Accelerating talent acquisition and mobility to transform your bank

Talent Acquisition has a critical role to play in banking. With expectations and needs turned on their head, it’s under the spotlight.

Unprecedented demand for skills…

A much-touted ‘great resignation’ or ‘great reshuffle’ followed the pandemic, with more than four million people in the US voluntarily leaving their jobs in May 2022. And while recent turnover has dropped off this peak, it’s still running hot in many areas.

In banking, it’s a dynamic that’s playing out in priority workforces like wealth, corporate banking, credit risk and sustainable finance. In all these areas, demand for talent is high and skilled supply constrained – especially in key markets like Singapore, which recently overtook Hong Kong to become Asia’s top financial centre.

There’s some softening, as the investment banks contract hiring, but activity remains above pre-pandemic levels. We’re seeing particular constraints for the transformation-enabling skills required in technology, data, security and complex change where banks compete with each other, other industries and ‘big tech’ for the same talent pool. Even India’s vast technical labour market is heating up, with its prominence as a fintech centre accelerating demand, particularly in digital banking.

In a market where almost four in 10 organisations plan to increase hiring in the next six months, many companies find they’re having to increase pay, offer bigger and better benefits and boost job flexibility. This places even greater pressure on banks’ cost-bases, which in most cases remain stubbornly high.

Warnings of recession have, so far, had little to no impact on the historically low levels of unemployment. The market is likely to soften a bit overall, but this is against the backdrop of reduced economic participation rates constraining overall supply and scarce skills creating particular hot spots, so the issue isn't going away.

Like a leaky hosepipe on a hot summer’s day

With all these factors in mind, it’s hardly surprising that Fortune 500 CEOs cite talent and skills shortages as the single biggest threat to their business today, ahead of the energy crisis, supply chain instability, security threats, inflation and changing customer expectations.

This may be because these short-term uncertainties demand a more agile workforce with the flexibility to adapt in a skilled way. On top of that, longer-term strategies need to be compressed to deliver faster value, and CEOs recognise that the skills to innovate and drive scaled change are either the greatest enabler – or the greatest brake – on transformation.

In such a hot labour market, banks are finding it harder to source, attract and retain the right people, both to fill existing positions and to ensure a healthy pipeline of talent to enable transformation today and into the future.

Up to now, however, many banks have under-invested in Talent Acquisition and the function has suffered through a cyclical level of interest from management. In many cases, it has been seen less as a strategic lever, but rather as a commodity service where the goal is to reduce cost per hire to the lowest point possible.

Most banks are still targeting traditional in-industry sources of talent, unable to accurately pinpoint skills internally or externally. Hiring is often reactive to fill gaps and rarely seen in combination with other talent levers. Hiring processes, often slow and transactional, have high dropout rates. Onboarding is often disjointed and transactional. In the current market conditions, this under-investment has been seriously exposed.

As one client recently described their current talent challenge to me: “It’s like a leaky hosepipe slowly filling a leaky bucket on a hot summer’s day”.

Expectations have changed forever

The issues exposed in the current market are not just about process efficiency or a hot labour market. There has been a deeper and lasting change in candidate and colleague expectations and their desired experience.

What people expect from work changed during and following the pandemic – accelerating the world of work’s transformation across all sectors and geographies. One key factor? The pandemic forced a ‘mass experiment’ in remote and flexible working which, for many, proved to be a moment of reflection on personal and professional priorities. For some people that has meant leaving the labour market. For most it means big changes in their expectations and desired experience of work.

While pay and continued employment remain important factors for ‘good’ work (and ones where banking typically does well), our research and experience show that people expect work that’s attuned to their human needs. Let’s be honest, they always did, but now it’s expressed openly and people are more willing to move for it.

A few examples. People want greater autonomy and flexibility at work, through which they’re empowered to manage what they do, their working patterns, careers and growth. They want more human care from their employer and leaders, with an emphasis on their mental, physical, social and financial wellbeing.

People want to belong to something worthwhile – they need an inclusive and psychologically safe work environment to fulfil their full potential and to feel connected wherever they work. They want to do meaningful work in a purpose-led organisation, where they can live out the values that matter to them. And they want authentic and empathetic leadership and collaborative teams.

