The introductory paragraphs of articles studying trends are all too often interchangeable. At the highest level there are always common trends throughout sectors, and we come across these again and again. Which industry is immune from demographic change, the advancement of technology and globalisation? In this article, we’ve probed some trends pertinent to banking and financial services, exploring them in some depth to consider how they impact HR in this sector.
Although the situation differs from country to country, after years of economic crisis there is now a more generally positive outlook. This means that the sector needs to be ready to deal with growing demand and new opportunities. If the entire sector is preparing for this, the consequence will be fierce competition to hire the best talent.
We’ve gone through these cycles before, so why is this still relevant now? According to a PWC Global CEO survey*, business leaders feel positive about growth, at the same time as questioning where and how it will happen. This optimistic outlook, combined with the structural impact of the following three trends, means that organisations can’t simply apply the same processes and principles that worked in the past. HR is no exception; talent management will need to be open-minded and apply new ideas in its practices and approaches.
There’s no escaping the advance of technology. It influences the sector in so many areas; there are too many to cover in this article. The internet and social media have had a huge impact on the way many organisations interact with their clients. The more complex jobs live on, but it isn’t uncommon to see automation replacing some lower value operations.
The expansion of technology has opened up the potential to access and explore a huge amount of data. Intelligent analysis of such data can support informed predictions, as well as portfolio adaptation and customisation. However, the existence of this data brings threat as well as promise, as it can be vulnerable to access from unauthorised parties. Cyber security is of the utmost importance for the whole industry and requires a new set of skills and competencies.
As internet use has increased, the world has grown ever smaller, and this means it is easier for new market entrants to compete. As communication becomes more distant, organisations need to look at how they can differentiate themselves and keep their clients, employees and candidates engaged. Our recent candidate experience survey showed that employers risk losing candidates from their selection process if there is a lack of personal contact.
Demographic shifts such as an ageing population influence the demand for financial services and consequently the skills or competencies needed for success in the market. As in all sectors, the banking and finance industries will begin to find generation Z entering their workforces, which means four generations will be interacting in the workplace.
Managers will need to be equipped to understand how to facilitate harmonious relations between these groups. In addition, they will need to know how to manage the younger generations, whose motives and values may be different to their older colleagues. In particular, their planned timescale for staying with a company may be very different to that of more mature employees.
Another interesting demographic change has been influenced by the way in which technology allows people to work and collaborate from a distance. This means that virtual teams can operate, hire and train people from disparate parts of the world, pulling in the skills they need internationally. This adds a multi-cultural component to the interesting dynamics of an already multi-generational workforce.
Contrary to the previous trends this one is less common across sectors. Because of developments in recent years, trust in this sector has diminished considerably. People have grown more sceptical towards banking and financial services companies. It is important that businesses in this sector build trust if they are to attract and retain new clients and talent. Compliance is central to this, and companies in the sector are working hard to keep up with all the new regulations.
‘Integrity’, ‘Customer focus’ and ‘Risk management’ are examples of values that are often prioritised in the branding, communications and internal processes of organisations working in this sector today. Exhibiting these behaviours is key, and selecting leaders, managers and employees that demonstrate them is going to be fundamental to the success of the industry.
According to the PWC survey, complying with regulation is currently consuming a great deal of resources. This makes it more difficult for organisations to deal with the challenges brought by other trends such as demographic change, the economic climate and advancing technology. All of these factors will have a structural impact on businesses and therefore on their human capital. HR plays a key role in readying organisations for the future, ensuring that the right skills and competencies are kept in-house by attracting and selecting the best candidates and identifying, developing and retaining the right talent.
In a fast developing environment, with fierce competition for the same or similar resources, HR needs to be able to operate quickly and efficiently. At the same time, processes have to be robust, well-planned and engaging. The decisions an organisation makes today will be of incredible importance to its reputation and performance in the future. The bottom line; HR - be ready, be quick, be thorough!
‘Key industry findings form the 17th Annual Global CEO Survey (banking & capital markets industry summary)’ and ‘Key talent findings in the financial services sector from the 17th Annual Global CEO Survey’ by PWC
Top 8 Workplace Trends In The Financial Services Industry (November 2013) by Dan Schawbel
2014 Kelly Global Workforce Index.