3 Trends Impacting Future Hiring Strategies in Banking and Finance

Banking and finance sectors are going through major shifts amidst announced layoffs and workers going back to the office following reverted work-from-home policies. Many are also expanding operations to global locations, adjusting to shifts in regulations and changes in workforce demographics. As banking and finance resume hiring, they will need to refine their hiring strategies to keep up with these complex shifts accordingly. In this blog post we’re going to discuss three important trends in finance in banking to keep in mind when hiring in the future.  

1. Expanding to Global Locations

Banking institutions are expanding operations due to stricter regulations, to diversify risks, optimize costs, and enhance global competitiveness. As a result, they will have to familiarize themselves with the labor markets across these new locations to find the right talent while maintaining compliance. To do so successfully, they can take the following steps:

Invest in Talent Intelligence

Real-time rate data for locations across the globe will help finance and banking institutions get the best workers at optimum rates, while ensuring they also aren’t underpaying either. Consulting with on-the-ground, local experts will also assist in validating labor market trends and contribute to better informed decision-making in hiring. (Dive into the latest shifts in the labor market when you download our report).

Partner with an Employer of Record

As finance organizations design compliant global workforce programs, keeping local regulations and legislation in mind is a must – otherwise they risk dire consequences, including fees, lawsuits, or a compromised reputation and employer brand.

In order to navigate the evolving regulatory landscape with confidence, organizations can partner with an Employer of Record (EOR). An EOR helps optimize compliance by providing up-to-date and ongoing in-country expertise, offers the necessary guidance to classify all workers correctly, provides payroll services, enhances worker experience, and more. Learn more about finding the right EOR partner in our blog.

Recognize Cultural Nuance

Before even starting to hire globally, finance and banking organizations should undertake a cultural discovery process. Once they’ve decided which locations they will tap for talent, they should invest the time and resources to understand local cultural expectations and needs. When they begin hiring and onboarding, they can demonstrate their appreciation of cultural nuances by making small gestures. Working in partnership with a local expert to provide guidance can also go a long way in this regard, so new workers can feel welcomed to the organization. 

2. Evolving Cryptocurrency Landscape

The cryptocurrency landscape is undergoing various developments across the world, from legislative proposals in U.S. Congress aiming to create clearer regulatory frameworks for digital assets, to discussions of licensing requirements for crypto asset service providers in the European Union. These upcoming changes will have a major impact on the talent banking and financial institutions need to hire to ensure they remain compliant and knowledgeable in various disciplines, which will include roles like compliance officers, risk management professionals, legal advisors, IT and cybersecurity experts, and more.

According to Magnit data, over the past year the top in-demand skills in the U.S. for Accounting/Finance are:

• Finance
• Accounting
• Excel
• Compliance
• Risk Management

Additionally, the top sourcing locations for this talent in the U.S. are:  

• New York, NY
• San Francisco, CA
• San Jose, CA
• Lehi, Utah
• St. Petersburg, Florida

As the talent needs of finance and banking sectors evolve with ongoing changes, they may need to adjust how and where they source talent. Deploying a skills-based strategy is one way to attain talent with in-demand skills across different locations, helping to retain a competitive edge. 

3. Adjusting for the Workforce of the Future

Talent demographics are going through major changes across the globe due to a combination of low birthrates, baby boomer retirements and other factors at play. As Gen Z continues entering the workplace, it’s expected to make up 27% of the workforce by 2025. With this growing population, finance and banking organizations that are looking to get ahead in the war for talent have a lot to gain by focusing on attracting and retaining this segment. But to do so, they need to understand what it is important to Gen Z workers as they evaluate new opportunities.  

Strengthen the Worker Experience

The worker experience starts as soon as candidates familiarize themselves with the organization and is essential, since the difference between a good or bad experience can make or break accepting an offer. Not only that – 70% of companies see an improvement in quality of hire when they invest in developing a positive candidate experience. Modern talent demands a smooth, primarily digital hiring process. Technology that facilitates efficient tasks is crucial for attracting top talent, such as:

• Resume uploads and parsing,
• Two-way communication with hiring managers,
• Interview scheduling,
• Automated onboarding and offboarding

Organizations can build upon a positive candidate experience and provide an excellent worker experience through tech, such as a Vendor Management System (VMS), as well as offering benefits workers value by partnering with an EOR.

Provide Benefits that Count

Benefits can be a key differentiator in securing talent. While retirement options, payrolling and health benefits are essential, Gen Z specifically appreciates flexibility as well. This can come in the form of family leave policies, flexible hours, and hybrid working models.

Interestingly enough, as more banking institutions have asked their workers to return to the office, research reveals that 74% of Gen Z actually prefers a hybrid working model and only 11% prefer to be fully remote. By starting out in their careers remotely during the pandemic, they’ve missed out on the networking and skill development that come with collaborating with coworkers in person. As such, providing benefits like professional development and learning opportunities will also be a major differentiator to attracting this workforce to banking and finance institutions.

Focus Efforts on Inclusion and Environmental Stewardship

Diversity, equity and inclusion (DE&I) is a high priority for Gen Z and it is the most ethnically and racially diverse generation. Additionally, 93% of Gen Z state their decision to accept a position is influenced by an organization’s overall impact on society, so banking institutions can demonstrate their commitments to related tangible action in several ways.

Organizations can show their dedication to creating diverse and inclusive environments by approaching hiring with diversity in mind, whether by utilizing bias-blocking technology during resume screening or providing inclusivity training to hiring managers. They can also invest in creating a DE&I program utilizing data to measure ongoing progress and set realistic goals across the organization. (See how multinational automotive manufacturer, Toyota, achieved its diversity goals in our case study.)

Another key priority for Gen Z is their concern for climate change and its impact on the environment. According to Deloitte, 46% of Gen Z have or are planning on changing jobs due to environmental impact concerns, and 59% research an organization’s environmental impact and policies before accepting a position. As such, banking organizations looking to draw this talent in can benefit from launching their own sustainability programs and demonstrating their progress and future commitments via annual Environmental, Social, Governance (ESG) reports.

Moving Forward

As banking and finance industries continue to go through major changes, they will need to find the right partners, utilize modern tech, and adjust their talent strategies to ensure they can keep up with shifting demands while remaining flexible.

Interested in refining your contingent workforce strategy and enhancing the total worker experience? Check out our white paper, “Unlocking the Power of the Extended Workforce: 5 Leading Practices.”

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.