using customer data.

Companies in the finance sector need to move rapidly and innovate in order to attract skilled talent, but this sector is also the most dependent on background and criminal checks. While it’s tempting to speed time to hire by pushing candidates through this process quickly, a better and more reliable solution is to work with a screening partner that can handle the compliance side of hiring while your company interviews and assesses candidates. Sacrificing security in order to move more quickly to hire a candidate can only increase your company’s potential liability.

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