Change for growth 2011 - Why banking and finance must change its approach to employee engagement


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Why the banking & financial services sector needs to adapt its approach to employee engagement

Banking & Financial Services workplace study 2011

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Change for growth 2011 - Why banking and finance must change its approach to employee engagement

  1. 1. Page 1 0f 9Change for growthWhy the banking & financial servicessector needs to adapt its approachto employee engagementBanking & Financial Services workplace study
  2. 2. Badenoch & Clark / Banking & Financial Services workplace study 2011 Page 2 0f 9Change for growthBanking & Financial Services workplace study 2011 Foreword On the surface, it appears that the banking & financial services The landscape also continues to change at a fast pace. Many sector is fully on the road to recovery – confidence is growing, organisations have gone through, and continue to go through, organisations are expanding into new areas and job volumes large-scale transformational programmes, and the skills and are still continuing to rise. Yet dig deeper, and confidence is attributes that a professional needs to bring to the table is still tempered by caution. Employees remain disengaged and changing. The continual introduction of new legislation and concerned for their future, still haunted by the redundancies regulations is also creating new demands within the sector, and job insecurity of the past few years. and is bringing new pressures with it. It’s been a difficult time for senior managers. Issues to address have bordered on crisis management and they’ve taken decisive action. Now, however, is time to turn attention back to their people. To push ahead with growth plans and retain and attract talent, management needs to ensure the message of confidence gets through; they need to reward loyalty, and demonstrate that Kay Senior things are more positive and secure. Operations Director, Banking & Financial ServicesAt a glance• The sector continues to recover from the • Employees’ motivations are changing but • Organisations need to focus their recession; most employers are looking to employers have been slow to catch on – attentions on employee engagement increase their headcount this year, either money is no longer a key motivator with – a significant number of employees are through growth in existing or new areas quality of work and career progression not engaged and are looking to quality of business favoured over bonus levels. Work-life of management and communication balance is also increasing in importance. from leadership as the key factor in• Recruitment remains a key challenge addressing this. for employers – almost half believe it’s • The ideal attributes and skillset of harder to attract and retain talent now a financial services professional is • Offshoring is the most common strategy than 12 months ago. changing – employers are placing even being undertaken by organisations keen more emphasis on strong communication on driving cost-efficiencies and process• The recession has left its legacy – skills and analytical skills compared efficiency; however organisations need employees remain concerned about to last year. Understanding financial to ensure that the necessary controls redundancies, and are not aware of services legislation is also being are in place in order to create an increasing job opportunities while increasingly valued, alongside people effective strategy. negative public perception has made the management skills. sector a less attractive place to
  3. 3. Badenoch & Clark / Banking & Financial Services workplace study 2011 Page 3 0f 9The legacy of the recessionThe recession saw many banking and financial services organisations drastically cut backon headcount, and certain areas of business reduce heavily in size and profitability.In a bid to recover for lost time and missed revenues, the sector is now actively pushingahead with growth and recovery.Almost two-thirds (63%) of employers are reflects this increaseexpecting to increase their headcount in in recruitment activity. An independent It’s clear from thethe next 12 months, and in Scotland this salary data information website, providedrises to 71.4%. in conjunction with Badenoch & Clark, it employees and jobseekers shows that banking & financial services that we spoke to thatThere are a number of reasons for this contract vacancies are growing faster thanincrease: while growth in existing any other sector, and on the permanent the recession has hadareas is the primary driver, fast makingup for recession losses, (accounting side, it has one of the highest number of vacancies compared to other sectors, and a significant long-for almost two-fifths of responses the second highest growth (data from May 2011). term impact, and thatacross the UK at 38.6%, and 54.3% inScotland specifically), almost one-fifth Public perception makes an impact professionals are stillof employers (19.6%) are identifying While employers are seemingly upbeat areas of business. While some of in their outlook, employees seem far lessthe larger firms will have areas that are so. When asked whether the turbulenceexpanding, and others that are retracting, of recent