How financial institutions can attract talented job applicants
This year, the U.S. unemployment rate dropped to 3.9 percent, which is the lowest rate since 2000. The tighter supply of labor means community banks and credit unions are among employers struggling to attract young talent and fill valuable positions.
Retaining bank employees, particularly recent graduates, has become increasingly difficult, according to a Deloitte study. Sixty percent of banking-oriented students expect to stay at their first bank industry job for three years or less, and 34 percent expect to be there two years or less.
What’s causing this problem? Experts often point to two factors:
- Job expectations from graduates have shifted, and
- The digital talent gap, or the difference between the number of talented people with the knowledge of digital banking and demand for their services, has widened as new technology has emerged.
Today’s educated college graduates are bypassing the finance industry for more lucrative sectors, particularly technology. In fact, according to an Economist report, America’s leading business schools are seeing drops in students focusing in finance and consulting. Enrollment at MIT’s Sloan School dropped from 31 percent in 2006 to just 15 percent in 2016, while enrollment in technology-related majors soared from 12 percent to 33 percent at Stanford.
Despite the popular belief that fun perks, such as flexible work hours or free food, are the primary factors to attracting recent graduates, there other elements to consider.
Banks must prioritize training and hiring specific roles
According to the Deloitte study, banking students are most concerned about training and development, ranking it as the first of 40 attractive banking job attributes. The study ranks what attracts banking-oriented students vs. what banking-oriented students associate with the banking industry.
When a financial institution is utilizing modern technology like a digital banking platform that provides customers with online loan applications and provides employees with customer relationship management (CRM) software, workers recognize that they will be able to advance their own professional skills while working at the bank or credit union.
Given the growing importance of technology in banking, community banks must prioritize hiring tech-savvy employees and training new and current employees on technology implemented within the institution. As lending automation becomes more prevalent among banks and credit unions, the staff must know or be willing to learn new skills. One advantage of utilizing lending software that is easy to use is that financial institutions can more quickly train new employees and bring them up to speed, which helps productivity and helps the employee feel good about mastering a new solution quickly.
Young employees seek a higher purpose at work
Nationwide, banks’ popularity has plummeted since the 2008 Financial Crisis and recession, and as a result, their image as employers has suffered as well. After the financial crisis, technology companies landed several MBA graduates, who otherwise would’ve chosen a career in finance.
Millennials, who recently took over as the largest generation in the U.S. labor force, are known to feel negatively about business’ motivations and ethics. In fact, in the past year alone, the percentage of millennials who believe businesses behave ethically dropped 17 percent.
Driving true change within a bank’s recruiting efforts involves tapping into young employee’s intrinsic nature to fulfill a greater mission at work and intertwining the company culture with that idea. For example, financial institutions can emphasize the role that banks play within the community. While employees might improve the financial well-being of just one or two borrowers, their efforts can inevitably greatly affect the local economy and spur a resurgence of entrepreneurship. Smart bank leaders can leverage their recruitment messaging tactics and branding to drive recruitment and silence bank stereotypes.
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Money isn’t everything
As regulations continue to pressure banks’ returns, and therefore their ability to pay higher wages, some small banks and credit unions can win employees by strategically incentivizing employment.
While popular belief says free lunches or “bring your pet to workdays” are the key to attracting talent, there’s often other attributes in line with candidates’ career goals that banks and credit unions can leverage. According to the Deloitte ranking study, banks ranked poorly in several categories that potential candidates believe are important. They include:
- A creative and dynamic work environment
- A friendly work environment
- Professional training and development
Rather than trying to copy other firms’ “fun” benefits, community institutions should emphasize the career benefits of working within finance in their messaging. They should spell out how their institution is innovative and how they help workers in professional development. Community banks can adapt their employer branding and incentives around career goals and the workplace culture.
Reward employees who complete training programs related to innovative technology being used by the institution. Sign up the bank for a local soccer league to facilitate socializing and boost a friendly workspace. Encourage employees to think outside of the box, welcome opportunities that reflect employees’ interests and empower employees to take smart risks when appropriate. Once implemented, community banks can then use testimonials or in-person interviews that showcase their career-focused workplace culture.
The foundation of any business is its employees. Happy employees often lead to happy customers, so it’s critical for small banks and credit unions to be strategic when it comes to attracting and retaining candidates. The right hire will advocate for your financial institution, which will reflect positively to the community and spread the word about the bank’s excellent workplace culture.