{"id":3364,"date":"2017-05-17T10:12:11","date_gmt":"2017-05-17T14:12:11","guid":{"rendered":"https:\/\/www.sogolytics.com\/blog\/?p=3364"},"modified":"2020-06-05T09:32:36","modified_gmt":"2020-06-05T13:32:36","slug":"young-professionals-seeking-meaningful-careers-add-to-banking-talent-gap","status":"publish","type":"post","link":"https:\/\/www.sogolytics.com\/blog\/young-professionals-seeking-meaningful-careers-add-to-banking-talent-gap\/","title":{"rendered":"Young Professionals Seeking Meaningful Careers Add to Banking Talent Gap"},"content":{"rendered":"

An insightful article in <\/span>Efinancialcareers<\/span><\/a> highlighted an interview with a Millennial woman who had this comment about the financial services industry: <\/span><\/p>\n

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\u201c<\/span>Finance is a bunch of old white guys doing sneaky things in a conference room.<\/span><\/i>\u00a0<\/span>I graduated from high school in 2008 when the market crash was happening, and I recently saw\u00a0The Big Short, which explained the process of what went into the crash. That makes me reluctant to deal with large financial institutions other than what is absolutely necessary. I recently bought a car, but I\u00a0didn\u2019t want to deal with lease terms or loans, so I decided to pay for it outright. I\u2019d rather eat peanut butter and jelly than deal with the financial stuff<\/span><\/i>.\u201d <\/span><\/p>\n

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Financial Crisis Fallout<\/b><\/p>\n

The financial crisis cast a cloud over the sector, persuading young talent to pursue options in other industries. <\/span>A recent <\/span>Forbes<\/span><\/a> article corroborates the millennial woman\u2019s attitude:<\/span><\/p>\n

“When you are trying to get the younger talent, you’ve got to be able to sell them on your culture and of course be competitive on compensation. But that’s not where it ends. You really need to be able to mentor them and help them develop.”\u00a0<\/em> Diana Chase, Managing Partner,\u00a0ChaseCompGroup LLC<\/span><\/p>\n

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\u201c<\/span>The financial collapse has unquestionably tarnished the reputation of the industry. Millennials have especially questioned the industry because they became adults during the time\u00a0of the financial crisis, bank failures, and the foreclosure boom. As a result,\u00a0<\/span><\/i>21% of millennials<\/span><\/i><\/a>\u00a0have decided to avoid the financial services sector<\/span><\/i>.\u201d<\/span><\/p>\n

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The fallout from the financial crisis led to tighter regulations, rules that demand greater transparency, and higher tax burdens on financial institutions. The Dodd-Frank Act is considered the most powerful regulatory enactment since the aftermath of the Great Depression. <\/span><\/p>\n

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The myriad of regulations is causing more compliance and risk-management experts to emerge, while \u201crevenue-generators\u201d have exited the industry given the restrictive regulatory environment that surrounds deal-making. As a result, many banking professionals, happy to accept significant salary cuts in return for a share of the new equity pie, are handing in their resignations and making the leap into the FinTech sector. <\/span><\/p>\n

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The Demise of Career Development Programs<\/b><\/p>\n

Bank executives say recruiting commercial lenders is among the most significant challenges they face in 2017. <\/span>Bank Director<\/span><\/i>\u00a0cites the actions by many large banks to curtail career development programs (along with the retirement of aging baby boomers) as key contributors to the industry\u2019s talent shortage. <\/span><\/p>\n

“While real wages for financial services professionals in New York rose by 14%, the number of young people working in the financial sector has declined by 11,000.”\u00a0<\/em> New York City Comptroller<\/span><\/p>\n

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Apprehensive banks have cut training programs that developed strong sales talents into commercial lenders, contributing to a lack of young commercial lenders. The\u00a0<\/span>2016\u00a0<\/span>Bank Director<\/span><\/i>\u00a0Compensation Survey<\/span><\/a>\u00a0revealed that Millennial professionals identify the \u201copportunity to learn new things\u201d as a key motivator for working in the banking industry.\u00a0Commercial banks that slashed training programs in response to economic pressures must restore these career development opportunities by establishing mentorships and leadership programs, and reinforce the company\u2019s commitment to individual growth if they want\u00a0to attract younger talent. <\/span><\/p>\n

