3 key factors for finance firms to retain talent

By Derek Irvine, SVP strategy and consulting, Workhuman

Two years on from the start of the pandemic, retaining talent is the number one workforce priority for the financial services sector, per PwC and the Confederation of British Industry research. After talent retention, maintaining and achieving high levels of employee engagement is second in line as a focus for 2022.

This emphasis on retention and employee engagement should come as no surprise, when nearly four out of ten workers are planning to look for a new job in the next 12 months, per recent research from Workhuman. The scope of this projected voluntary employee turnover has the potential to cost businesses billions. With the cost to replace an employee estimated to be up to two times their salary, that means a 100-person organisation with an average salary of £50,000 could see the Great Resignation cost up to £4,000,000 this year.

What can financial services firms do to stem the tide of employee turnover and boost engagement, especially when 70% of banking and finance workers are hybrid?

Build a culture of connection

As more employees are working physically separate from each other than ever before, there will undoubtedly be an impact on culture and connection. The results of Workhuman’s recent survey, Two Years into COVID: The State of Human Connection at Work, bear this out.

Whether work is remote, hybrid or on site, people feel more connected to their colleagues than company culture, per these survey results. As well, both hybrid and on-site workers feel more of a sense of connection to colleagues – likely due to at least some face-to-face interaction – than fully remote workers.

Understanding this, consider ways for employees to connect, like mentor-mentee programmes where remote employees are matched with those working in the office to broaden and strengthen connections, or employee resource groups (ERGs) where people can build relationships over shared interests or experiences.

And don’t forget that technology isn’t just a means of getting work done virtually. It can also help a dispersed workforce build social connection organically. People are more accustomed to gathering in the office to celebrate a birthday, new baby or work anniversary, but it’s still possible to commemorate these moments even when some workers are off-site. There are platforms that enable employees to celebrate each other’s shared interests, events and milestones – both in and out of the workplace – and are accessible on desktop and mobile, whenever, wherever and however people are working.

Social connection matters, with remote workers employed at companies that commemorate these moments feeling more respected (78% vs. 58%) and appreciated (75% vs. 44%) overall than remote workers at companies that do not.

Ensure employees feel valued

According to research by MIT Sloan School of Management, companies that don’t recognise strong performers have higher rates of employee turnover. Recognition makes employees feel valued and appreciated, and studies show that this translates into higher employee retention.

In fact, the recent Workhuman research shows that people who were thanked in the last month are nearly half as likely to be looking for a new job, more than twice as likely to be highly engaged and more than three times as likely to see a path to grow in the organisation.

Start by being more intentional as an organisation about appreciation, and think about ways to operationalise gratitude, such as a formal recognition and reward programme. When it comes to employee satisfaction and motivation, it isn’t all about the salary or even the annual bonus. Research by Cornell’s SC Johnson College of Business shows that frequent and immediate rewards can enhance interest and enjoyment of work.

Some recognition and reward tools even enable for peer-to-peer recognition, which can further strengthen connections between people and among teams, as well as widening the types of contributions – and contributors – that are recognised. Not surprisingly, workers who feel they are valued and recognised for the work they do are far more likely to stay loyal to their company.

Embrace boomerang employees

Although job seeking is down two percentage points from Workhuman’s June 2021 survey, it still remains nearly twice as high as December 2019, where only 21% were job seekers and a whopping 92% expected to be in their role for at least a year.

Given that nearly one in three UK firms are suffering shortages in financial, professional and business services skills, according to the Professional & Business Services Council and the Financial Services Skills Commission, one key component of the talent pool finance firms should embrace is boomerang employees. Boomerang employees are former employees who have left for a new opportunity but are willing to return to their previous company.

Most workers (62%) said they would return to a former employer, and this percentage is even higher for workers hired during the pandemic, 69% of whom say they would return to their former employer.

Not only are boomerang employees viable candidates for recruitment, they are people who are familiar with the company already but are also able to bring what they’ve learned during their time away back to the organisation.

Conclusion

After two years of upheaval and change, there’s no question that the financial sector is facing serious challenges when it comes to retaining and recruiting talent. But rather than stand by idly and watch the Big Quit inflict damage on company culture – and the bottom line – organisations that re-evaluate their people processes and actively work to build a culture of connection, make employees feel valued and embrace new avenues to recruit talent will be the ones to thrive.