Three predictions for the financial services workforce in a post-COVID-19 era

Patrick Luther, Industry Principal, Financial Services at Ceridian, makes three predictions for how the COVID-19 pandemic will affect the financial services workforce, along with solutions to help organisations build a more adaptable workforce.

Prior to the pandemic, the financial services sector was still largely holding onto the traditional work model, with employees coming to physical locations for a 9-5 workday. Then everything changed overnight, and financial services organisations did what they’ve always done when outside forces disrupted the status quo – they adapted. Now the question on everyone’s mind is whether things will go back to the old way, or if these changes are here to stay.

While the pandemic has created many challenges for financial services companies, it’s also a great opportunity for leaders to rethink how things have always been done. The pace of change is accelerating, so companies will need to become much more agile than in the past to thrive in the post-COVID-19 era.

Here are three predictions on how the pandemic will affect the financial services workforce, and how organisations can address them through investing in technology.

 

 

1. A shape-shifting skills gap

The financial services sector was already struggling with a shortage of skilled labour prior to the pandemic. According to a 2019 Ceridian research study, 93% of financial services executives surveyed said their organisations were experiencing some degree of skills gap [1]. This was partly due to increased adoption of advanced technologies, such as robotic process automation (RPA), to build efficiencies and keep up with fintech, causing a decoupling of roles and tasks. But it was also in part due to the rate at which technology is changing the world and the skills needed to thrive in it [2].

While significant job losses as a result of the pandemic may seem like a solution to the shortage of skilled labour, the reality is more complicated. First, the available candidates may not match the specialised skills financial services organisations are looking for. And second, the pace of change is accelerating with the pandemic, driven by changing behaviours and expectations from customers, and other external factors. That means understanding which skills are needed and how to acquire them is now a moving target.

 

 

A big driving force of change for financial services organisations – both before and during the pandemic – is their clients. This sector is in a unique position to support the public during this crisis. There is an expectation that organisations will be part of the solution, offering flexibility and support to customers. But the rules have changed for what makes a great client experience, and keeping up with this moving goalpost will require constant pivoting by the workforce. The skills needed today are once again evolving, and will continue to do so.

The pandemic has also shifted the need for digitisation into overdrive. While there was already a push to increase web and mobile capabilities prior to the crisis alongside changing consumer behaviours, the overnight switch to remote working has driven home the importance of having a digital-first workforce. Companies that were ahead of the curve before the pandemic hit are now seeing the fruits of that investment, while laggards are paying the price for waiting. This fundamental switch to digital will in and of itself require a significant skills pivot for the workforce.

Financial services organisations will need to become much more agile to thrive in the post-COVID-19 era. While reskilling will continue to be high priority, it can’t be a “one and done” approach. Technology can play a key role in helping organisations tackle skill-building initiatives in an agile way. Learning platforms can be personalised by role to increase its value to employees, leading to a higher adoption rate and a better return on investment. Learning can also be embedded into work to make it hyper-relevant to employees, and platforms allow for social learning and collaboration across organisations.

2. A decentralised workforce

The pandemic has challenged the financial services sector’s longstanding belief that trading, serving clients, and closing deals need to happen in a traditional office setting. Instead, organisations have found that productive remote working is possible. Bank of Montreal (BMO) estimates that as much as 80% of its global workforce will permanently adopt blended working arrangements after the pandemic ends [3]. The bank was able to sustain business continuity across the organisation, and its investment bankers had success with virtual pitching. Similarly, one international bank saw virtual selling as a competitive advantage and began upskilling its sales reps to maximise the format [4].

The pandemic poses an opportunity to take stock of lessons learned, for financial services firms with retail operations and extensive real estate in particular. Understanding if and how reduced staffing and branch hours affect revenue can help organisations determine if it makes sense to consolidate certain products or services into regional, specialised offices – or online. While these changes can potentially lighten the real estate footprint and headcount, they will also affect how people work. Organisations should not only embrace changes that support operational efficiency and cost savings, but also consider developing training and change management strategies to help transition the workforce.

Adopting flexible or hybrid working models has many benefits for organisations. For one, it can free up cash to invest in other parts of the business – McKinsey estimates that the costs associated with renting, management, and maintenance of office space can amount to 10-20% of total people costs [5]. That being said, for companies that have always operated with close physical proximity, maintaining culture, compliance, and operational efficiency can be challenging in a decentralised workforce. While business continuity may be strong during the pandemic, organisations need to think ahead to the post-COVID-19 era and consider how new ways of working will impact reaching their long-term goals.

 

 

Technology can support a decentralised workforce in many ways beyond simply connecting people online or through video conferencing. The right system can help digitise some of the normal activities of the office to facilitate collaboration, mentoring, and social learning. This has the added benefit of capturing knowledge in a digital format for employees across the organisation to access, and can also help organisations retain critical information as baby boomers retire in large numbers. Managing learning, development, and performance digitally can also help to align employees’ work to business goals and longer-term plans. This is important for preserving the company’s culture and core values when teams are at home – or spread across the globe.

For financial services companies with retail locations, self-serve tools can also simplify scheduling. With constant change around consumer demand and behaviour expected for the foreseeable future, this can help alleviate the administrative burden on managers, while allowing employees more flexibility. For client-facing and back-office employees alike, offering a “consumerised” experience through technology (e.g. requesting annual leave or viewing payslips through a mobile app) is an attractive convenience in today’s world, especially for millennial and Gen Z talent.

3. A wellness pandemic

The effects of the pandemic on people’s mental health will be significant, and lasting. While the financial services sector may not have been as hard hit as other industries when it comes to job losses, many of its employees are working closely with members of the public who are in very challenging financial situations. That will undoubtedly cause stress and strain on the sector’s workforce, and many may also be facing their own financial challenges due to market instability and increased living costs.

Financial services organisations will need to expand their employee wellness programs to include physical, mental, and financial wellness supports. On the physical health side, organisations can leverage our safety monitoring tool to track where employees are working, their health status, and their contact information, and send real-time notifications based on location. This can help companies protect the health of their employees, and communicate more effectively during times of uncertainty.

 

 

Companies should also consider how they can support employees’ mental health. Learning platforms can be used to train people on stress management or to make them aware of the different types of programs available to support them and their families. Wellness programs, such as yoga and meditation, can also be delivered through a learning platform so employees can access them for free. Employee surveys and sentiment analysis tools can also help organisations understand employees’ stress and engagement levels, and measure the impact of any changes or new programs.

One often overlooked area of employee wellness is the financial side. Employees’ financial stress can have a negative impact on your organisation, from higher living costs to an increase in sick leave and turnover. Financial services companies can help support employee financial wellness through education, expanding and personalising benefits, and even allowing employees more flexible access to their earned wages.

Looking toward the future

The COVID-19 pandemic has accelerated the process of learning to operate in a world that’s constantly in flux. For financial services organisations, that means building a more agile, adaptable workforce. Organisations should take the opportunity now to rethink traditional working models and reinvent their approach to the workplace and the workforce. Doing that successfully will not only help companies thrive during the acute crisis, but will also set them up to tackles some of the challenges that were already there – the skills gap, difficulty attracting millennial and Gen Z talent, and operational efficiency.

This post was written by Patrick Luther. It first appeared on Ceridians’s website here. Ceridian are an exhibitor on the HRTech247 Payroll and HCM floors. You can visit their HRTech247 exhibition stand here.