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Industry Consolidation Triggered by Aging Baby Boomers <\/b><\/p>\n

In the U.S., one of the biggest concerns is the rapid pace at which lenders are being sold\u2014the fastest in 20 years. This pace is expected to continue increasing, with the rate of bank consolidation expected to rise above 5% during this year\u2019s first quarter for the first time since 1995. <\/span><\/p>\n

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Among the main reasons cited for this frenzied merger activity is the aging of baby boomer bankers, many of whom are now CEOs\u2014approximately 25% of publicly traded banks have a leader at the helm who is between 59 and 62 years of age. This generation of bankers was predominantly trained by way of traditional training programs, which are now outdated. There is an extreme shortage of talent qualified to take over the top jobs, and this is contributing to the decision to sell lenders. The shrinking talent pool in banking appears to be a problem not only for the entry-level and middle management positions but also for the top executives.\u00a0\u00a0<\/span><\/p>\n

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Fewer Qualified Candidates <\/b><\/p>\n

As the banking industry continues to experience more competition, particularly from the booming FinTech sector, professionals at all levels are questioning the traditional bank employment model\u2014long hours, working lunches, and sizeable amounts of internal red tape. In the face of increasing regulation and decreasing profits, is the effort worth the return? <\/span><\/p>\n

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Upstarts may allow employees to work flexible hours, wear jeans to the office, and play beer pong on company time, but the differences in corporate culture go beyond such superficialities. Greater learning opportunities, less bureaucracy, and the chance to work on issues they feel genuinely passionate about are some of the reasons cited by those who have ditched jobs in traditional financial institutions for tech-savvy startups. <\/span><\/p>\n

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Traditional Skill Sets Are No Longer Enough<\/b><\/p>\n

Technology is changing how finance is conducted\u2014from payments to investments to regulatory practices\u2014innovative start-ups with revolutionary concepts (e.g. blockchain) are set to make many traditional banking functions redundant.<\/span><\/p>\n

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That\u2019s not to say the industry won\u2019t continue to attract talent. However, the talent will likely possess a different skill set than ten years ago. The longevity of the industry inherently implies that banks are resilient to an array of external pressures. A career in banking may not have the same cutting-edge appeal as one in FinTech, and it remains far from being a \u201clifetime job.\u201d However, the longevity and relative job security that financial services offer in today\u2019s more regulated, competitive marketplace means that the attractiveness of a banking career will not fade anytime soon.<\/span><\/p>\n

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Banks face fierce competition when it comes to attracting and retaining the talent with the technical skills they need in an increasingly digital world. <\/span>By 2025, millennials will make up 72% of the workforce, and they will not want outdated concepts. This new generation of workers is tech-savvy and diverse in thoughts, both of which can be encouraged and leveraged to nurture a collaborative talent pool.<\/span><\/p>\n

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Sophisticated tools, like Sogolytics can\u00a0attract millennials back to the financial industry while enabling banks to collect data and better understand their customers. Learn more<\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

An insightful article in Efinancialcareers highlighted an interview with a Millennial woman who had this comment about the financial services industry:<\/p>\n","protected":false},"author":1,"featured_media":5040,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[156,175],"tags":[274,39,60,315],"yoast_head":"\nYoung Professionals Seeking Meaningful Careers Add to Banking Talent Gap - Sogolytics Blog<\/title>\n<meta name=\"description\" content=\"An insightful article in Efinancialcareers highlighted an interview with a Millennial woman who had this comment about the financial services industry:\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.sogolytics.com\/blog\/young-professionals-seeking-meaningful-careers-add-to-banking-talent-gap\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Young Professionals Seeking Meaningful Careers Add to Banking Talent Gap - 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