Financial Services Recruiting

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Financial Services Recruiting Best Practices

Some current best practices around recruiting candidates in the financial services industry are: 1) the utilization of AI in the recruitment process, 2) exploration for broader skill sets, 3) changing to an agile working environment, 4) proving the company's worth to candidates, and 5) utilizing attractive compensation packages to draw and maintain expertise. Below we have presented an outline of our research strategy, along with the relevant findings from our research.

METHODOLOGY

To identify some best practices around recruiting candidates in the financial services industry, we examined financial magazines and publications, including the Wall Street Journal and American Banker, as well as market research platforms such as Gartner. Additionally, we searched through recruiting expert platforms like the Spencer James Group. Using this research strategy, we were able to discover several lists of best practices. We then concentrated on those that were mentioned in at least two separate sources. Afterward, we compiled a final list of best practices, along with businesses that have employed such methods effectively.

CURRENT BEST PRACTICES FOR RECRUITING CANDIDATES IN THE FINANCIAL SERVICES INDUSTRY

USE OF AI IN RECRUITING

In financial institutions, hiring officers are using AI-based solutions in learning and development, recruiting, and skills management. As reported by Gartner, AI is competent in advancing "candidate fit." Nevertheless, it also influences indirect hiring expenses, "such as training costs and the loss of institutional knowledge." Recently, Citizens Bank NA, which acts as a subsidiary of the Citizens Financial Group, initiated a career mentor powered by AI, Myca, for around 1,500 of its employees during a pilot program. The program recommends new jobs, videos, periodicals, and training based on the individual's career interests. It is currently being experimented partially as a means of closing training gaps and pairing employees with open jobs that intrigue them.

SEARCH FOR BROADER NON-TRADITIONAL FINANCE AND ACCOUNTING SKILLS

Companies in the financial services space seek to hire people with various abilities, including intelligent tech security specialists to improve customer and internal confidence, compliance engineers, and data wranglers. Businesses are taking this route because of the steadily expanding complexity of the industry. Stripe, a FinTech company, provides online payment processing for internet corporations. Although it is a financial institution, the company puts significant emphasis on having some developers with broad, non-traditional skill sets on its team.

AGILE WORKING ENVIRONMENT

Numerous institutions (e.g., banks) are building a working environment that are agile by utilizing the scrum methodology, and recruitment managers are seeking suitable candidates that possess the correct mindset. Many are using agile development, which is a means of creating software in tiny masses and short spurts as opposed to a single big, tedious waterfall project. JP Morgan Chase practiced agile development to produce its brand-new website. The company attributed its swift fulfillment to its appropriation of an agile environment.

PROVING ONE'S WORTH TO CANDIDATES

Since candidates are typically interested in businesses that are regarded as excellent employers, brand reputation to these individuals as consumers is essential. Companies operating in FinTech have developed channels and spaces for engagement, such as Fraedom's training and crowdsourcing, to enable gifted people to exchange both industry data and skills. This particular action allows candidates to view the company as a place that promotes the development of skills and the distribution of information.

ATTRACTIVE COMPENSATION AND TRAINING PACKAGE

According to Gartner and American Banker, FinTech businesses have selected to administer enticing compensation packages to allure exceptional expertise and retain talent. MPower Financing provides each employee with a dedicated supply of funds that can be utilized to finance development courses and professional training.
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Financial Services Recruiting Trends

Companies in the financial services sector are diversifying their workforce, recruiting into AI and automation, opting for more casual recruiting culture, leveraging social media platforms, and recruiting more cyber security experts. Below is an overview of our findings.

Findings

To determine the recent trends around recruiting candidates in the financial services industry, we leveraged several resources by recruitment agencies such as TalentLyft, ISC jobs, and Montage Talent as well as various credible blogs and articles by industry experts. We have only featured the trends that are highlighted in two or more reports or articles. We only used resources that are not older than 24 months to ensure that all trends are recent.

Diversity Recruitment

The financial services industry is faced with a "changing customer demographics" as the much more diverse Gen Z and millennials accumulate wealth and disrupt the traditional systems of insurance and banking services. This has forced financial services companies to put more emphasis on hiring bilingual and racially or sexualy diverse candidates. Financial services companies are adopting this trend because statistics have shown that companies in the sector that have taken proactive measures to diversify their workforce have seen significant profitability boosts. KeyCorp, which recently hired a "Chief Diversity Officer," is among the financial services companies that are employing this trend.