years has made the sector a lessit’s fair to say that most organisations attractive place to work, an alarming 34.2% the presence of part government-ownedare keen to sustain a flexible workforce responded “Yes”. Over a third (36.4%) banks in Scotland, the results of theso that they can react quickly to market gave the public perception of the industry Scottish market are even more pronounced,trends. This is giving rise to staff being as the main reason for this, however wider where over three-fifths (62.1%) saw publicseconded onto project roles. consequences of the recession have also perception of the industry as the key factor played their part – higher workloads in making it a less attractive place to work.Another 15.7% see their restructuring (34.6%), excessive regulation (28.1%) andplans as a reason for increasing bonus level restrictions (25.5%) were all It’s clear from the employees andheadcount. Ironically, while increased seen as contributory factors. Almost a fifth jobseekers that we spoke to that theregulation is regarded by over a quarter (18.2%) even went so far as to suggest recession has had a significant long-termof employees (28.1%) as a reason to make that London is no longer seen as being as impact, and that professionals are stillworking in the sector less attractive, 15% competitive on the global market. Perhaps suffering. A significant number pointed toof employers have seen it as a reason to due to the high profile attention around the ongoing issues around redundancy, andincrease headcount. Employers – What is your primary reason for increasing headcount in the next 12 months? Opportunity for growth in existing areas 38.6% Opportunity to expand new areas of business 19.6% Restructuring 15.7% Increased regulation 15.0% Transformation projects 11.1% Employers were asked: What is your primary reason for increasing headcount in the next 12 months? Respondents were invited to select one that applied. All figures are rounded to one decimal
  4. 4. Badenoch & Clark / Banking & Financial Services workplace study 2011 Page 4 0f 9that a continuing atmosphere of uncertainty employees do not feel like they can trust into the future. Increased regulation wasand job insecurity prevails. Professionals are their employers any longer. what employers overwhelmingly see asalso not under the impression that there are having the biggest impact on the sectorplenty of job opportunities out there, despite In some cases, it may be that the drive to in the coming 12 months (49.8%). Theemployers telling us that there are; ‘fewer ensure major banking institutions return pressure to implement and deliver on majorjob opportunities’ came up as the greatest to private hands at the earliest possible pieces of regulation such as TCF (Treatingchallenger for employees, both in the last juncture, and the motivations behind and Customers Fairly), Solvency II and the RDR12 months (26.5%), and in the next 12 implications of such moves, have not been (Retail Distribution Review) is causingmonths (39.1%). communicated in a positive way to the very concern amongst employers. Such pieces people responsible for carrying out the of regulation have an impact on resources,It seems that while employers are continuing necessary change. whether creating demand for more talent, orfull steam ahead, they seem to have to upskill existing employees.forgotten to communicate this renewed What next for the sector?confidence and ensuing job opportunities Despite anticipated growth and recovery, theto their employees – or worse still, changes of recent years look set to continueThe challenge to attractWhile most employers are planning to see this as a factor in their ability to attract.increase their headcount in the next 12 This suggests that employers are fully Organisations need to paymonths, almost half (48.1%) believe it’s aware of the destabilising impact suchharder to attract talent now than 12 months projects can have on their staff, affecting attention to their employerago. Competitor growth and the simple factthat so many organisations are looking for employees’ perspectives on their long-term security and career expectations. However, brand, since the war forthe same people, seems to be a common it must also be recognised that this is talent doesn’t look set tofrustration. The increase in regulation, such an ongoing factor within the banking &as Solvency II, is also making it harder to financial services sector, and is unlikely to dissipate any time soon.find talent with the necessary skills. change any time soon.The recession also continues to cast its The good news for employers is that there their strengths and their values, and whatshadow. Employers are well aware of are plenty of professionals willing to they can offer that’s different to otherthe damage that was caused during the consider a new opportunity. Nearly three- organisations.recession with almost a quarter (24%) quarters of professionals we surveyedfeeling that public perception of the (71%), are either looking for a job now or will Money is not the only motivatorindustry is one of the three things that be in the next six months. Employers need to To ensure a successful recruitment strategy,most affect their ability to attract talent. A harness this opportunity while they can. it’s essential that