Many financial institutions underplay the importance of their people strategy. And yet workforce issues were central to many of the negative headlines in 2017. For an industry that sells trust, this isn’t something that can be swept under the rug. In 2018, financial institutions will likely face more challenges as they wrestle with diversity, trust and how to integrate artificial intelligence and digital labor alongside their existing workers.
Culture under the microscope. Is it fair to hold firms responsible for ethical behavior? This was certainly a theme during 2017 in the financial services industry, with a spotlight on sales practices, gender issues, transparency and more. As firms look closely at corporate culture, they’re examining compensation and ethics programs in an attempt to restore consumer trust. There’s a lot of work left to do.
The bots are coming! Employees began seeing bots take over some daily tasks—and it made many of them nervous. In 2017, we surveyed roughly 10,000 people for views on the workforce of the future; 37% said they’re worried about automation putting jobs at risk. Few executives were thinking about the effect of automation on their human workers.
All talk? Many financial institutions made commitments in 2017 to step up workforce diversity, but it’s unclear if they delivered on their promises. While diversity and inclusion is a stated value or priority area for 88% of organizations, 44% of respondents in our survey still feel diversity is a barrier to employee progression. With a few exceptions, little has been accomplished by financial firms in substantive areas such as pay equity, C-suite structure and board composition.
Diversity on the agenda. Given the politicized environment (and that 2018 is an election year), look for more conversations about diversity. Demographic trends continue to point toward a more diverse workforce, but diversity alone does not mean equality. We expect a few industry executives to truly embrace efforts to drive diversity, doubling down to close gaps in senior leadership positions, recruiting, pay and other areas.
Why should we believe you? There’s broad skepticism in today’s society about large institutions. For the financial services industry, already struggling with a wary public, this is a big challenge. Meanwhile, millennials want more than a paycheck; they want to work for and buy from companies they trust. With the rise of new competitors, firms will likely start to revisit what they offer clients and employees.
Culture clash. Financial institutions have invested a lot in human resource management systems (HRMS), but adoption has been woefully low. Deploying technology isn’t enough to change behavior. Firms will need to change culture if they want their HRMS investments to pay off. In 2018, we expect to see changes in incentives to drive real adoption and use of these tools.
Glass houses. You want to be, and be known as, a firm that truly values diversity. Think about more than gender, age, race and other protected classes—add variations in perspectives, experience and more. Measure your efforts along the way and be transparent with what you’ve found and where you’re going. Reflect your values in everything you do from recruiting to board composition.
Good corporate citizen. Many firms locate back office operations in relatively small communities which have few other employers. Keep in mind that your institution has a profound effect on these communities when hiring, training, transitioning workers to new tasks or roles, or laying off workers. You will face hard decisions when local areas depend heavily on your business presence. Choose wisely.
What workers want. Younger generations are less interested in a job just to pay the bills. They generally want opportunities such as global mobility, flexible small teams and the ability to be creative. They also value candid coaching discussions about career paths. Train people who supervise these employees so you create the right work atmosphere for everyone to thrive.
“As financial institutions’ business models evolve, they’re really going to have to think differently, and that means hiring and developing people with vastly different skills and views.”
The dialogue around diversity and inclusion have gained traction in 2017, but PwC's Bhushan Sethi and Stefanie Coleman say financial institutions still have a way to go.
To build innovation as a part of their culture, financial services firms need to look beyond their normal business models, say PwC's Dean Nicolacakis and Marie Carr.
Our teams in asset and wealth management, banking and capital markets and insurance are helping our clients tackle the biggest issues facing the financial services industry. With professionals across tax, assurance and advisory practices, we can help you find ways to thrive even in a period of uncertainty. Whether you're preparing for regulatory changes, putting FinTech/InsurTech to work, or rethinking your human capital strategy, we work together with you to resolve complex issues, identify opportunities and deliver value to your business.
Director, Financial Services People and Organization Practice, PwC US
Tel: +1 (646) 313 3924