How To Deal With the Labor Shortage in Banking and Financial Services

The labor shortage in banking and the financial services industry is a real thing, but don't let it stop the work from getting done.

It's no surprise that banks, institutions, and money managers struggle to find and retain talent.

In its 2018 report, Korn Ferry predicted a worldwide talent crunch by 2030, with the effects of a labor shortage being felt as early as 2020.

The report mentioned the financial services sector would be among the hardest hit, and it could result in $435 billion in unrealized economic output for the industry.

And we hear about the shortage all the time from our clients and prospects, which is why they talk to us (more on that later).

As the pandemic drags on and social/technological changes continue, it's unlikely things go back to a pre-pandemic normal.

Entering a "new normal," banks and investment firms need new ways of dealing with staffing shortages for years to come.

4 Ways to Solve the Labor Shortage in Banking and Financial Services

1. Banks and Investment Firms Should Make Hybrid Work a Permanent Fixture

"People who have the option to work in a hybrid model are better able to manage mental health challenges, have stronger work relationships and plan to stay with their companies a long time."

- Yaarit Silverstone, Senior Managing Director and North America Lead for Talent & Organization / Human Potential at Accenture

An Accenture survey found that among US-based financial services firms, there was an increase in employee productivity from remote work since the pandemic started.

What's more, another Accenture report found that 63% of high-growth companies have already adopted a "productivity anywhere" work model. That same report found that 83% of workers prefer a hybrid work model.

Meanwhile, 69% of negative or no-growth companies are still focused on where people are going to physically work, favoring all on-site or all remote rather than hybrid.

The stats speak for themselves.

During this pandemic, employees value their health and their time more than ever.

To put it simply, if you don't adopt a hybrid work model, you will lose out on talent.

It's a tight labor market, and you need to make your firm an attractive work option. Otherwise, your competitors who offer hybrid work models will gain at your expense.

2. Allow for Flexible Work Schedules

Employees have lives outside of work, and employers who acknowledge that will fare better in a tight labor market.

By offering flexible work hours, employees will appreciate that, and they are more likely to reward you with quality work and loyalty.

Pretty soon, word will spread that your company offers not only a hybrid work model but also flexible working hours. Sure enough, you'll find yourself with more job applicants than before.

Just think of the everyday situations in life:

  • Dropping off and picking up kids from school
  • Going to doctor and dentist appointments
  • Getting the car serviced at the mechanic
  • Bringing kids to sports practice
  • Taking the dog to the vet
  • Taking care of elderly family members
  • Staying home to let in the plumber and fix a leaking pipe

Have you ever had an employer that gave you a hard time when you needed time off for those very situations?

If so, that experience probably left a bad taste in your mouth. A little sympathy and understanding would've been nice.

Amidst a labor shortage in banking and financial services, it's more important than ever to break that cycle of inflexibility.

Sure, you can set expectations for what needs to be done, and some things are time-sensitive, like high-priority meetings and report deadlines.

But for everything else, let there be some flexibility.

3. Banks and Investment Managers Should Reconsider Hiring Standards, Look Beyond Degrees

Does every applicant really need an MBA or advanced degree?

Of course, give notable consideration to those who've earned a degree in a relevant field and demonstrate a skill or quality that shows their potential. Get the most out of them by having them doing high-level work that utilizes their educational background, plus financial/analytical skills.

But when you look closer at other work, is there anything that can be done without a specific degree?

Some of the work, while not necessarily "high-level," just requires self-motivation, attention to detail, consistency, and being a solid team player. It's the kind of stuff you can't always see on a résumé.

If you exclude someone simply because they didn't graduate from x university with y degree and have z years of experience, you will lose out in this tight labor market.

In short, expand the talent pool by looking beyond the academic checkboxes. Pay closer attention to the qualities that demonstrate potential: good work ethic, good character, and a willingness to learn.

4. Hire an Outsourced Team of Experts for Your Bank or Investment Organization

At the end of the day, banks and investment firms can do everything in their power to improve the company work culture and expand the talent pool, but even that might not be enough.

This labor shortage is not going away any time soon, especially when you consider companies like Citigroup, which plans to fire unvaccinated employees. Should other firms follow suit, there will certainly be more openings to fill.

In any case, hiring headhunters, sifting through applications, and interviewing multiple applicants takes a lot of time. Even after you hire them, it may take a few weeks to train and get them up to speed.

... yet you have work that needs to get finished right now.

Download Our White Paper, Making Outsourcing Work

One solution is by hiring a team of outsourced experts like Empaxis, which works with banks and financial institutions. What makes us attractive is that we've spent years perfecting the art of investment operations services.

At Empaxis, we've spoken with several organizations who've come to us because they're dealing with that labor shortage in banking and financial services.

These firms have middle- and back-office work that needs to be done regularly, and our team takes care of it. Banks and money managers save a lot of time and effort by working with us. Basically, we've already done the hiring and training for you; you just use our team as needed.

Not only that, we help firms automate the more manual and routine of processes. It's in our interest to the do work as efficiently as possible, and the automation tools we've developed help us do just that.

Banks and Investment Firms Shouldn't Let Staffing Shortages Slow Them Down

There is certainly a labor shortage in banking and financial services, but you have ways to stay ahead.

Be more flexible in terms of where and when employees work. In addition, be more flexible in your hiring approach.

Flexibility doesn't mean letting go of expectations in the workplace; it just means that you're offering a more favorable work environment for your employees. More likely than not their work performance will increase, as studies have shown.

But even if you're more flexible, it won't solve staffing shortages things entirely. Be open to hiring a team of outsourced experts. In addition to supplying labor, they will help you automate your workflows.

If you would like to learn more about how Empaxis helps banks and investment organizations, feel free to have a chat with us. It's entirely complimentary, and we'll help guide you in the right direction.

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