Changing strategies have started to put pressure on staffing needs as financial institutions face down a possible recession and make pushes for new revenue sources.
Staffing remains a key priority for community banks and credit unions heading into 2023, and the industry’s ongoing digital transformation and economic uncertainties have started to change how financial institutions look at staffing needs, according to industry experts.
A recent study by accounting and consulting firm Wipfli showed that all community banks and credit unions surveyed considered talent management either extremely or somewhat important. For banks, where talent management was the top priority, 71 percent described it as extremely important. Among credit unions, where talent management was the No. 2 priority, 68 percent considered it extremely important.
Another survey by bank consulting firm Cornerstone Advisors found that 50 percent of banks and credit unions entered 2023 with concerns about both staff retention and recruiting, and another 31 percent had concerns about recruiting.
While the pandemic has seen employers across industries facing staffing challenges, the discussion around talent management at financial institutions has changed, said Anna Kooi, Wipfli’s national financial services leader.
Along with the effects that competitive wages have had on banks’ bottom lines, Kooi said, changing strategies have started to put pressure on staffing needs as financial institutions continue with their digital transformations, face squeezing net interest margins amid a possible recession and make a push for new revenue sources.
Banks are looking not only to add staff to address changing priorities in 2023, Kooi said, but also to identify whether they already have employees who could support new initiatives.
“Many are looking internally to see, ‘Are there folks within the financial institution who might have a passion around those new priorities?’” Kooi said.
Terence Roche, a partner at Cornerstone Advisors, said in a recent report, “What’s Going on in Banking,” that talent development will become key for banks.
“2023 will be the year financial institutions realize that hiring talent in just a few key areas like analytics, digital marketing, payments, and fraud won’t be enough,” Roche said. “Developing talent in these areas must become a core competency. ‘Talent development’ will become a key operating mantra.”
How to Make It Happen
To help develop talent, some financial institutions have added a “people plan” to the three- or five-year strategic plans that banks use to set their priorities, Kooi said. People plans give banks a framework for looking at ways to find existing staff members who would make a good fit for their strategic priorities, Kooi said. She added that people plans often involve a call to action, asking employees whether they have interest in certain initiatives.
“You’d be surprised how many raise their hand and the things that they learn about their talent that they didn’t know before,” Kooi said.
With some banks and credit unions also facing an aging staff, developing leaders among younger staff has also become a priority, Kooi added.
With customers continuing to adopt mobile and online banking, banks and credit union have also looked at ways to use technology, including within branches and back offices, so that they can use staff in different ways, said Jim Perry, a community bank and credit union consultant with Market Insights.
Banks and credit unions also have to look at their cultures to ensure they can support employees changing priorities.
“They’re trying to attract individuals who now are expecting a more flexible and more hybrid work experience,” Perry said. “People have to be willing to try new things, because that’s the wave of the future.”
