Four ways to plan for the evolution of roles in the finance sector
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The finance industry: how to future-proof talent recruitment at a time of change
In the UK the finance industry is one of the key employers and contributors to economic growth, there are 2.5 million jobs in this sector – over 1.1 million in financial services alone. Similarity in the US, employment in the business and finance sector is expected to grow by 7% from 2021 to 2031 – above the average projected growth for all U.S. occupations (U.S. Bureau of Labor Statistics (BLS)). All of which strongly indicates that the demand for talent in this sector remains high, despite challenges driven by Brexit, the global pandemic, geopolitical emergencies - and a growing shortage of available talent with the right skills.
What factors are key when sourcing talent in the finance sector?
For many organisations the challenges depend on the type of financial role being recruited for. For example, within retail finance leaders "report their top retention challenge is losing employees faster than they can be replaced” whilst for the financial services sector “its top issue is losing top talent to retirement.” Similarly, skill sets are changing, and organisations are having to tackle the need for better technology to revolutionize the way they work. This in turn brings about questions for reskilling and upskilling current employees vs employing new team members and addressing the growing issue of talent retention. Whilst questions of how the finance sector can improve culture to become more diverse and inclusive are at the forefront of company image and values.
There is much for HR managers to consider when sourcing new talent to create a pool of candidates who can help drive performance, engagement and profitability. Below we take a look at these issues in more detail and explore how organisations can use psychometric insight and technology to source and select candidates that meet the needs of the role, as well as fit the organizations' and teams' goals and values!
The skill set challenge
Skill sets highly sought after within the finance sector include communication, problem-solving, analytical skills, leadership and of course numeracy. However, the most sought-after candidates in the finance industry are those who have experience in both financial services and technology. Research suggests that in 2025, “40% of finance roles will be either new or significantly reshaped due to finance technology [and that] 73% of finance leaders expecting to boost AI staffing through 2025”. Currently, however there is a digital skills gap which is growing, illustrated when out of a pool of approximately 140,000 data science resumes, only 3,000 met the criteria for “superstar AI talent.” [Source: Gartner]
Take action: Financial leaders will need to relook at role criteria over the new few years and consider the best course of action to develop digital skills and improve digital literacy. Job descriptions will need to be clear about the skills needed and the value that experience in technology will have. Adopting a skills-based hiring approach can help organizations focus on the skills required over the traditional degree requirements. This will widen the talent pool and enable HR managers to source and progress candidates who have the best insight to progress into that role. Tools such as Pearson TalentLens’ Role Assessments can help organizations assess candidates who have the top skill and job fit through custom assessment batteries. Bringing data-driven confidence into your recruitment process and reducing the risk of a bad hire.
Reskilling and investment in skills
With an awareness of evolving skill sets comes the question of reskilling and upskilling current employees. Government research shows financial services have one of the lowest rates of investment in employee learning and development, and yet ‘91% of employees’ believe improved digital skills would support the introduction of technology; indicating that the lack of investment is holding talent back. With overlapping finance and tech industries creating new opportunities investment may be even more important for talent retention.
Take action: Conducting a skills gap analysis and working out what and where your gaps are can help HR Managers and CFO’s in their planning for the future. Feedback has shown that investing in employees improves retention rates and makes employees feel more valued and satisfied with their work. According to a Gallup survey, 71% of workers who undergo upskilling agree or strongly agree it’s enhanced their satisfaction with work. This in turn improves the company brand and the outside perception of the company, which is essential for potential new talent.
Psychometric tools such as Watson-Glaser™ can provide organizations with insight into how their teams perform and interact with one another. Whilst, considering the art of career planning and motivations via Which Career For Me could help individual and managers reassess the direction of their teams.
Talent taking flight
Retention is a big issue in the finance industry, 48% of finance leaders have seen their employees leave the finance profession. All of which impacts on employee wellbeing, productivity and team dynamics. This is driven by a mix of a lack of talent investment, the introduction of new technology changing the organization structure and changes in work-life pressures with a growing number of finance employees working outside traditional office hours. Since the pandemic office work has changed considerably. An increased demand for remote working has arguably led to a more mobile talent market – one which has facilitated greater worldwide recruitment.
Take action: Talent in the finance industry is in full flow, and talent mobility requires a strategy of its own Organizations need to consider what incentives' employees, how to fulfil the promise of learning and developing and the ways that flexible working can function to provide the work-life balance that employees are desperately in need of. Aligning values will be a key part of this approach and psychometric tools like SOSIE can help HR managers look at a person’s personality and values system to predict performance.
Social mobility
The finance industry still faces many issues around DEI and social mobility with women and marginalized groups underrepresented. Research from the ACCA indicates that there is a disconnect between inclusivity with 73% of leaders believing their organization is inclusive and the 32% who believe a low social-economic barrier is still affecting progression. Tacking company culture is an issue wider than sourcing financial talent and requires a company-wide approach for change to be made
Take action: Undoubtedly, widening your recruitment leads to an improved pool of candidates. Using tools such as Pearson TalentLens’ Role Assessments you can assess more candidates using data rich insights – quickly and efficiently. Decisions which are based on insight reduce the risk of candidate bias.
Future-proofing Talent Selection
Going forward talent selection in the finance industry has much to consider. It is an area that is not static but under increasing pressure to evolve with technology and adapt to changing external demands. Top candidates whose skill sets can evolve at pace are in demand but require a commitment to investment in L&D to enable them to stay. Creating skills-based talent pipelines informed by insights can help HR managers select and predict candidates who will perform well, which in turn will reduce cost and risk of mobility.
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