Win the banking skills race

Rapidly evolving skill requirements mean that dynamic approaches to talent management are key if banks’ employees are to keep up with organisational requirements of them, particularly in innovative and transformative capabilities.

The good news is that approaches such as remote and asynchronous working are helping banks to expand their potential talent pool. More recently, the application of generative AI has also given firms an opportunity to boost employee productivity and adaptability.

Even so, the banking industry is confronted by an acute skills shortage, sharpened by growing competition for talent from Fintechs, Big Tech, and other sectors. Banks also face internal barriers, including limited investment in strategic talent planning and traditional approaches to talent acquisition that can overlook a range of suitable candidates.

So, how can banks ensure they have the talent needed to deliver on their strategic ambitions? The answer lies in positioning skills and talent planning as a strategic board-level priority and disrupting traditional ways of thinking, both in HR and in the wider organisation.

Treat talent as a strategic imperative

Banks that integrate workforce planning with the cadence of normal business planning, aligning talent dynamics with strategy and making it a whole organisation priority, will be more successful.

For decades we have talked about strategic talent and workforce planning, but for most organisations, it’s failed to deliver its promised value. Workforce planning is seen as an administrative activity owned and delivered by HR, and as a result, doesn’t secure the time or prominence needed on the boardroom agenda to discuss critical skills shortages and future requirements.

Integrating workforce planning with strategy will elevate critical people discussions to the executive board, and ensure organisations have the skills they need in the future. Investing in technology, analysis and AI to make workforce planning more dynamic and predictive will also ensure HR teams are able to bring more insightful, insight-driven discussions to the executive. More specifically, banks can:

• Use predictive analytics to get ahead of future talent needs, empowering the organisation to refine its forecasting and decision-making around talent development and acquisition.
• Ensure skills and talent discussions feature on the agenda at Quarterly Business Planning conversations, using the existing agile planning cadence to discuss people and skill requirements.
• Align cross-functional approaches and outcomes for talent planning to create a joint exercise that delivers faster, more tangible value. This should seek to fulfil the collective needs of the business, finance, and HR.

Be selective about skills

Banks need to shift from a role-based mindset to a skills-oriented approach. While roles will continue to evolve based on changing internal and external influences, focusing on skills will ensure your talent planning is future-proofed.

However, defining an enterprise-wide skills taxonomy takes time, with months spent articulating skills taxonomies and mapping current maturity levels across the organisation. This minimises buy-in from the business and constrains the value that could have been delivered. By focusing on a smaller number of critical skills that limit current performance – or will do so in the future – banks can quickly resolve gaps and deliver demonstrable value.

Banks should:

• Pinpoint critical skill areas for proactive enhancement and be clear on the expectations. These could include digital literacy, data analytics for insight-driven decision making, cybersecurity for safeguarding digital trust, and customer centricity for delivering tailored financial solutions.
• Cultivate the critical skill areas using a culture of continuous upskilling to enhance organisational performance. Employees who are encouraged to regularly update their skills leads to improved productivity, higher job satisfaction and retention, better regulatory compliance, and more innovative and competitive services.

Identify skills adjacencies that may be opportunities to fill critical skills gaps. With banks competing for the same in-demand skillsets, they can focus internally and identify roles or job families with adjacent skills, which could be targets for reskilling programmes in the future.

Disrupt the talent pipeline

Banks are increasingly recognising that traditional talent acquisition strategies are unlikely to deliver the right skills for the future. With banks, FinTech and Big Tech all competing for the same in-demand skillsets, seeking expertise using conventional routes is likely to be unsuccessful.

Instead, banks need to encourage HR and the wider business to disrupt existing practices and mindsets by identifying new sources of skills and improving their ability to develop home-grown talent.

More specifically, banks can:

• Prioritise skills-based hiring – focusing less on academic achievements and experience, and more on transferable skills and capacity for learning. Moving beyond traditional sources of talent will widen the talent pool and build a more diverse and innovative workforce to meet demand.
• Implement structured diversity and inclusion programmes that actively recruit and develop talent from varied backgrounds by partnering with experienced SMEs in the wider financial services ecosystem.
• Build well-planned, innovative internal talent and skills development approaches that prepare people for the future. Banks need to use future planning to build long-term skills development initiatives, which enable colleagues to engage and upskill in new capabilities over time without necessarily moving roles. Enabling flexible roles based on skills and being clear on the development needed to move people from one place to another can enable a more agile organisation.

By giving these initiatives the attention they deserve at the board level, banks can position themselves as leaders in the skills race, ensuring they have the talent needed to achieve their strategic ambitions and thrive in an increasingly competitive space. Embracing change, fostering innovation, and prioritising talent development will be key to winning the skills race in banking.