Using Data to Close Workforce Gaps in Financial Institutions

Using Data to Close Workforce Gaps in Financial Institutions
Workforce Resilience

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This insight is part 01 of 10 in this Collection.

December 12, 2023 12 mins

Using Data to Close Workforce Gaps in Financial Institutions

Using Data to Close Workforce Gaps in Financial Institutions

Financial institutions are falling short on providing organizational structure, building future skills and creating value within their organization. Addressing these is critical to future success.

Key Takeaways
  1. Employee recognition and wellbeing drive business success; financial institutions need to improve their organizational structure to drive this change.
  2. Rapid technological change in the financial industry has contributed to an increased demand for new skills in the workforce.
  3. Financial institutions are spending more time managing rising costs due to inflation and have an opportunity to optimize their workforce.

Every industry has its own human capital challenges unique to its specific circumstances. Analyzing data from three Aon research programs, we identified sector-specific resilience risks that are facing organizations today. 

Expanding global wealth and advancements in technology not only provides financial institutions (FIs) with opportunities to grow in new markets, but also creates risk and human capital challenges that require innovative solutions. The pressure is on across the industry from all angles, including volatility created by climate change, geopolitical and financial headwinds, regulatory pressures and cyber threats.

When it comes to managing the workforce through this change, our research shows that the three most pressing human capital challenges for FIs are providing organizational structure, building future skills and creating value within their organization. 

  • 3,000

    We analyzed holistic HR data from over 3,000 organizations around the world.

    Workforce Resilience Diagnostic Insights

  • 1,700

    1,700 organizations completed a workforce resilience risk assessment.

    2022 Aon Workforce Resilience Risk Benchmark

  • 1,300

    1,300 organizations told us their workforce wellbeing priorities.

    2022-23 Aon Global Wellbeing Survey

With the right data and advice, FIs will be well-positioned to make better decisions. Below are recommended actions to take to improve in each area.

Transform Organizational Structure Through Flexibility and Mobility

Improving organizational structure is essential for enhancing employee wellbeing. One crucial step in this process is conducting a thorough audit of the existing working model. This involves evaluating factors such as workload distribution, communication channels and managerial practices. By identifying areas of improvement, organizations can implement changes that promote a healthier work environment. While FIs are starting to offer increased work-life balance, compensation is still a high priority and expectation among employees.

Quote icon

From commercial banks to brokerage firms, FIs are assessing the experience they offer their people. To remain competitive, improved customer and employee experience is essential. After all, an EVP should focus on more than just financial wellbeing.

Michael Burke
Executive Chair of Talent, Aon

Boosting workforce mobility also contributes to employee wellbeing. This can be achieved by offering opportunities for skill development, cross-functional training and internal job rotations. Encouraging employees to explore different roles within the organization enhances their professional growth, prevents burnout and fosters a sense of fulfillment. 

Ultimately, by focusing on both auditing the working model and promoting employee mobility, organizations can create a structure that prioritizes employee wellbeing and sets the stage for long-term success.

Equip Employees with Future-Leading Skills

Future skills readiness is on the agenda for financial companies, with 42 percent saying it’s hard to fill roles requiring skills in high demand. This is especially true since many organizations still struggle to hire and retain employees in the ongoing competitive market for skilled talent. 

Preparing the workforce for future skills includes initiatives like employee training and development, upskilling and reskilling programs, and preparing managers to lead their teams. This is necessary to drive the innovation and growth that characterizes the financial industry. Artificial intelligence, in particular, is driving FIs to understand the talent potential and gaps in their workforce.

There are two main actions FIs should take to improve their future skills readiness:

  • Boost employee mobility by establishing a sustainable skills framework — and then connect that framework to job architecture and current HR processes.
  • Increase productivity by using data to understand cost implications and the benefits of different talent decisions (e.g., invest in reskilling versus new hiring).

Companies must maintain the right level of depth to support activities like resource planning, while also ensuring they are not diving too far into the weeds. No matter where you are on your future skills journey, it’s important to remember that it’s a relay, not a sprint. The process for improving skills is collaborative and iterative.

Case Study: Building Future Skills at a Fintech Firm

Aon partnered with a global bank to benchmark its current skills based on our Future Skills Framework and found the bank was significantly behind fintech and technology firms. However, the client was broadly in line with other global, regional and local banks for its future skills set. The firm wanted to maintain a competitive edge and recruit the talent it needed to fuel innovation. We calculated mobility scores for current job roles and looked at the specificity of skills, as well as transferable behavioral skills. Based on the analysis, we worked with the client to implement the following recommendations:

  • Align the workforce structure to reflect investment in a digital banking model.
  • Address the future skills gap through development and career support to help redeploy talent in the future.
  • Explore the reward strategy for technology roles that are in line with the market to reduce any future skills pay gap.

Create Value Through Workforce Optimization

FIs are facing significant challenges related to rising costs and inflation. According to our research, 43 percent of companies in the industry are spending more time on higher cost and inflation management, as they seek to maintain profitability and remain competitive. This includes cost-cutting measures, supply chain optimization and pricing adjustments. While these measures can help mitigate the impact of rising costs and inflation, they can also have a negative impact on employees and customers. 

Understanding cost implications associated with future skills planning can help a company’s bottom line. How much time and money can be saved by focusing on skills that may already exist versus hiring external talent? Not only does reskilling and upskilling save money, but it also helps address skills gaps in a competitive talent market. Even further, companies that openly make reskilling and upskilling part of their employee value proposition and total rewards strategy will build trust and understanding, leading to increased engagement and loyalty. 

Ready to get started? Download our Measuring Workforce Resilience for Better Business Outcomes Guide or get in touch with one of our financial industry experts to discuss how to help your organization improve workforce resilience.

43%

Forty-three percent of FIs are spending more time on higher cost and inflation management.

Source: Aon's workforce resilience data

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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