Did you know that the banking sector is thriving? According to recent estimates, over two million people are employed in various capacities for banks. However, the financial services industry is on the verge of the next wave of disruption. As the need for digitization spreads throughout the industry, every financial institution is investing in digital transformation projects to update legacy systems and improve operational effectiveness and customer experience.
The banking industry faces some unique human resource challenges, along with the increased challenges of managing a large number of people. Human resource departments deal with employees with a wide range of skills and levels of experience, because of the unique nature of the banking industry. Front-line employees are also responsible for interacting with the public and navigating the tricky territory of occasionally having to turn down a customer who has applied for a loan.
Let's take a look at five of the most pressing challenges confronting the banking sector’s HR and headhunting right now.
Challenge 1: The Skill Deficit
The skills gap in the finance industry is widening all the time. According to a PwC survey conducted, 70% of financial services CEOs viewed the availability of key skills as a threat to growth. This was, and continues to be, driven in large part by the increasing capabilities of digital technology and the emergence of new roles in finance, such as data scientist, artificial intelligence (AI), and software engineers. Unfortunately, there aren't enough developers or data scientists who are also proficient in finance, and vice versa.
Challenge 2: A scarcity of mid-career candidates
There's also a scarcity of people applying for jobs in the middle of their careers, and it's not just a lack of new millennial graduates. The 2008 financial crisis and the years of economic downturn that followed drove many people away from the financial services sector, resulting in a decrease in the number of mid- and senior-level professionals in the market. These candidates are now in high demand as the economy improves, boosting confidence and growth in the industry. Employers in financial services can attract talented professionals with experience in payroll, accounts receivable, and payable in other industries if they develop the right strategy.
Challenge 3: Keeping Millennial Talent
Talent recruitment for the banking sector is critical in an industry where only 10% of millennials expect to work for the long term, according to a PwC survey. The Society for Human Resource Management states that it costs an organisation an average of $4,129 to hire a replacement if it fails to retain an employee - and that doesn't include the cost of severance and training a new employee. To put this in context, this means that 90 percent of your younger employees may not stay with you for long, causing your cost-per-hire figures to skyrocket.
Challenge 4: Developing an Appealing Company Culture
According to LinkedIn's new Workplace Culture report, 86 percent of millennials would take a pay cut to work for a company whose values they believe align with their own. In comparison, only 9% of baby boomers would do the same thing. Of all age groups represented in the survey, 70% of professionals in the United States would not work for a leading company if it meant having to tolerate a negative workplace culture. It is critical for people to be able to bring their entire selves to work. As people's work and personal lives become more intertwined than ever, there is a greater expectation that the companies for which they work share the values.
Challenge 5: Job seekers now have more options and control
In this market, job seekers have a choice of top financial services and talent is becoming increasingly difficult to find. Although financial service jobs frequently offer a market remuneration level, according to the cultural report at the LinkedIn workplace, it may not be enough to attract and retain rare talents. Furthermore, the situation places talent in a position of power, and financial services organisations can expect lengthy salary and benefits negotiations as they compete for the best candidates.
So, how can the banking sector overcome the aforementioned challenges with manpower outsourcing?
Solution 1: Outsource manpower to save time
Outsourcing manpower services allows you to free up a significant amount of time for other important tasks. We handle all HR-related issues, such as payrolls and recruitment. An HR department may find it difficult to consider all of the administrative and logistical tasks associated with the internal maintenance of HR functions. As a result, the financial services companies will devote more resources to growing the business and profits, which is one of the advantages of human resource outsourcing.
Solution 2: Outsource manpower to attract talents
If you do not have a budget to support a large HR department, internal employees will be forced to juggle multiple responsibilities, reducing productivity. When you outsource manpower services, you ensure that each HR role is managed by highly qualified expert HR professionals. To keep the top employees, financial services companies must adopt a number of employee retention tactics. Professional development opportunities should be made available to help employees become more knowledgeable while also increasing an employee's investment in their financial services career. At Xetron, we screen candidates and select the best quality profiles based on industry requirements.
Solution 3: Outsource manpower to manage risks
Corporations must follow a plethora of federal and state laws. It can be difficult for smaller financial services companies to stay in compliance with these regulations, especially when current regulations are constantly evolving and new regulations are frequently enforced. Failure to keep up can lead to a lack of enforcement, which can have serious financial consequences. It is best to hire a manpower outsourcing agency to ensure that these laws are followed flawlessly.
Solution 4: Outsource manpower to monitor employees’ performance
While it may be necessary for your supervisors to oversee the success and progression of your employees, this is also a role that you may delegate to HR. If employees resign or engage in inappropriate behaviour, we will provide a replacement. As a result, even this role can be delegated to a manpower outsourcing agency to explain to managers how their employees are performing. This would alleviate your supervisors' administrative burden, allowing them to focus on more important matters.
Solution 5: Outsource manpower to save cost
The cost of managing human resources can be very high, especially if you include all of the traditional HR department's responsibilities. The more people you have, the more employees you will require. It is not possible for the HR department to carry out all functions. As a result, financial services companies should hire a manpower outsourcing firm to reduce the following costs: Payroll, Employment Acquisition, Salaries, and Training Expenses. Don’t worry, in comparison to others, we charge a lower administrative fee, which is reasonable.
Conclusion
What is outsourcing in human resource management? Indeed, the benefits of human resource outsourcing are attracting and retaining the best people – essential for successfully competing and innovating in this increasingly digital environment. Without manpower outsourcing, it would be more difficult due to the fact that financial organisations are competing for skilled people not only with traditional sector rivals, but also with technology firms and startups. Not only will financial institutions require an increasing amount of technology expertise on their payroll in the coming years, but they will also require leaders who can effectively manage change.
Whether you are a small business or a large corporation, Xetron's experienced team has the skills, capabilities, and flexibility of the most effective hiring process to deliver on your specific needs and an agreed-upon plan and structure. As a strategic manpower outsourcing company in Malaysia, we are adaptable and always willing to talk in order to meet the needs of both parties.
Request a quote on our website https://www.xetronsolutions.com/ and leave your contact information, and we will contact you.
"Invest in strategic human resources, and place a premium on attracting and retaining top talent. If the employees are well cared for, the clients will be well cared for."
Tana Thomson, chief people officer at Vista Capital Partners.
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