Recruiting into AI and Automation

The financial services sector has become more digitized with the increasing deployment of big data analytics and automation technologies. Also, there is a growing customer preference for mobile technology with statistics showing that 75% of Americans used mobile apps to bank in 2018. As a result, financial services companies are recruiting professionals in technical positions such as data scientists and data engineers, though with a preference for those with some business or analytical skills. This has become a trend as financial services companies leverage intelligent automation and artificial intelligence to increase their efficiency, innovation, and sales revenue. RBC Royal Bank is one such example.

Casual Recruiting Strategies

Younger candidates are choosing to work in financial startups and fintech companies at the expense of larger financial institutions because they offer greater learning opportunities. In response, financial services companies are modifying their recruiting and workplace culture to provide the desired perks to candidates. Companies are breaking free from the "buttoned-up image" of the financial sector to attract candidates who are looking for a more relaxed working environment and to offer greater learning experiences. Examples of such companies are The Motley Fool and Scotiabank.

Social Media Recruiting

According to Reflik, recruiters are beginning to understand the importance of social media in recruiting the social-media savvy younger generation, and 2019 will see this trend increase even more. Companies are using innovative ways to attract potential candidates such as posting interesting videos profiling their work culture and benefits. My Accountancy Place and Morgan Stanley are examples of companies that are leveraging social media platforms such as Facebook to attract the younger talent pool. According to Ideal, about 95% of recruiters, for the financial industry and other sectors, use social media for recruiting.

Recruiting for Security

Financial services companies have access to clients' sensitive personal and financial information and recent cyber breaches such as the 2017 Equifax breach have increased their efforts to recruit cyber security professionals. Security is a top priority of the financial industry especially because 78% of consumers would avoid companies that have experienced security breaches. Globally, financial institutions are scrambling to recruit cyber security professionals amid a talent gap of approximately 3.5 million. According to TechRepublic, Capital One is among the top companies hiring cyber security professionals.
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Financial Services Recruiting Challenges

In this study, we found that the recent challenges around recruiting candidates in the financial services industry include evolving workspace culture, skills gap and lack of mid-career candidates, retaining Millenial talents, increased demand for non-finance and accounting talents, and competition to attract the best talents. Below is a detailed explanation of our methodology and findings.

METHODOLOGY

We initially started the research by identifying the recent challenges around recruiting candidates in the financial services industry from online financial services magazines such as Global Banking and Finance, recruiting expert platforms such as HR Services, HR Finance, and Personnel Today, newspapers such as The Globe and Mail, and financial services publications such as American Banker. From these sources, we found the recent and relevant challenges, the companies facing these challenges, and how they deal with them.

RECENT CHALLENGES IN RECRUITING CANDIDATES IN THE FINANCIAL SERVICES INDUSTRY

EVOLVING WORKPLACE CULTURE
86% of the Millennials would receive a salary reduction to work at a company with values that match their own values, while only 9% of the Baby Boomers would do the same. 70% of professionals in the U.S. would not work at a top company if it means tolerating a negative workplace culture. Ensenta attracts and retains talents by providing work-at-home option to the employees. Employees who come into the office regularly can enjoy regular catered lunches and in-office massages every month.
SKILLS GAP AND LACK OF MID-CAREER CANDIDATES
After the 2008 financial crisis and the succeeding low economic years, many people left the financial services industry. This means that there are currently fewer mid- and upper-level professionals in the financial services job market. Cross River Bank attracts and retains mid-career talent by providing incentives such as paying 100% of the premium for different insurance benefits that help employees and their families.
RETAINING MILLENIAL TALENTS
Only 10% of the Millennials aim to work with long-term focus, while the remaining 90% of the workforce might not stay for a long time, which means that the company’s cost-per-hire figures might continue to build up in the long-run. MPOWER Financing attracts and retains talents by ensuring that every employee has a dedicated pool of money to fund professional training and development classes.
INCREASED DEMAND FOR NON-FINANCE AND ACCOUNTING TALENTS
61% of the employers globally mentioned that they have faced moderate to extreme skills shortage in 2017 most especially technology skills. However, there are not enough developers or data scientists who are well-experienced in finance, and the other way around. Stripe, a company that provides online payment processing for internet businesses, considers developers to be its most important human resource.
COMPETITION TO ATTRACT THE BEST TALENTS
Companies are engaged in high competition to attract the best talents due to the high demand for specialized talents regarding financial services, and technology and customer services. Fraedom, a company of FinTech, availed open spaces for the best talents to exchange knowledge and skills in crowdsourcing platforms and training programs. The aim is to ensure that the company appeals to and attracts the best talents.
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