6 ways banks are competing for talent

December 8, 2022 4:23 PM

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In a highly competitive job market, banks looking to recruit are facing issues such as high turnover and an aging workforce, with simply not enough candidates to fill the open positions.

"It's a war for talent and everybody who's in a business that employs people is in that war," says Phillip Green, CEO of Cullen/Frost. "Whether they know it or not, they're fighting that war."

Here are six ways banks are trying to get the best workers they can find.

Banks struggle to stem tide of high turnover

Handsome salaries and generous benefits are not enough to stop the drain of talent from banks, as employees seek greener pastures elsewhere, according to a study by accounting and consulting firm Crowe.

"The industry cannot compete for talent based on compensation and benefits packages alone, so organizations must work to improve their training programs and culture," said Thomas Grottke, a specialist in financial services consulting at Crowe.

However, low unemployment rates and increasingly intense competition for top recruits from banking rivals as well as other industries mean that high turnover is likely to continue.

Read more:

Employee churn surges at banks despite pay hikes

Pilot program targets inner-city students for cybersecurity role

Cybersecurity has emerged as a critical area for banks in the wake of the pandemic, but with not enough qualified candidates to fill the positions available, Bank of America is working with the Liberty Science Center in New Jersey to target high school students in underrepresented communities to fill the gap.

The High Schools of the Future pilot program will run initially in two inner-city high schools in the state, which were chosen based on the diversity of the student body and the enthusiasm for STEM learning, but where financial and other pressures put students at risk of dropping out.

"This is really about creating an ultimate path for them to pursue an opportunity that they otherwise may not have had, given the high-risk nature of where they're going to school," said Alberto Garofalo, president of Bank of America New Jersey.

Read more:

Bank of America begins training high schoolers to be cybersecurity experts

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Jeanne Frank/Bloomberg

Can banks bridge the cybersecurity talent gap?

The talent gap in cybersecurity professionals in banking shows no signs of improving in the near future at a time when cybercrime is on the rise and the industry is losing the battle for a limited supply of qualified professionals to the tech industry.

"Twenty years ago, banks were able to attract top talent coming out of universities, as those new professionals wanted to work on Wall Street," says Mark Nicholson, financial services industry leader for Deloitte. Today, cyber professionals prefer the remote/hybrid work options and work-hour flexibility offered in the tech world.

How can banks change the narrative? "We need to start being creative about recruiting specialists from a more diverse set of disciplines into security and growing our own talent pipelines," says Chris Reffkin, chief information security officer at IT firm HelpSystems.

Read more:

Cybersecurity talent shortage in banking expected to grow

Talented refugees offer underused solution to recruitment crisis

An "underleveraged" pool of accomplished refugees with globally transferable banking and tech skills is ready to help solve the talent shortage in the industry, according to BMO Financial CEO Craig Alexander.

The bank's Newcomer Talent Program provides qualified professionals who have resettled as refugees in North America with the opportunity to utilize their hard-earned skills to rebuild their lives, and may be a template for others to follow in a market where recruitment is increasingly difficult.

"By and large, U.S. companies are incredibly welcoming of refugee job applicants, particularly in a labor market right now where there's a shortage of people to fill millions of jobs," said Erica Bouris, director of economic empowerment at the International Rescue Committee.

Read more:

Refugees offer untapped banking talent in tight labor market, BMO says

Competition for top talent grows as workforce shrinks

The latest battleground for banks is not the competition for customers, but the rivalry to find talented employees, with 70% of senior executives saying recruiting and retaining top professionals is a major challenge, according to a recent survey.

"As the economy is currently constructed, there are not enough people to go around," said Carll Wilkinson, CEO of the executive search firm Smith & Wilkinson.

The "war for talent" does not look likely to end soon; projections from the Bureau of Labor Statistics indicate that this year's labor participation rate in the U.S. will decline for a 13th successive year to 61.6% as the workforce continues to contract.

Read more:

Why the 'war for talent' will last

Fintechs target talent by standing out from the crowd

In a highly competitive market, fintechs are looking to gain an advantage in hiring over their big bank rivals by offering new recruits more flexibility in the workplace, embracing company culture and a focus on diversity.

"Compensation is obviously important — we need to be market rate if not better — but there is more to be focused on as we attract people," said Chermaine Hu, chief financial officer and co-founder of fintech Episode Six.

In the ongoing search for top talent, fintechs are focused on ensuring their employees do not feel like just another number in a large corporate entity, but are an active participant in a company where teamwork, diversity, culture and pride in what one is doing matter.

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Fintechs emphasize diversity in their search for talent