Why talent management is the biggest challenge in the financial sector
We make a bold claim in the title of this article.
Can talent management really be the biggest challenge in the financial sector?
What about technology? Cybersecurity? Winning and retaining customers in a highly competitive market? Anti-money laundering? Stringent requirements on liquidity and other tough-to-implement and tougher-to-demonstrate-that-you’ve-implemented-them rules in an increasingly burdensome and cross-jurisdictional regulatory environment? The list goes on.
And yes, these are each good contenders for ‘biggest challenge’ in this sector.
Common denominator
What unites them all? People. People are at the heart of success in these overlapping disciplines, and this is especially true in banking compared to many other industries. In fields like crop yields, supply chains, transportation and other sectors, success does rely on people but often doesn’t require the same high levels of expertise as in banking.
And banking isn’t unique in this regard, but it’s one of the biggest sectors to which this phenomenon applies. If you don’t get things right with your people – right when recruiting them, onboarding them and managing the full lifecycle of their employment – you won’t get things right with your business. This connection between people and business success makes talent management a critical factor.
Making this case is simple. Developing strategies to deal with it isn’t. But there is hope, and the first step is understanding why it’s like this. By recognizing the unique challenges and dynamics of talent management in the banking sector, you can begin to develop effective strategies to address them.
Understanding the problem
To an extent, these interconnected problems feed off themselves and worsen the challenge.
Technological advancements, many of which are crucial to the financial sector and fundamentally changing its nature, are marching at an unstoppable pace. This is putting a strain on overloaded staff, and a shortage in skilled labor is failing to plug the gap. With that strain left unchecked, burnout and churn tend to follow. It’s a seemingly intractable problem. If you understand this troublesome dynamic and know what to focus on, you have a chance at addressing it.
In fact, the Financial Services Skills Commission classifies 73% of roles as highly skilled, and 16% of finance professionals, equivalent to 160,000 workers requiring upskilling.The bottom line is that it only matters what you invest in your staff, and you can control this.
Crack it and you’ll attracttalent, retain them and reduce churn – and keep all that knowledge at your bank or financial institution and away from your competitors.
Foundations of a better strategy
At NTT DATA, our strategy is tailored to serve our clients in the financial banking sector, recognizing that a one-size-fits-all approach isn’t an option. Our strategy is built on three core principles designed to maintain a cohesive global talent pool: demand planning, internal fulfillment and effective external hiring.
Effective demand planning:This approach provides us with a clear understanding of our talent needs with adequate lead time. We work closely with our business functions across regions to understand their forecasts and prioritize looking for candidates internally before going to market. This foresight also allows us to keep career progression always at the forefront of our planning.
Internal fulfillment:Our ‘internalfirst’ approach is at the core of our Talent Acquisition strategy, ensuring employee progression is at the heart of our recruitment processes. We leverage internal talent by identifying individuals who are readily available or have the potential to be upskilled for new opportunities.
This approach is also centered on the idea that true competency lies in the practical abilities and demonstrable skills an individual brings. It is less reliant on narrow criteria like educational background, job descriptions and titles, which limit diversity and inclusion – a big no in recruitment. This focus not only helps career progression but also ensures we’re constantly upskilling our workforce and providing the best services to our financial sector clients.
Effective external hiring:When we hire, we ensure our Talent Acquisition teams are aligned to regions or specific countries to ensure fitment with local markets and business functions. We also maintain a centralized repository of all open career opportunities across the globe, which allows us to filter candidates in the early stages of recruitment. This approach may be more expensive initially, but it more than pays for itself in the long term by widening the talent pool. It also enables tighter collaboration with business functions and keeps us attuned to both global talent needs and availability, especially in times of endemic skills shortages.
By adopting a multifaceted approach that includes effective demand planning, an “internalfirst” strategy for talent fulfillment, and targeted external hiring, financial institutions can ensure they attract, retain, and develop the skilled professionals they need.
This strategic focus on people not only mitigates the risks of burnout and churn but also creates a more agile, knowledgeable and resilient workforce capable of navigating the complexities of the modern financial landscape. Investing in your people is the key to staying competitive and thriving in this challenging sector.
With this foresight, you’ll keep career progression at the forefront of your planning and maintain low staff turnover.
–By Sanjeev Kapur, Vice President of Talent Acquisition, NTT DATA