Mounting regulatory scrutiny and an ongoing talent shortage are making it difficult for many financial institutions to maintain an ample pool of talent for their control functions, which include internal audit, compliance, risk, and finance. They need more employees in their control functions to handle the growing workload. They need employees with more expertise, too. Meanwhile, these efforts are being hampered by higher talent turnover and rising compensation costs.
Regulators like the Office of the Comptroller of the Currency (OCC) have issued guidelines directing banks to pay more attention across the talent lifecycle. Their guidelines instruct banks to establish processes for talent development, recruitment, and succession planning. The goal is to help ensure that management and employees who are responsible for risk have the knowledge, skills, and abilities to identify, measure, monitor, and control relevant risks. In addition, banks should create compensation and performance management programs that attract and retain talent needed to design, implement, and maintain an effective framework.
Financial institutions can take four distinct steps to capitalize on opportunities to manage talent across the organization:
All-too-often, organizations focus on a single element in their employee experience, at the expense of the bigger picture. While it’s fine to gain traction on a smaller scale, companies should pursue broader objectives to achieve long-term talent wins such as improved skill-building, lower-cost deployment, and enhanced demand and data management. In our experience, this means looking at opportunities for improvement across the talent lifecycle to support business goals.
Implementing changes will not be easy. Leaders should be prepared to navigate internal politics and support managers in learning to work with employees and contractors of varying skillsets, backgrounds, and locations. These shifts will require lasting changes to each step in the employee experience rather than one-off interventions.
It will be a long journey for leaders that choose to mature their organizations, but those that do can expect to realize competitive advantage through cost savings, a sound risk culture, an improved employee experience, and a reliable pipeline of control functions talent.