By Joseph Lowe
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 are struggling more than ever to attract young talent and fill valuable positions.
Attracting and retaining bank employees, particularly recent graduates, became increasingly difficult in the wake of the financial crisis, according to a 2013 Deloitte study. At that point, 60 percent of banking-oriented students expected to stay at their first bank industry job for three years or less, and 34 percent expect to be there two years or less.
Has that changed? Deloitte has not updated that data, but experts continue to point to two complicating factors:
- Job expectations from graduates have shifted.
- The digital talent gap—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 college graduates seem to be bypassing the finance industry for what they feel to be more exciting or lucrative sectors, including technology. According to an Economist report, America’s leading business schools are seeing drops in students focusing in finance and consulting. Enrollment in finance 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 like flexible work hours or free food are the primary factors 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 attributes about banking jobs. The study ranks what attracts banking-oriented students versus what banking-oriented students associate with the banking industry.
Community banking institutions will benefit from offering extensive training around an employee’s new role, and focusing on training even seasoned employees at the institution in the latest approaches and technologies. Given the growing importance of technology in banking, community banks must prioritize hiring tech-savvy employees as well as ensuring continued training around new digital and automated solutions being implemented within the institution. The quicker a new employee learns the ropes, and the greater their efficiency and output, the more satisfied they’ll feel in their position.
Offering a higher purpose at work.
Millennials, who recently took over as the largest generation in the U.S. labor force, report an increase in negative feelings toward business’ motivations and ethics. In fact, in the past year alone, the percentage of millennials who believe businesses behave ethically dropped 17 percent. It will be essential that banks project their attention to ethics and purpose, convincing young job-seekers of the positive impact these institutions can certainly have on their communities and the country.
Driving true change within a bank’s recruiting efforts involves tapping into young employees’ desire to fulfill a greater mission at work and finding ways to build the company culture around this mission-driven focus. Focusing on the role that banks play within the community—and helping prospects understand the impact a single employee can have on the financial well-being of real people and businesses—will pay off for institutions seeking dedicated talent. Smart bank leaders emphasize these themes in their recruitment messaging and branding to both drive recruitment and influence public perception of their bank on the whole.
Money isn’t everything.
As regulations continue to effect banks’ returns, and therefore their ability to pay higher wages, some small banks can win employees by strategically incentivizing employment.
While popular belief points to free lunches or “bring your pet to work” days as the key to attracting talent, it’s likely more effective to focus on supporting candidates’ long-term career goals.
Rather than trying to copy other firms’ “fun” benefits, financial institutions should build their messaging around the long-term career benefits of working within finance. They should spell out the ways their institution is innovative and how they facilitate their employees’ professional development. Banks can adapt their employer branding to reflect the positive aspects of their daily workplace culture that exist currently. They can also take steps to create a culture that includes more of these elements. Here are a few ideas:
- Encourage employees to participate with the bank in outside activities to facilitate a culture of inclusivity, innovation and work/life balance—the kind applicants are seeking.
- Reward employees who complete training programs related to new, innovative technology being used by the institution.
- Sign up the bank for a local soccer league to facilitate socializing and physical activity and boost office familiarity among coworkers.
- Encourage employees to think outside of the box, welcome ideas that reflect employees’ interests and empower employees to take smart risks on new ideas where appropriate.
Once a well-rounded and development-focused workplace culture has been established, community banks can use testimonials or in-person interviews to showcase and promote it through social channels and their website.
The foundation of any business is its employees. Happy employees often lead to happy customers, so it’s critical for banks to be strategic when it comes to attracting and retaining candidates. The right hire will advocate for your financial institution as both a place of work and a place to bank, so making changes now that will satisfy and empower your own employees is a great start to attracting the ones you want down the line.
Joseph Lowe is the commercial lending marketing manager at Sageworks, a financial information company.