Talent's tight in the financial services industry. Is your firm ready to implement strategic talent decisions to fill the gaps and meet business goals?
Financial institutions are struggling with a shortage of the right talent within a sea of available labor. Roles are becoming more difficult to fill as mismatches between available talent and the talent institutions need are becoming more and more evident. Facing ever-growing pressures to reduce costs, business leaders are being handed an impossible task: do even more with less.
A variety of factors contribute to the talent challenges currently faced by the front and back offices of financial institutions. But where do you start? Having an objective, robust approach to talent assessments can lead to smarter, more strategic talent decisions and position organizations for profitable growth. We believe these institutions should align business strategy to every aspect of the talent assessment process.
PwC’s Suyoung Sebastian and Bhushan Sethi sat down to discuss talent in the financial services industry. The following questions and answers highlight the importance of filling talent gaps strategically within a financial services organization.
Q: Talent was one area of focus in PwC’s 2013 financial services CEO survey. What did the survey find?
A: In that survey, 56% of the financial services CEOs considered the lack of availability of key skills to be a threat to growth prospects.
Q: In addressing talent issues, what are the top challenges facing the financial service industry?
A: When we talk to our clients, we see that this industry is going through a lot of change—regulatory, business-model, and technology change. There’s a huge cost pressure on the industry. These changes demand different types of talent, and, more specifically, different types of competencies. The competencies that come into sharp focus include the ability to embrace operational excellence, spark innovation, and drive more of a client-centric as opposed to a product-centric view within an organization. That’s a profound change for some of our clients.
Q: How does an organization identify the talent that will help make this shift?
A: Any time you have this level of change across an industry, you expect that changes in skills also will be needed and that people will be moving from one organization to another. We find that a lot of people are looking for jobs in financial services, but they do not always have the right skills that a financial services organization can use. For business leaders, talent assessments provide some answers to fundamental questions: What talent do I have? What talent do I need? How do I close the gap between the two? A talent investment is forward looking and identifies competencies that are important today and in the future.
Q. When you speak about competencies, what exactly do you mean?
A: Competencies are the key skills, experience, and knowledge that employees need for on-the-job success in specific roles.
Q: Why is a talent assessment an important tool in improving a financial service firm’s ability to find the right people?
A: With limited dollars allocated to talent, organizations need a tool to help them make strategic decisions about where they invest those dollars. A talent assessment gives organizations the data they need to make those decisions about where to invest, who to invest in, and how to get the talent they need.
Q: Why can’t traditional performance management processes work to fill talent gaps?
A: Traditionally, organizations use a performance management or annual review process to assess individuals. That process is backward looking—focusing on an individual’s past performance. A traditional performance management process also doesn’t provide an aggregate view of talent strengths and gaps across functions and business units. Nor does it identify how and where best to invest limited talent dollars. A talent assessment is forward looking. It evaluates those competencies that are important today and can be used to identify the competencies that will be important in the future.
Q: What are some examples of how talent assessments are used?
A: We have seen some organizations leverage talent assessments to demonstrate to regulators that they have the depth and breadth of knowledge to be able to manage risk. Other organizations are using talent assessments to more precisely pinpoint cost reductions and avoid clumsy across-the-board cuts that may unintentionally trim valuable resources needed elsewhere in the organization. More broadly, organizations are using talent assessments to determine how best to grow their workforce and to make those workforce planning decisions with the highest impact and the least cost to the organization.
Q: How is a talent assessment implemented?
A: For organizations to effectively implement talent assessments, they start with competencies. They need to understand, in detail, those competencies that are important today, and those that will be important for the future. Competencies include the key skills, experience, and knowledge that employees need to be successful in specific roles. Once the competencies have been identified, the next step is to objectively assess where employees are—not just based on internal comparisons, but rather against industry standards or benchmarks. This allows the data from talent assessments to give companies information about where their talent gaps are and how they compare against industry standards. It’s also important to implement an action plan to close any talent gaps that a firm identifies through the talent assessment. Specific actions that might come out of a talent assessment include investment in training and development, or recruiting and selection for bringing in new skills.
Q: What insights can result from a talent assessment?
A: When we work with clients, we look at what each business function is trying to achieve; how that relates to the business strategy; and what technical, behavioral, and leadership competencies are needed for the future. We work with clients to assess their workforce against those competencies, and come out with analyses, insights, and recommendations to help them make better, more strategic talent decisions. After conducting a talent assessment, business leaders can expect to gain insight and answers to these questions:
Q: How will talent assessments enhance business performance in the future?
A: Talent assessments enable organizations to improve their return on talent investments. Companies that fail to implement talent assessments or neglect to effectively use talent assessments will likely not make the most strategic decisions or best use of their investment dollars. As we look to the future with our clients, the competencies designed today need to enable the organization to adapt to a range of possible future strategies. Having a workforce with broad-based business skills, the ability to adapt, and the ability to collaborate and communicate across diverse populations and geographies will be vital as the next generation of business evolves.