employers understandfew employers suggested negative public the key motivations for candidates. Theperception was likely to have a direct impact In particular, organisations need to remuneration package should be one parton graduate intake. Since the recession, pay attention to their employer brand, only of an attraction strategy. Base salariesmany organisations have also gone particularly since the war for talent doesn’t and bonus levels are still seen as keythrough, or are going through, significant look set to dissipate any time soon. motivators by clients, with the former as therestructuring and transformation projects, Employers need to actively demonstrate key factor in attracting talent (highlightedand almost a quarter (23.6%) of employers to both potential and current employees by 69.4% of employers), and bonuses Employers – What top 3 things most affect your ability Candidates – What are your top 3 motivations when to attract talent? looking for a new role? Level of base salary 69.4% 52.0% Level of base salary 63.5% Quality of work 35.8% Quality of work 58.7% Bonus levels 34.9% Career progression 51.6% Employers were asked: What top 3 things most affect your ability to attract talent? Respondents Candidates were asked: What are your top 3 motivations when looking for a new role? were invited to select all that applied. All figures are rounded to one decimal place. Respondents were invited to select all that applied. All figures are rounded to one decimal
  5. 5. Badenoch & Clark / Banking & Financial Services workplace study 2011 Page 5 0f 9coming in as the third most important The results act as a clear message to Interestingly employers in Scotland seemfactor at 34.9%. Yet there are a number employers – to attract and retain the to have understood jobseekers’ motivationsof other factors that influence jobseekers best, you must stand out in the market much better than their peers south of thewhen deciding on a role. Quality of work with examples of good quality work and border. Level of base salary and bonus comewas highly regarded by jobseekers, with a strong brand. But more than this, you much further down the list of perceivedalmost three-fifths (58.7%) of the vote, and must be able to provide clear career factors affecting Scottish employers’ abilitynoticeably career progression at over 50% progression opportunities, and a to attract. Instead, their top 3 points wereof the vote (51.6%).Other key factors worth strong management team that develops quality of work (47.8%), communication fromnoting were perception of employer brand its employees and makes them leadership (45.7%) and quality of manager(26.1%) and strong management/good feel valued. (32.6%). London employers may do well toline manager (26.1%). look to their Scottish counterparts when they next go out to market.The changing face of the workerWith the public and media keen to criticise when it comes to looking for a new role.the banking & financial services sector for In the past, professionals in the sector The demand for a greatersome time now, for many professionals were accustomed to working very longworking in the sector, the last year has hours, appeased by the large salaries and work-life balance reflects a bonuses that came with the job. Since thisbeen a rough ride, and the impact of therecession and ensuing negative public is no longer the case for many of them, wider trend where youngerattention has left a workforce battered and they are not to be duly rewarded, then generations are demandingand bruised. organisations may not be able to expect as much from their employees in the future. a better balance.There is a common misperception that‘bankers’ and those who work in financial This demand for a greater work-life balanceservices are given unjustifiably large is being seen in businesses across thesalaries and bonuses; however we know UK, and reflects a wider trend wherethis is, of course, a far cry from reality younger generations are demanding afor the vast majority in the sector, and better balance. While financial services Candidates – If you have seen your baseignores the complexity of the situation. have perhaps been behind the curve in salary or bonus reduce, has this madeThe perception of the press and public addressing this change in motivations, our you want to leave?that salary and bonus levels were grossly research shows that it is fast catching up,inflated led to many organisations re- and to attract the new generation coming No 48.1% No, money is not my only motivationevaluating these levels, and as such, they through, it is worth organisations thinkingcame down last year – and in most cases about their offering to attract new talent. 71%have not gone up significantly this year, ifat all. Two-thirds of professionals (66.2%) A skillset in demandhave seen their bonus stay the same this The last year has also seen a changeyear, and 60.5% have seen their salary in the skills and attributes demandedstay the same or only go up by a of professionals working in the sector. 