The banking industry is one of the few industries not known for “openness to fast change,” technological or otherwise. This is because banks deal with a lot of sensitive information, so it makes more sense to go with what works best – examples: people strategies that have worked flawlessly in the past, technology that has worked flawlessly in the past, etc. Change is the last thing they usually look out for.
But this changed with the pandemic. The pandemic forced banks to go through some crucial changes that were not all usual for them. HR leaders in these banks were forced to lead remote teams, IT heads were tasked with providing top-notch security and equipment for these employees who worked from home, and the employees themselves were pushed to adapt to the new normal.
These circumstances gave birth to newer challenges that the banking industry faces today. Let’s find out.
Problems with implementing HR solutions in the banking industry
Feeling Continuous Strain:
Pandemic stress, as an emotion, has turned out to be a common problem for employees in many industries. Especially when entire families spend time working and learning in close quarters and under uncertain economic conditions, it is bound to leave members of that family feeling anxious. In addition to this problem, banking workers have also been unsettled by volatile markets and a futuristic trend that is pushing the industry towards automation.
According to an independent study performed by meQuilibrium in eight different industries, employees working in banking or other financial services companies reported the second-highest level of sleep disorders and job stress (only behind tech industry workers). This is a concerning statistic. Furthermore, according to this study, employee motivation also dropped 30% in employees who worked in financial services.
The pandemic has acted as a catalyst, speeding up changes in the banking services workforce that were going to be inevitable. Remote working, adopting better tech like AI, and focusing on accurately matching the skills of their employees to their actual jobs were just some of the changes that would be implemented sooner or later, irrespective of a pandemic happening.
According to PwC’s Remote Work Survey, just 30% of financial services companies had at least 60% of their employees working from home once a week or more before the COVID-19 pandemic began. Today, this rate of remote work has not only gone up, but the trend of working remotely is likely to continue with industry forecasts predicting at least 70% percent of companies to have more than 60% of their staff continue working from home at least once a week after the pandemic settles down.
Upper management was also on-board with this arrangement because remote work increased productivity, according to the same survey. Moreover, 88% of banking employees identified WFH arrangements as the most helpful form of support they received from their employers, according to meQuilibrium, a digital coaching platform.
People appreciate getting connected. Setting up employee resource groups around common interests like pets, knitting, exercising, Lego building, films & television series, parenting, minorities, veterans, LGBTQ employees, women in leadership, etc., provides a chance for employees to connect, share advice, get to know each other better, and form strong bonds with each other, especially in a high-stress banking work environment.
Everyone is great at doing something. Such resource groups and platforms allow people to mentor each other on subjects that could be useful for a lot of people, like meal-prepping or maximizing banking credit card points, etc.
Such connections are difficult to form in an office-based setting which can be a problem when it comes to forming deeper connections with other employees.
Also read: RPO Is It Right for Your Business?
Valuable Employee Support:
Studies have shown there is a strong correlation between the mental health of employees and how much support they felt they got from their employers or direct managers. Like many industries, in banking, employees are stressed out, which causes them to struggle and burn out eventually. Therefore, the value of employer support is much needed, which can be highly impactful.
Something as simple as giving the rest of the day off or offering full reimbursements for mental health therapy sessions, elder care, or childcare has the ability to have a tremendous impact on some people who need it the most. Most employers will have the bandwidth to offer such concessions, but the biggest problem is that they do not take the initiative.
If a desperate employee comes to ask for help or concession, they will happily move forward with their request, but they will never announce to everyone the availability of such help. This is a classic case of caveat emptor – let the buyer beware. This benefits employers and hurts employees because most employees assume that they will never get the help they need from their employer or are too fearful or shy to ask for help. This pushes them further down the road they try so hard to come out of.
Upskilling Existing Talent:
As technology and financial markets evolve rapidly, many banking companies have experienced a struggle to keep employees updated. Such employers need to invest heavily in cybersecurity training and data visualization courses because of how more and more banking business is conducted digitally today. At the same time, HR managers need to create more upward mobility within companies, which helps in minimizing onboarding and recruiting costs.
Upskilling often means reducing the existence of manual tasks and using technology to automate more processes within a function. HR, especially in this context, needs to upskill itself on digital tools to serve employees and candidates better. HR also has an important role to play in ensuring that new talent does not get impatient and bored in the very formal culture of the banking world.
The millennial and Gen-Z generation of employees is thinking more than ever about their own careers, the skills they need, and the popular training. Providing such opportunities to your employees is a highly effective way to retain top talent in an industry where people are the only variable that makes your business a success or a failure. Invest in strategic HR by placing a high value on attracting and retaining top talent. If employees are well taken care of, clients will always be well taken care of too.
The financial services sector consists of a wide range of businesses that include banking, insurance companies, credit unions, mortgage corporations, investment funds, and stock brokerages. The years following the 2008 financial crisis have seen this industry forced to deal with increased regulation, higher capital requirements for banks and insurers, and the need to implement robust processes across the board. Furthermore, customer expectations regarding service quality have skyrocketed. Against this backdrop of rising compliance costs, capital requirements, and customer expectations, we will be looking at human resource outsourcing as a strong contender to combat the problematic HR issues that plague the financial services industry today.
The case for outsourcing your human resources has three main arguments:
- The swelling pressure on operational margins meant that it made financial sense for firms to outsource non-strategic functions to specialist firms. These specialists leveraged economies of scale, deep functional expertise, and lower labor costs to deliver savings.
- Best-in-class service providers can add value by actually implementing and managing industry-standard processes for support functions such as HR – a boon for large financial institutions with operations in far-flung corners of the globe, as well as for small and medium-sized enterprises which lack the resources and/or expertise to manage these areas effectively.
- Outsourcing enables businesses to focus on their core competencies. The argument is that shareholders will be better served if the business maintains a laser focus on what they do best while outsourcing the rest to “specialists,” who will likely do a better job than the firm.
High-level thoughts to guide the outsourcing decision
The primary aim of the decision to outsource is often margin improvement by cutting costs. Outsourcing partners are further expected to bring in process efficiencies or improvements by virtue of their domain experience while keeping customer experience intact. Bearing in mind these three criteria – cut costs, improve processes, improve, or at least maintain customer experience – will help firms identify activities that are most apt for outsourcing and effectively administer outsourcing programs.
Need help? Exela HR Solutions offers world-class HR outsourcing services to businesses across multiple geographies and industries. Speak with our experts to learn more about our offerings.
Sources: google.com | en.wikipedia.org | reddit.com | shrm.org | gep.com | scirp.org
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