How to attract and retain talent when large technical and fintech employees are laid off

OBSERVATIONS FROM THE FINTECH SNARK TANK

Current economic conditions – combined with the wave of layoffs among fintech and Big Tech companies – may dampen the so-called “great resignation” in 2022, but don’t tell the banks.

According to the 2023 What’s Going On in Banking study by Cornerstone Advisors, nearly nine out of 10 banks continue to experience challenges in hiring new employees or retaining existing staff – if not both.

Layoffs at fintechs and Big Tech companies like Amazon should give banks plenty of candidates to fill vacancies, right? According to Forrester Research:

“Increasing layoffs among fintechs will cut loose talent that banks will take on. In addition, concerned fintech engineers, data scientists and others will look at job offers from banks that suddenly look more stable than their own firms.”

Don’t bet on it.

If these people are so inclined to work for a bank now, why didn’t they go to work for a bank for take a job in a fintech?

Probably for one – or both – of two reasons: 1) They wanted a more entrepreneurial environment, and/or 2) They wanted an opportunity to make a lot of money (fast).

Reality (for better or for worse): Banks cannot offer any of these benefits.

What works for banks when it comes to hiring and retention

The Cornerstone study identified practices that financial institutions find successful in hiring and retaining staff:

• Paying for talent. According to Kristy Smith, SVP Senior Operations Officer, at First Oklahoma Bank, “We pay top dollar in our local area and have great benefits – but we expect a lot more out of our employees, working with smaller staff in some areas and having little or no downtime.” Carl Casper, Chief Operating Officer of Connex Credit Union added: “We built an automatic pay rise for our frontline staff on their anniversary date and that has made people persevere.”
• Adjustment of guidelines for working from home. Carrie Birkhofer, CEO of Bay Federal Credit Union said, “we are 100% remote in the back office, so employees can relocate and still work for us, and we can attract talent we wouldn’t normally have access to.” American Eagle Financial Credit Union VP of Operations Pam Villanova said the credit union has “a hybrid office and back office work environment, so we’re seeing a lot of interest in those roles, especially as other financial institutions insist on a full return to the office.”

American Eagle’s work from home (WFH) policy is becoming the industry standard as nearly two-thirds of financial institutions now have a hybrid policy where staff split their time between working from home and in the office.

The bigger challenge in the fight against the big dismissal

Raising wages and changing WFH policies are good tactics to help banks attract talent and sell them, but they can easily be matched by other companies. The challenge for the banking industry is to reshape the industry as the place for socially conscious and active people to work.

Whether the banks like it or not, fintechs have done a better job over the last decade of branding the “we’re here to improve society” position in the minds of consumers and (most importantly for the purposes of this article) job seekers.

In so many ways, this is just fundamentally wrong. The number of stories banks and credit unions can tell about their contributions to the communities they serve would outnumber fintech stories by (at least) 100 to one.

A challenge for the thousands of community-based banks and credit unions in the U.S. is that none of them, individually, can meaningfully improve the perception of the industry as a whole (conversely, however, it is possible for a handful of the largest U.S. banks to reduce the industry’s reputation ).

Beyond the pay and WFH tactics, there are two strategic adjustments that community financial institutions must make to combat the Great Resignation:

• Market yourself as a great place to work. Marketing in most institutions is set up to promote the company’s consumer and commercial products and services. It needs to be changed to include marketing the organization to job seekers.
• Make talent management a core competence. According to Cornerstone Advisors partner Terence Roche, “hiring talent in a few key areas such as analytics, digital marketing, payments and fraud is not enough – talent development must become a core operational mantra.”

The underlying challenge – and goal – here is for banks to make themselves “cool” (the irony here is that’s probably not the right word to use, but I’m too “uncool” to know).

The shine comes from fintech with the steep devaluations, layoffs and negative news reports (eg JPMorgan Chase sues a fintech for falsifying customer numbers). There is a great opportunity for the banking industry to remake itself for a new wave of job seekers.

For a free copy of Cornerstone Advisors’ 2023 What is happening in the banking system study, click here.