Peak drivers of performance

Wow, so many demands? Be careful: this is more than just a topic for Gen Z or Millennials. These expectations have changed across the entire workforce and they really matter to a bank’s ability to attract and retain the best talent. Crucially, these same human care factors are the primary drivers of performance and productivity, especially in a hybrid work environment.

To address this, banks need to show up differently and with a different proposition in the jobs market – as well as taking steps to retain existing talent every day. It’s not just about new words or a nice advert. The proposition needs to be honest and reflected in the lived experience of work. People are looking for authenticity and will leave quickly if the reality doesn’t match the promise.

At the moment, a gap remains between worker expectations, executive attitudes and the lived experiences of work within banking. On many of these human care factors, while other industries made gains, banking fell backwards over the last couple of years and the worker-executive gap widened.

Within the Talent Acquisition process, banks should be taking an experience-focused approach to sourcing, hiring and onboarding, viewing the whole process as a connected journey from interest, to application, selection, offer, contract and pre-employment checks, through to onboarding and first-year support. Across this approach, it’s vital for Talent Acquisition to be delivering the right brand and employee value proposition-aligned experience at all the moments that matter, with inclusion embedded at every stage.

So starting to transform Talent Acquisition is more than just fixing a leaky pipe. It begins with banks truly understanding what they expect from their people, what their people expect from them and how this can be matched in real-world experience.

Taking the opportunity

One key consequence of all this? Having been under-invested and viewed as a commoditised function for years, Talent Acquisition is now becoming a top priority for banks, viewed as an integral part of an end-to-end strategic approach towards talent. This is not about investing in more of the same, but a new way of approaching Talent Acquisition.

Its remit is becoming much wider too: Talent Acquisition now embraces internal mobility between jobs and projects; skills-based sourcing and selection; the attraction of all employee segments including early-years apprentices and graduates, specialists, mass hires and executives; and an increasing focus on alumni and returners.

Some are bringing together a total workforce view of employees and external workers with procurement, with onboarding and integration beyond day one a priority. This service scope goes beyond what a recruitment team traditionally did.

Banks that think about Talent Acquisition strategically as part of an end-to-end talent strategy – and invest in this – will see the flow of talent they need to create workforces that can enable new levels of performance today and accelerate transformational change.

 Unlocking internal mobility

Historically, banks, like most organisations, have focused on selecting the person with the best CV and qualifications for a specific and narrowly defined job. Careers have been built mostly around vertical progression within narrow business and functional siloes.

Internal mobility matters more in a world where roles are changing frequently, people expect to move around more and flexibility is needed with more agile working. 

Many banks are looking at their skills data and establishing a skills taxonomy to provide a common language or currency across different talent processes. And many are seeking to source and select more candidates based on transferable skills and potential across a variety of roles, rather than just their qualifications for an immediate job.

An even greater number of banks are new-skilling or reskilling parts of the existing workforce, at scale, into new roles or materially different versions of existing roles, displacing external hiring volume and creating career options for existing employees.

This includes being able to search for employees based on existing skills and experience – and for colleagues to be able to find opportunities that are of interest and relevance for them. Most banks have internal job boards, but some are starting to take advantage of talent marketplaces, such as Gloat, that use artificial intelligence to more dynamically match people with opportunities. Beyond this democratised mobility, these capabilities are also being used to address strategic workforce gaps through targeted new skilling efforts.

Enabling the employee to take these opportunities is essential. And there are a number of prerequisites for doing so. Making the value proposition attractive and lowering the perceived risks of movement to the individual. Ensuring that learning paths have a sufficient blend of formal learning, coaching and communities, and practical hands-on experience to get people ready to do a future role. Creating a manager culture that encourages new skilling and mobility, rather than blocking moves. And making sure there are sufficient real roles that people can take.

Of course, while it’s vital, there’s much more to all this than facilitating internal mobility. Talent Acquisition needs to identify new skills in new places, offer these people more flexible workplace dynamics and make sure they feel like they belong in the organisation – from the moment of application to onboarding and beyond.

These are all issues I’ll be examining in my next blog, along with how Talent Acquisition can take advantage of technology advances to fast-track progress in all these areas. Thanks for reading.

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