23.4% No, it crosses themaximum of 5%. Communication skills remain the key skill whole of the banking & to have, and are even more valued than financial services sector, it’s a fact of life nowOf those that did see their salary and/ this time last year (moving from 57.3%or bonus reduce last year, it’s interesting to 68.8%), as are analytical skills (atto report that for most, there is a general 45.6%, compared to 37.1% last year). Mostacceptance of this change in events – significantly, change management skills Yesalmost half (48.1%) said that money is not are less in demand than last year at just 20.0% Yes, I am thinkingtheir only motivation (which increases to over a quarter (27.8%). This suggests that of leaving70.6% for those working in the Scottishmarket), and an additional quarter (23.4%) other skills are perhaps more in demand to manage the change that is still going ahead, 29%said that it’s a fact of life now in the sector. but it may also demonstrate that, after 1, 2 8.4% Yes, I have already or 3 years into major change programmes, left a role because ofPerhaps the upshot of this is that there that the sector has upskilled in this area. receiving less moneywill be a greater expectation of creating areasonable work-life balance. Over a third Conversely, people management has gone Candidates were asked: If you have seen your base salary or bonus reduce, has this made you want to leave?(35.8%) of professionals saw work-life up the value chain since last year (from Respondents were invited to one that applied. All figures are rounded to one decimal place.balance as one of their Top 3 motivations 12.4% to 26.6%) –organisations are
  6. 6. Badenoch & Clark / Banking & Financial Services workplace study 2011 Page 6 0f 9aware of the damage that has been caused ago. Commercial awareness also remainsto staff morale and engagement and realise key, being fourth in importance at almost Communication skillsthat this needs to be addressed through 40% (38.8%).strong management. remain the key skill to Professionals themselves are largely in have, and are even moreUnsurprisingly, the approach to managing agreement with these skills, howeverrisk remains a vital attribute when recruiting they also highlighted the importance of valued than this timenew staff. Likewise the understanding offinancial services legislation is also on the relationship and client management, which was echoed by employers. In addition, there last year (moving fromincrease in terms of importance, accounting were many comments around attention to 57.3% to 68.8%).for over a quarter of the vote this year detail and teamwork, being a self-starter,(25.7%), but less than a fifth (18%) a year and simple hard graft. Employers in 2011 – What are the main skills and attributes Employers in 2010 – What are the main skills and you look for when recruiting new staff? attributes you look for when recruiting new staff? Strong Communication skills 68.8% 52.0% Strong Communication skills 56.3% 52.0% Analytical skills 45.6% Change management skills 40.2% Approach to managing risk 41.4% Approach to managing risk 35.6% Commercial awareness 38.8% Analytical skills 35.6% Project related skills 32.5% Project related skills 28.7% Employers were asked: What are the main skills and attributes you look for when recruiting Employers were asked: What are the main skills and attributes you look for when recruiting new staff? Respondents were invited to select all that applied. All figures are rounded to one new staff? Respondents were invited to select all that applied. All figures are rounded to one decimal place. decimal place.A workforce on the moveAlmost half (47.5%) of employers think would suspect. Instead over half are veryit is harder to retain talent now than 12 much motivated by the quality of work If employers want to be suremonths ago. The level of base salary on on offer, 58.7%, and career progressionoffer is their major concern, with 65.3% opportunities, 51.6%. While employers of retaining talent, theyseeing this as one of the Top 3 reasons clearly recognise the importance of offeringfor not being able to retain talent. With career progression, (putting this in second need to look carefully atthe emphasis firmly on monetary value, position with 40.2% as most affecting their achieving the right balanceemployers also place much importance ability to retain), they have not fully got theon bonus levels, with almost two-fifths significance of it, and the contrast in what between remuneration(39.7%) regarding this as one of the Top 3factors in retaining talent. A number argued employers and employees are ranking as the key issues highlights a potential future and other factors.that by regulating the industry on bonus concern. If employers want to be sure ofstructures, it affected their ability to retain, retaining talent, they need to look carefullyparticularly since there are organisations at achieving the right balance between Over half (52.4%) value work-life balance,who are not regulated by UK guidelines or remuneration and other factors. In this while less than a quarter (26.2%) arepublic pressure, and can therefore be more way, bonus levels can be relied upon less, motivated by career progression. This lastcompetitive with what they offer. and balanced more against creating career figure may be a reflection of the smaller ladders and exploring career progression Scottish market, where career progressionChanging motivations opportunities, or even sideways moves, opportunities are more limited than inInterestingly, bonus levels barely feature as with their