For an industry traditionally resistant to change, the financial services industry has been forced to make sweeping changes in its processes. In fact, even before the Covid-19 pandemic, they were in the midst of digital transformation. Digital competitors were already challenging brick-and-mortar financial institutions, robots are poised to replace 2,00,000 banking jobs in the next decade, and AI and automation were set to address the skills gap within the sector.
When the pandemic came charging in, these HR challenges in the financial services industry remained – and also brought with it a host of other challenges. HR professionals in the financial services industry were challenged by the pandemic that led to remote working at an unprecedented scale, Covid-related safety protocols for essential staff that work on-site, and remote work policies for others.
The result of this great upheaval? According to the survey from global public relations firm Ketchum, 52% of surveyed financial services sector employees said they were more burned out at work than they were before Covid-19.
With an already loaded plate of transformations to undergo, and another round of necessary changes to top off on the years before, HR professionals in the financial services industry have unique challenges to face in 2022.
Case Study: SBI Mutual Fund
SBI Mutual Fund is the largest mutual fund house by asset size in India and has been around for nearly 30 years. The institution is a joint venture between State Bank of India, the largest state-owned bank in India, and Amundi (France), one of the world's leading fund management companies.
The Indian Asset Management Company which traces a strong lineage and holds a strength of 1000-1200 employees, had already been using an older HR software platform for their human capital management needs. However, they were in search for solution that was more new-age, to meet the requirements of a post-Covid workforce and the financial needs of a nation recovering from the wake of a global pandemic.
After six-month long proof of concept and robust testing, SBI Mutual Fund chose peopleHum as their new age platform for their HR processes. This article will discuss the HR challenges in the financial services industry, with a special look at SBI Mutual Fund and how peopleHum helped solve their problems.
Let’s get started by taking a closer look at the top HR challenges in the financial services industry.
HR challenges in the Financial Services Industry
1. Feeling the pandemic stress
Pandemic stress has been a common issue for employees across many industries. However, volatile markets and an industry push toward automation have unsettled financial services employees, who are concerned that they will lose their jobs.
A study conducted by meQuilibrium, a digital resilience-coaching platform based in Boston, investigated the effects of the pandemic on employees in eight industries. According to Brad Smith, Chief Science Officer at meQuilibrium, employees in the financial services industry have the second-highest level of job stress and sleep disorders, and employee motivation has dropped 32%.
The pandemic has accelerated changes in the financial services industry that were already in the works, such as working remotely, embracing innovative technology like AI, and focusing on matching employees' skills to jobs. Because of the shaky economy, low interest rates, and the automation of some jobs, the industry is expected to experience layoffs. This could lead to a difficult period for the financial sector's workforce.
2. Staying connected virtually
Before the Covid-19 pandemic, only 29 percent of financial services companies had at least 60 percent of their employees working from home once a week or more, according to PwC's Remote Work Survey. This trend is likely to continue and even accelerate. 69 percent of financial services firms anticipate that 60 percent or more of their employees will continue to work from home at least once a week after the pandemic.
Executives felt that remote work helped employees and also increased productivity. According to meQuilibrium, 88 percent of financial services workers identified work-from-home arrangements as the most helpful type of support they received from their employers.
Employers in the financial services industry can track the level of engagement of remote employees by using survey tools to survey employees more frequently. Leaders can use online offerings to keep employees engaged with the company and its culture. Employee resource groups (ERGs) can provide opportunities for employees to connect and share advice, particularly for parents, minorities, veterans, LGBTQ employees, and women in leadership.
How SBI Mutual Fund drives more engagement
The objective was to drive up employee engagement with the help of a platform that could reinvent it and not weigh upon their existing operations. By adopting peopleHum's Employee Engagement module, they leverage its social media-type interface for company activities such as:
- Creating announcements
- Recognizing the best teammates and leaders
- Crowdsourcing ideas
- Enabling teams to voice their opinions; and
- Gamifying the training process.
3. Supporting employees
There is a strong link between employee mental health and the level of support they receive from their employers. Brad Smith at meQuilibrium states that, “In finance, as in many industries, employees are struggling and hurting. The value of employer support is powerful.”
As remote work has found employees living on the blurred lines between work and home life, leaders should encourage them to take time off. Everyone has been affected, from single mothers to new employees. Regular communication from company leaders can improve employees' sense of well-being and morale.
How SBI Mutual Fund increases employee productivity
With Productivity Management, managers can get a better understanding of their personnel’s productivity. They can add daily tasks for employees on the peopleHum platform, and employees can consecutively check in on their tasks. Managers can get an understanding of how many tasks were completed at the end of the day and also gain insights into productivity levels.
4. Making diversity a priority
The issue of diversity and inclusion has risen on the list of priorities, but attracting and retaining diverse talent is one of the major HR challenges in the financial services industry. When it comes to women and people of colour in the financial services industry, there are significant disparities. According to a McKinsey report from 2021, women — particularly women of colour — are underrepresented at all levels above entry level. It is particularly male-dominated at the highest levels of the financial services industry.
HR leaders must look for new talent beyond internal hires or recommendations from current employees. Work with staffing and executive search firms that specialise in diverse candidates to diversify the workforce. Bring in new hires with transferable skills from other industries.
Then, create a positive experience for these employees. This includes establishing employee resource groups (ERGs) or networking programmes. Mentorship and sponsorship programmes are two other methods of promoting inclusion.
