Difficulties in finding and retaining talent have become both a challenge and a risk for companies across geographies and industries. This issue is further amplified as firms increasingly embrace new technologies and their growth strategies rely on new skills to enable the returns from these investments.
Banks, for example, have invested substantially in technology – in areas including cloud, artificial intelligence, core operations, and cybersecurity – which increases their reliance on tech-savvy talent. Banks are finding, however, that people simply cannot keep up with the pace of technology and change. As a result, the desired benefits from applying many of these technologies, such as speed, insight and agility, are often simply not being realized. The lack of talent needed could lead to execution risks, shortfalls in customer service and potential compliance issues.
Other factors compound the problem. People discovered during the pandemic that they have more career options than they might have thought, as work from home and virtual working models became the norm and demand for skilled workers greatly outstrips supply. The pandemic has enabled greater transparency about wages, benefits and also what companies are (or are not) doing to address work-life balance issues. In parallel, the work from home model has decreased the friction involved in moving from job to job. Consider that roughly 4.4 million Americans quit their jobs in February, marking the ninth straight month that resignations exceeded 4 million per month.
Most companies haven’t caught up with the need for change in the workplace. And our research, in fact, shows that industries like banking and finance need to do more to create engaging and positive cultures focusing on the employee experience. These companies tend to pay well and offer good career opportunities, but that alone is no longer enough. The industry’s structure, culture and practices need to continue to evolve to attract talent and retain existing employees, many of whom are ideal targets for other companies looking for their skills.
And increasing compensation typically does not solve the problem; there is not a strong link between compensation levels and attrition over extended periods. Organizations can pay well, but still have a poor culture and typically continue to lose talent. Compensation alone cannot overcome a poor culture.
Lots of work to do
The talent issue is real, important, and critical. There is a gap between executives’ perceptions of what their people need and employees’ perceptions of what their companies should do to support them. To close this gap, companies need to take a more human-centric approach, with particular attention to areas such as:
· Employees’ physical and emotional well-being
Giving workers a sense of purpose and meaning in their day-to-day work