We conducted a survey to find out what challenges are having the biggest impact on our customers. Let’s look at their top five answers and how financial services and investment firms can combat these common issues. As with other industries, when it comes to financial services, HR challenges also reveal opportunities for positive change.
1. Rewards and Incentives
Using rewards and incentives effectively was the most common struggle shared by the financial services and investment firms we surveyed. Incentivizing and rewarding employees for their hard work is crucial since it can aid in motivation. This issue is more crucial than ever since the pandemic left financial services workers stressed and caused employee motivation to drop by 32 percent, according to one study.
Employees want to feel valued and rewarded for the work they do. Why strive to meet a goal if it won’t benefit you at all? Engaged employees should already feel motivated to help the company succeed, but you can boost that motivation by offering individual incentives and rewards.
Make it meaningful.
Consider whether the rewards and incentives you currently offer actually inspire employees to do their best. Rewards and incentives can come in many forms, so don’t be afraid to get creative and choose what would mean the most to your employees. This could include:
- Extra vacation days
- A monetary bonus
- Gifts such as event tickets or swag
- Gift cards
The key is to find the perks that will really mean something to your employees rather than feel like a meaningless token.
→ Rewards and incentives are one of many tactics to increase employee retention. Download our Ultimate Guide to Combating Talent Shortages to explore more.
2. Diversity and Inclusion
Nearly 80 percent of employees say they want to work for a company that values diversity, equity, and inclusion (DEI) issues. Employers and HR professionals in the finance industry know this is a critical issue, and yet, as our survey found, many feel they’re falling short in this area.
Some HR leaders simply don’t know how to put these priorities into action. But employees see through DEI efforts that are essentially all talk—they want to see real, positive change that makes the workplace more fair and inclusive for all. Let’s consider some ways you can meet these expectations.
One important way to promote DEI in your office is by removing bias wherever it can creep into people ops processes, including hiring, performance reviews, and promotions.
Make your hiring processes inclusive.
DEI begins with the hiring process. Take a critical look at your job ads, interviews, and other aspects of your recruitment process to ensure they are free of possible sexism, ageism, racism, or other forms of prejudice. Even if you don’t intend to discriminate against certain groups, you may inadvertently discourage some from even applying through job ad language that seems to favor a certain type of person.
Ensure performance reviews are fair.
Performance reviews play a pivotal role in informing talent decisions and succession planning. Unfortunately, bias can easily compromise performance reviews, which can hurt employees and your organization. The solution is to bring in more objectivity through performance calibration. Calibrating performance ratings ensures all employees are evaluated fairly.
Provide equal opportunities for advancement.
Even if you’re happy with the level of diversity in your company overall, consider whether that diversity is represented at the managerial and executive levels. Research shows diversity is often most lacking in these higher positions. To ensure you promote employees fairly, you must have a transparent and fair process for promotions in place. All employees should have an equal opportunity to advance their careers and become leaders in your organization.
3. Leadership Bench Strength
Leadership bench strength is another challenge for HR departments in the finance industry, and it’s well worth some attention. How confident are you that members of your team are well poised for leadership positions?
Perhaps even more importantly, do some of your managers show promise for someday leading the company in executive positions? In a recent study, only one in three CEOs said their frontline leadership quality was “very good” or “excellent,” and only 38 percent of CEOs rated their mid-level leadership as being of high quality.
If you’re discouraged by the next generation of leaders you see in your organization, ask yourself what steps you are taking to prepare employees for more advanced roles. You can’t leave this important determiner of your firm’s success up to chance.
Foster employees’ leadership potential.
Invest in employees’ professional development to help prepare them for leadership roles. This may include training, mentorship, and other measures that foster employees’ growth and impart the skills they need to move into more advanced roles.
Use succession planning.
You should also use succession planning to evaluate your team’s leadership bench strength and identify the right successors to lead your company forward. Succession planning can also help you assess retention risk—another crucial issue for investment firms today.
Many HR challenges in financial services are shared by a variety of other industries. This is certainly the case when it comes to employee retention. All industries are struggling with retention right now during a phenomenon that’s been deemed the “Great Resignation.” Employees are quick to seek out other opportunities since their skills are in high demand.
Employees leave for a number of reasons, including dissatisfaction with their corporate culture, disengagement in their current role, and discouragement from a lack of advancement opportunities.
You can limit turnover and boost retention by focusing on addressing these issues. Seek to foster a positive workplace culture that leads to higher levels of employee engagement and a strong sense of belonging at your firm.
Offer frequent feedback.
One way to drive engagement is by giving financial services employees frequent feedback. Ongoing performance feedback lets employees know how they’re doing and can help them work more proactively to achieve their professional goals.
Provide advancement opportunities.
Having a clear path to promotion is also key so employees feel confident they can grow their careers right there at your firm. If they don’t see a clear path to advancement, they may feel they need to look for a career advancement opportunity elsewhere.
5. Talent Shortages
Closely related to retention is the issue of talent shortages. The majority of financial institutions across the globe say they are failing to innovate due to a skills shortage. Clearly, this is a critical issue facing HR in financial services.
This issue is closely related to the issue of retention since both challenges are contributing to investment and financial services firms’ struggle to consistently meet their talent needs. When you lose an employee, replacing that employee can be a serious challenge.
Don’t settle for a short-term solution.
So, what can you do? Many companies’ response is to focus on recruitment. However, financial services and investment firms should first focus on improving retention to solve their talent shortage from within. Boosting your recruitment efforts won’t provide a solid long-term solution if you’re struggling with retention since vacancies will continue to affect your team and your firm’s success.
As we discovered, improving retention comes down to foundational things such as solid performance management and a future-focused approach to helping employees succeed and advance their careers.
Meet Challenges Head-On with Talent Management Solutions from viaPeople
If you’re dealing with the challenges we looked at in this article, you’re not alone! These are common challenges facing HR in the finance industry. If you want real solutions to help you meet these challenges head-on, viaPeople is here to help. Learn more about making the most of your team’s talent in our Ultimate Guide to Combating Talent Shortages.
Ultimate Guide to Combating Talent Shortages
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