5. Improving hiring and retention
Like every other sector, the high-pressure financial services industry has seen its share of hiring challenges. According to the US Bureau of Labor Statistics, job openings soared to 5,38,000 in January 2022, up from 2,76,000 the year before. So, to improve one of the greatest HR challenges in the financial services industry, Human Resource leaders must examine their hiring and retention strategies holistically.
- Reevaluate background checks
Federal regulations restrict who can work in the financial services industry. While credit checks are common in the financial services industry, human resource leaders should reconsider any blanket policies that exclude too many people due to their financial history.
Many people's lives were upended as a result of the pandemic and layoffs. HR leaders should advocate for being considerate of job candidates who experienced financial defaults during COVID but are in the process of addressing them or have resolved the issues.
- Create the ideal employee value proposition
Beyond a paycheck, today's employees seek meaning in their jobs. That is why, beginning with the hiring process for new employees, organisations must demonstrate their employee value proposition, or EVP. According to Gartner, a human-centric EVP that focuses on the individual growth, shared purpose, flexibility, deeper connections, and comprehensive well-being increases employee satisfaction by 15%.
- Examine your culture
“People don’t leave organisations; they leave bad cultures and bad bosses.”
Ensure that managers and leaders foster an environment in which everyone is treated fairly, and that internal policies and procedures ensure that team members have access to development opportunities and other resources.
The financial services industry is known for being conservative. However, the small details that make up a company's culture can have a large impact on the entire organisation. So, if dress codes continue to adhere to outdated standards, the financial services industry will struggle to attract top talent who prefer a more relaxed culture and attire over a buttoned-up one.
How SBI Mutual Fund creates faster and efficient onboarding
Now, SBI Mutual Fund can create their own onboarding flow. peopleHum can help in:
- Job requisition requests
- Direct upload and submission of applications
- Streamlined hiring funnel and marking inter view scores; and
- Easily sending job offer letters through the portal via email
All information and documents are collected up on peopleHum. With a complete recruitment solution at their disposal, the organization can create faster and efficient onboarding.
6. Recommitting to communication
Not only did the pandemic disrupt day-to-day operations, but the industry is also undergoing other major shifts that require HR leaders to recommit to communication efforts to ensure employees understand what's ahead.
HR departments in the financial services industry must increase their communication efforts, such as by holding in-person or virtual information sessions on the implications of a new merger or benefits package.
That communication should be ongoing rather than one-time. If difficult announcements must be made, they should be made one-on-one with plenty of time for employees to ask questions and receive answers.
How SBI Mutual Fund keeps communication ongoing with Projects and Timesheets
With peopleHum, the organization can make communication effective, enable project completion without any hassles, and avoid miscommunication. Managers can add projects for different employees and measure the time they spend on each projects. By enabling timesheets, employe can submit them to their managers on a weekly basis for approval.
7. Restarting training and skills development
Many finance firms have struggled to keep employees up to date as financial markets and technology change at a rapid pace. As more financial transactions are conducted digitally, these employers must invest in data visualisation and cybersecurity training.
It takes time, training, and communication to transition workers to new processes and technological advancements. At the same time, HR departments must foster more internal mobility to reduce recruiting and onboarding costs.
Training and education, as well as the establishment of a culture, have yet to take place in financial services industries. This is critical, however, because it informs employees about what's coming, helps them understand why the new software and solutions are important, and ensures they know how to implement them. It also helps to have a tech-savvy HR team because they not only present a better image of the company but are also the first point of contact for recruits.
How SBI Mutual Fund enables a culture of learning
Good assessment scores rely on the quality of learning culture that the organization sets up. With peopleHum’s Learn module, the organization can curate their own courses and materials by adding links and offline documents like videos, PDFs, etc. Managers can also measure the progress employees have made on their courses and create appropriate assessments. Through the platform, they can create standard reports based on course progress and assessment scores.
8. Evolving with its customers
The financial services industry has traditionally been conservative in its attitude towards remote work. The Covid-19 pandemic loosened its resistance to change. Moreover, customers now want to bank remotely, so banks need to make sure employees have new skills to deal with the changing demands.
So, rather than facing customers to be able to chat with them as they approach them for their banking needs, employees have to build and maintain relationships with customers using different tools. The HR challenge for the financial services industry is reskilling to operate in this environment.
One strategy has been to train "universal bankers." Employees are trained for a variety of tasks rather than being trained to work solely as a teller or a new-accounts representative, so that when one area of a bank branch is quiet, they can jump in and contribute elsewhere.
HR is responsible for educating employees about a variety of products, setting expectations with new hires, and screening potential employees for the temperament and skills required for the job.
Financial services professionals are looking for opportunities to advance and develop their careers. Organizations must recognise this and begin to consider creating a tapestry of jobs for employees to experience throughout their career development in order to develop the ability to attract top talent.
Employees are more concerned than ever about their careers and the skills they require. Millennials place a high value on training and professional development, and providing such opportunities is an effective way to retain top talent in an industry where people assets are a key differentiator.
How SBI Mutual Fund goes 360 with performance feedback
It is the truth that’s clear as day - the old method of performance reviews just doesn’t cut it for the modern workforce, even in the financial services industry. With peopleHum’s Performance Management, SBI Mutual Fund can: