Financial services sector resource management outlook: Highlighting Human Resource Management to Win the Financial Services Talent Wars. Last year the COVID-19 pandemic generated more upheaval in the financial services sector than perhaps any other. ProSymmetry explains the types of challenges financial services were up against last year and what they’ve been doing to help these organizations win the financial services talent wars going forward.
The Financial Services (FS) sector has historically been susceptible to unpredictable market shifts and externalities — but the past year has generated even more uncertainty in areas such as workforce stability, economic recovery and growth, and the future of investments.
FS organizations must ensure strategic planning covers their human resources while seeking ways to adapt to changes and respond to emerging challenges. Without developing a clear human resourcing strategy and systematic performance management, organizations will miss opportunities and become exposed to increased risks. McKinsey’s research shows organizations with effective performance management are 77 percent more likely to outperform competitors and peers. Digital transformation and the new gig economy are only a few compelling reasons for organizations developing and maintaining their people strategies.
There are many benefits of developing and maintaining human resourcing strategies, here are just some that top the list.
- Enhanced organization-wide transparency into all resources and work
- Becoming better equipped to react to disruption, especially during times of crisis
- An increased desire to more accurately forecast resourcing requirements
- The need to optimize workflows, especially as companies grow their remote workforce
Out of all of this emerges an FS organizational desire and ability to re-engage, innovate, and differentiate — not just in traditional areas but also through new business models. Thus, making organizations more powerful magnets in areas such as human, financial, and emotional capital.
3 Financial sector drivers in the talent war
There have been three primary drivers of the talent wars across Financial Services sectors in recent years, many exacerbated by COVID-19. Here are some other drivers.
1. Talent scarcity in a hyper-competitive market
Several things create talent scarcity in this hyper-competitive market. Competition with Big Tech for the same skills and experience, creating a fierce talent war amid a global digital transformation. FS companies seek financial talent and tech specialists as their operations are undergoing automation, shifts to remote work, and the need to offer digital customer services via desktop and mobile apps. Critical FS roles exist in software and application development phases, new risk management roles, and digital marketing. The need for FS to deliver a better customer experience.
2. A shifting and uncertain financial workforce
Often called the “Open Talent Economic,” there’s an ever-growing base of independent contractors that allow organizations to increase their workforce’s flexibility and responsiveness significantly. This provides increased flexibility to scale a workforce to meet demand and deliver innovative projects without tying up internal resources. Ongoing mergers and acquisitions across FS have created major workforce shifts. Even without external pressures or conditions, most Wealth Management CEOs are likely to increase headcount, and over 20% of CEOs in Insurance and Banking, and Capital Markets are likely to decrease theirs.
3. The need for data to improve talent decisions
Digital transformation can pose many challenges, but it also provides FS organizations with a wealth of valuable data that may not have been accessible previously or in abundance. Unfortunately, not many companies are taking full advantage of this opportunity. Surprisingly, many FS organizations have yet to recognize the need for data analytics to find, develop and retain their talent.
Raw data does not enhance decision-making. Driving value requires data that has been systematically gathered and transformed into actionable insights that can be clearly communicated to decision-makers. This involves the use of readily available powerful analytics tools. And those who can “harness data, advanced analytics, and behavioral science to make faster, better, and more sound human resource and organization decisions — with a level of specificity previously unavailable. It’s important to note; talent wars are not won just by outpacing the competition. Talent cultivation and retention should be part of a larger business strategy, primarily because your people are the ones executing it.
How resource management addresses the FS talent war
For resource management to truly optimize time for project teams, it must be about more than a few extra hours to recover from overwork; it should ensure that work is done with balance and without burnout. Ultimately, project managers and employees should have complete visibility into their capacity. Project or resource managers should be able to answer these questions:
- How many projects are assigned to each individual?
- How much of their time is allocated to each project?
- How much time is actually spent on each project?
- What are the project interdependencies, constraints, and potential impact factors (delays, budget issues, sick leave or personal time, etc.)?
It’s essential for FS to quickly and easily identify bottlenecks and visualize cross-project allocations—as well as heat maps and supply-demand analytics to visualize over and under allocations.
Manages skills, competencies, and scenarios
Resource management helps FS organizations improve how they manage skills and competencies, conduct scenario planning and what-if analyses to show them where to expect externalities’ impact on their resource and project portfolio.
These organizations can make sound decisions while navigating significant changes. Resource management also ensures that FS can use their data to simulate resource constraints and optimally prepare to address externalities’ challenges. Organizations can model potential scenarios without altering their live data.
Reports information using robust data
Effectively managing resources is also leading businesses in planning for future needs. Competitive and visionary companies can formulate future resource needs in light of their strategic plans. Improving strategy execution tooling and running what-if analysis features also play a vital role in identifying resourcing needs over the near and long term. Having access to the right tools, displays, and reports to clearly and visually communicate your organization’s skill, role, and competency shortfalls is essential these days. This can easily help quantify organizational skill deficits, identify opportunities for re-skilling, and identify the skills to source externally.
It’s important to recognize that strategy is just an idea that relies on finding, hiring, and retaining the right talent. With the help of a human resource strategy aligned directly with a larger business strategy, talent can be captured in the ultra-competitive FS market and thrive in their work and contribute enormous business value. Having the right talent, for the right word, and at the right time, changes and challenges can be met with flexibility, insight, foresight, and, most importantly, resilience. Find out more about resource management in the financial services sector.