Developing new skills is the key to boosting productivity and financial services gaining a competitive advantage

22 March 2021 – Financial institutions are spending significant amounts of time and effort to boost the productivity of their workforce, according to The Productivity Agenda 2021 survey commissioned by PwC.

This is the second iteration of PwC’s productivity research and it was conducted during June 2020. The results reflect the dynamics of living through the COVID-19 pandemic and the priority that financial services businesses are placing on improving the productivity of their people in order to future-proof their business models. Seventy-two percent of those surveyed are planning to implement additional specific productivity measures, compared to 53% in 2018, with 14% pausing efforts temporarily due to COVID-19.

Digitisation is a key tool for Financial Institutions to help productivity. Most organisations have already digitised to some degree and are seeing productivity gains as a result, but there’s much more that can be done. Firms need new capabilities as technology solutions increasingly involve collaboration with third parties. It's not just technical skills that workers need but also training in new “soft” skills, such as agile methods and advanced collaboration techniques.

Marina R. Tusin, PwC Indonesia Consulting Leader, said that, “The impacts of COVID-19 have put up the pressure on costs and productivity for many organisations. This new normal is accelerating the need for digital transformation and creating skills challenges. Automation, Artificial Intelligence (AI) and other emerging technologies can deliver productivity. But technology is only as good as the leaders who identify its opportunities, the technologists who deliver it and the people who work with it every day. That’s where companies must be able to identify future roles: the right mix of skilled and adaptable people, aligned to the right culture and with the right mindset and behaviours can help power their business.”

Fifty percent of survey respondents are leveraging crowd-sourced solutions – including introducing more gig economy employees to access specialist skill-sets – 27% firms are spending more than 20% of their operating costs on change programmes. Three quarters (77%) of organisations are also tracking productivity of workers.

The use of crowd-sourced platforms and gig employees was cited to provide high value by 80% of the institutions with this activity in place. This has increased significantly since the 2018 survey, where just 39% believed it added value. PwC suggests that the use of gig economy workers will increase significantly in the next 3-5 years. Gig workers currently make up just 5% of employees, compared with 70% full-time employees, 32% part-time and 9% of contractors.
Of the organisations with change programmes in place, 60% are investing in specialised training for their people and 51% have appointed career mentors, to grow and retain talent. In addition, almost 80% of the firms surveyed are using further tools to support their people’s productivity via AI tools (54%), Deep Learning (40%) and Robotic Process Automation (37%), resulting in over 90% of firms reporting success. Digital tools have successfully empowered the in-house workforce at financial institutions, with 90% of respondents stating that using these tools has improved productivity.

The prospects for greater use of the gig economy are particularly significant, with half the organisations surveyed stating that they expect to increase their proportion of gig-based employees in the next 3-5 years, instead of taking on full-time employees. Despite increasingly available on-demand talent, most institutions still rely primarily on full-time and part-time employees. 1Among respondents, contractors comprise just 9% of the workforce, and gig-economy talent makes up just 5%.

PwC believes that gig economy employees will likely perform 15% to 20% of the work of a typical institution within five years, driven by continuous cost pressure and the need to access digitally skilled talent. This, combined with the investment into the soft skills and digital expertise of more permanent employees, is key to unlocking productivity gains in the future.

John Garvey, PwC’s Global Financial Services Leader, PwC US, comments, "The challenges around keeping people motivated and productive are more pertinent this year than ever before, with nearly three quarters of financial institutions planning to implement additional productivity measures as a result of COVID-19. We firmly believe that upskilling, through training and mentoring, is key to increasing productivity, as is outsourcing to the gig-economy."

In addition, according to Marina, "Upskilling and reskilling are long term investment for companies and indispensable responses to ongoing technological advancements. Organisations must continue to recognise human capital investment as an asset and take an active role in supporting their workforce through their upskilling and reskilling journey. In the short term, reskilling will be necessary to allow people to operate in the new roles that are created by the COVID-19 crisis. In the long term, upskilling will raise employees’ productivity as digital transformations progress and more people find themselves working alongside machines.”