Finding and retaining top talent has become challenging as well as a risk for organizations in all industries that find themselves competing with each other to fill the void in the growing numbers of job vacancies. Changing technologies, COVID-19, and the “Great Resignation” have all substantially contributed to this new work frontier, creating both challenges and opportunities in building and maintaining a solid employee base.
The issue has become a growing concern for financial institutions, particularly within the banking sector. In 2020, only 27% of US bank executives polled in an industry survey said the ability to attract qualified talent was a concern. By the end of 2022, that number had risen to 67%. Additionally, in 2022, banks experienced a 23.4% turnover rate, up from 16.2% the previous year.
Banks in general have also been slower to invest in technology such as cloud, artificial intelligence, and cybersecurity, which increases reliance on a workforce that is tech-savvy. While they are catching up, smaller financial-technology organizations have been quicker and more agile to adapt to a changing market, attracting younger workers – millennials in particular. As the largest working generation, millennials have grown up with technology from personal computers, smart phones, and social media, and want to be in a field that embraces technology at the highest level.
High salaries and benefits, often a technique used by banks to attract talent, are less important to millennials and are not enough to draw them. While compensation and opportunity for advancement are still important, they are more interested in working for a company that makes a positive contribution and gives back to society. Work-life balance issues, family leave, and the remote or hybrid work model also rank high in importance.
Many young people see banking as a static industry, to combat this perception the industry must creatively meet the technological challenges and demonstrate to recent graduates the viability and flexibility a career in banking can offer. For the foreseeable future, the industry will need to work on establishing a culture that is engaging and is focused on the employee experience in order to attract and retain talent, which is the backbone of any profitable and successful organization.
“Tracking, acquiring, and retaining talent has become more challenging in recent years,” comments Cynthia Burke, first vice president, human resources director of Unity Bank, which has locations in northern and western New Jersey and in Pennsylvania. “Mergers and acquisitions, new technological advances, an aging workforce, and the after-effects of COVID-19 have created a number of new challenges that have never been dealt with before.”
According to Burke, while compensation and benefits will always appeal to prospective employees, in today’s workplace they are not stand-alone items. “We’ve looked at the hiring process and have revamped our onboarding to extend beyond the first day. While that day is extremely important, it is not enough. We initiated touch points that allow us to stay in contact and periodically meet with new hires to make sure they are assimilating within our culture and to learn more about any needs or concerns. This helps us to pivot early on in making needed changes that we may not be aware of.”
Fun is also an important aspect of Unity’s culture. The Employee Events Committee offers lunch giveaways, goat yoga, and charcuterie workshops, for example, so co-workers and management can gather outside of the workplace. Volunteer opportunities, such as picking vegetables at a local farm that will go to food pantries also come with some perks as well. For every two-to-four hours of volunteer time, employees are given back four hours of personal time off.
Kearny Bank, headquartered in Fairfield with 43 branches throughout New Jersey and the boroughs of New York, has also found some challenges, but has been fortunate in not only successfully recruiting talent, but in retaining it as well.
“Many of our employees have been with the bank for decades, including myself, starting as a teller out of high school and moving up the ladder to a director position,” says Kim Manfredo, senior vice president of human resources. “We approach our relationship with employees the same as we do with our customers; we are a community and are here to help one another.”
The bank, which has experienced prosperous growth for more than 100 years, has embodied a culture of supporting employee growth as well. “Employees are afforded opportunities and pathways to learn new skills, move upward in the organization, or to be at their best in their current position,” Manfredo continues. “In addition to generous benefits and competitive salaries, we offer mentoring, health advocacy, and wellness programs, all of which are important in addressing our employee needs and will help to sustain their longevity with the organization.”
COVID-19, and its impact on the traditional “workplace” has changed the way current and prospective employees think about work, according to Steven Klein, chairman and CEO of Northfield Bank, which has branches in northern and central New Jersey and New York. “We, and many other employers, have team members who: prefer to work remotely as much as possible; prefer to be in an office setting full-time; or prefer a hybrid work arrangement. The biggest challenge we see is balancing the needs and wants of both the employer and team member. For Northfield, we have found that a hybrid work environment is the best solution, allowing us to foster professional development and collaboration and provide our team members with a positive work-life balance.
“In addition to a well-defined hybrid working model, we have been proactively conducting stay interviews with our team to gain insight on what motivates them to remain with our company and to learn what more we could be doing to enhance our workplace culture and opportunities,” Klein continues. These stay interviews provide Northfield with invaluable feedback and perspective on ways to engage team members. Other initiatives are to continually evaluate their total rewards program, including compensation and benefits to ensure the bank remains competitive, and innovative in meeting the varied needs of team members.
As the baby boomers retire and Gen X and Y continue to move up the ladder, the banking industry will need to look at the next demographic, Gen Z, which is projected to be 27% of the workforce by 2025. In order to appeal to them, it will be necessary to retool marketing and recruitment strategies. This generation, as with millennials, has a doubtful view of banking as they see the sector as older, behind the times, and antiquated. They are not only digitally savvy, but also have a desire for a career that will be interesting and creative, a place where they can use their skills and talent.
“Many young people who are considering their career paths may overlook banking as an option and think that being a teller or working in a retail branch are the only choices, when there are many other options,” notes Manfredo of Kearny Bank. “Cybersecurity, fraud investigation and analysis, accounting and audit are areas that are in demand. They play a key role in the banking industry and will continue to grow over the next decade.”
As the workforce generations begin to shift, the conversation needs to be directed to high school and college students about the benefits of a career in banking. Educational programs, career fairs, internships, and partnerships, such as the two-year pilot program that Bank of America and Liberty Science Center in Jersey City have partnered on, allow students at two New Jersey high schools – James J. Ferris High School in Jersey City and Memorial High School (MHS) in West New York – to train and prepare for jobs in cybersecurity.
Unity Bank sponsors a robust banking internship program. College and high school students spend a semester working within various departments such as loan and deposit servicing or in accounting. “This internship program has helped us to not only educate young people about the benefits and opportunities in banking, which is greatly needed, but to recruit new hires as they are ready to enter the workforce,” comments Burke.
“My advice to a high school student who is considering a career in banking is to be curious and strive to experience all areas in banking. Accounting, finance and management skills are important, but people skills are critical,” notes Klein. “Banking is all about community and the people in the community. Those individuals who understand the purpose of banking, and can make a connection to those in the community, will be more likely to be successful.”
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