When an eager young millennial shows up at your community bank with a rather brief resume, your gut reaction is probably to do what has worked in the past: Stick him or her in a one-size-fits-all teller booth and go back to work.
But placing younger workers behind a teller line or a new accounts opening desk and asking them to deposit checks and check balances all day with little prospect of upward mobility is precisely what drives them away. Banks need to scrap that old strategy. Right now.
The current talent gap at community banks throughout the country is noticeably wider than it’s ever been at a time when the industry’s direct competition includes some of the largest tech companies — as well as the biggest banks, hedge funds, private equity firms and other “prestige” employers.
True, competition is inevitably linked, at least in part, to compensation. Currently, entry-level tech jobs have more earning potential and capacity for upward mobility than those at community banks.
And yet, compensation for many young professionals doesn’t necessarily mean money. For many, they must see the inherent value in the work they do — a point we’ve all known for some time.
Therefore, it’s time for financial institutions to examine why — and how — their hiring practices need to change, lest they lose an unprecedented opportunity to tap into what will become one of the most innovative generations of young people in history.
Here’s a good place to start: Education and training opportunities — the means to an end many young people envision for themselves — are woefully deficient at many of the community banks I interact with regularly.
The absence of training opportunities — both internal and external — creates a significant disincentive for young people who want to make an impact for their employers both now and in the future. The sooner community banks recognize and tackle this problem, the sooner young professionals will begin to fill the bank’s ranks and coffers.
More specifically, community banks should allow entry-level employees to participate in cross-departmental decisions about platform conversions and let them sit in on brainstorming sessions on topics like how to improve the digital banking experience. Equally important is affording them opportunities to grow managerial or leadership skills and technical skills, such as learning how to code. Younger workers want to contribute.
A popular counterargument may be, “Why should my financial institution invest the time and resources to train these folks in our way of doing things if they’re just going to leave after 18 months?”
Well, they can’t embrace a future at your bank if one isn’t offered to them.
Say your marketing department brings on a young, digitally native employee fresh out of college. He or she is likely excited to bring fresh perspectives to a community-focused organization; however, he or she is immediately diminished when assigned to, say, maintain a direct mail campaign.
Ultimately, fresh talent will help organizations take advantage of new opportunities. Those raised in the digital age possess skills that are acutely relevant to community banks’ current needs. They bring an intimate understanding of digital strategy, a truly innate knowledge of user experience that borders on the instinctive and a mindful, embedded approach to mobile engagement. Unlike generations that preceded them, they don’t have to retroactively acquire these skills. They grew up with them.
Retaining these young workers, however, will require the bank to innovate and take risks in areas it previously didn’t. Offering better salaries and training programs aren’t the difficult part of recruitment and retention. Banks can easily implement those rewards over time. The real challenge is adjusting how banks think about this generation and how they utilize young talent on a daily basis.
The good news is that community banks and millennials could be destined for each other. Community banks have inherent purpose: They strengthen their communities and local businesses and build relationships with members of the community in ways big banks can’t. It’s the kind of purpose-driven career many millennials seek, and the kind they can be attracted to pursue if community banks are willing to invest in their young talent and the innovation that can come with it.