Major Human Resources (HR) and Recruitment Challenges in Financial Services

This article discusses financial services' key HR and recruitment challenges.

Fremont, CA: The financial services industry is on the verge of the next wave of disruption. As the need for digitalization spreads throughout the industry, every financial institution invests in digital transformation initiatives to upgrade aging systems and improve operational effectiveness and customer experience. As a result, not only will financial institutions require increasing technology knowledge on their payroll in the coming years, but they will also require leaders who can effectively manage change.

These are some of the significant HR and Recruitment challenges faced in the financial industry:

The Skills Gap:

The skills gap in the finance business is growing all the time. based on a survey, nearly 70 percent of financial services CEOs viewed the availability of crucial skills as an obstacle to growth. Unfortunately, there aren't enough coders or data scientists who are also proficient in finance, and vice versa.

Shortage of Mid-Career Candidates:

 The problem is more than just a shortage of fresh-faced millennial grads; there's also a need for mid-career prospects.

The 2008 financial crisis and the subsequent poor economic years forced many employees to leave the financial services business, resulting in fewer mid- and upper-level professionals in today's financial services employment market. However, as the economy has improved, promoting confidence and growth in the business, such candidates are now in great demand.

Retaining Millennial Talent:

Employee retention is critical in an industry where only 10 percent of millennials expect to work long-term. Research and reports show that it costs thousands of dollars for an organization to hire a replacement if it fails to retain an employee, and that doesn't include the expense of severance and training a new employee. Most of the younger employees may not stay for long, meaning cost-per-hire figures may soon be piling up.

Creating an Attractive Company Culture:

According to LinkedIn's new Workplace Culture survey, eighty-six percent of millennials would take a wage reduction to work for a firm whose values they believe align with their own. In contrast, only nine percent of baby boomers would make the same decision.

Seventy percent of professionals in the United States, across all age groups, would not work for a leading company if it meant putting up with a lousy workplace culture.

According to the report, fifty-one percent of professionals today feel fortunate to work for companies that encourage work-life flexibility and equilibrium, and one of the primary explanations for why workers say they intend to remain at their company for the next five years is access to benefits such as paid time off, parental leave, and health insurance.

Job Seekers Have More Choices and More Power:

As high-tech talent and skilled financial services professionals become rarer, job seekers in this industry have the pick of the litter. Though financial services professions frequently offer market-leading salaries, as LinkedIn's Workplace Culture study reveals, more than this may be needed to recruit and keep the small amount of talent present.

Furthermore, the circumstance places talent in a position of power, and financial services businesses can expect lengthy compensation and benefits talks in the war for the top individuals.

These are some major HR and recruitment challenges faced in the financial industry. There are solutions to these challenges, too. It is necessary to take necessary actions and overcome these challenges.