staff. London. This should be warmly welcomeda motivator for jobseekers, with less than by employers in Scotland as they believe10% regarding this as one of their Top 3 What is worth noting is the marked it’s the number one reason (55.3%) formotivators. While the level of base salary difference between Scottish employees and what affects retention. To effectivelyremains key (with almost two-thirds, 63.5%, those in London. Scottish employees by recruit and retain talent in the Scottishseeing this as a Top 3 motivator), banking & contrast, overridingly value quality of work financial services market, it’s essentialfinancial services professionals are not half with over three-quarters (77.4%) having this that employers take a different tack whenas motivated by money as their employers is as one of their Top 3 motivators. positioning their
  7. 7. Badenoch & Clark / Banking & Financial Services workplace study 2011 Page 7 0f 9 Candidates – How engaged do you feel with your Candidates – What are your top 3 things that impact upon current organisation? your levels of morale and engagement? Very engaged 21.6% Quality of work 74.9% Quite engaged 46.8% Quality of manager 64.9% Not very engaged 22.8% Level of base salary 54.5% Not at all engaged 8.8% Candidates were asked: How engaged do you feel with your current organisation? Respondents Candidates were asked: What are your top 3 things that impact upon your levels of morale and were invited to select all that applied. All figures are rounded to one decimal place. engagement? Respondents were invited to select all that applied. All figures are rounded to one decimal place.To realise the potential retention timebomb, projects have also left many employees with 44.4% believing communicationit is worth highlighting that less than feeling disengaged. For those employers from leadership is key. With this in mind,10% (9.7%) of professionals are happy to who have been through significant change, organisations need to look carefullyremain in their role for the foreseeable it has meant that any long-term planning at how they approach their internalfuture. While the sector has never been one has fallen by the wayside – which may communications and whether there is awhere employees remain for a long time in explain why career progression is not a sufficient frequency of communication fromone organisation, almost 80% (79.4%) of priority. As we stand, less than a quarter the leadership, and the exact messagesprofessionals anticipate moving jobs within (21.6%) of employees feel very engaged that are going out. At the same time,the next year, and in Scotland this is even with their organisation, while almost a management needs to change its focus.more dramatic with 85.8% wanting to move. third (31.6%) feel not at all or not very Much of the last few years has been takenThis has come down since last year (87.2%), engaged. This is a significant number and up with crisis management and handlingbut these are significant numbers which demonstrates the need for organisations redundancies, and with no direct action toemployers need to address. If organisations to refocus their attentions back on their remove this atmosphere, employees areare intent on increasing their headcounts staff and kick start a proactive engagement still feeling the ill effects. Yet within the next 12 months, factors such as strategy. While some organisations are organisations now looking to boostcareer progression will become even more focusing on internal mobility programmes headcount, now is the time for managersimportant. Otherwise, organisations will be and engagement initiatives, too many to go back to the core basics ofin real danger of seeing their investment appear not to be doing enough, or not management, and start instilling confidencein new staff lost when talented employees enough of the right things. back into their teams. In doing so, you willcan’t see their long-term future in the remove the misperception that employeesorganisation and leave. Management and leadership remain the have of no job opportunities and no career strongholds for employee engagement. progression prospects, and ultimately youA focus on engagement Almost two-thirds (64.9%) of professionals may hold onto your staff for longer.Since the recession, major redundancy regard the quality of manager as key toprogrammes and large-scale restructuring affecting morale and engagement levels,Do cost efficiencies compromise control?This last year has seen incredible While there are a number of perceivedchange across the banking & financial benefits of change, the clear driver for most organisations has been cost. Over 90% saw Some organisations haveservices sector, with over half (53.8%) oforganisations we spoke to having been cost efficiencies as the main reason for this been forced to divest due tosubject to some form of divestment, change. Secondary to costs, almost two-outsourcing, off- or nearshoring. These fifths (38.6%) of organisations saw greater governmental decree ratherhave tended to affect the infrastructure process efficiency, with better service than any specific strategy.of organisations, such as IT, Operations, coming in third in importance at 23.5%.Administration, HR, Finance and FrontOffice support. In addition, some Of those considering change, offshoring sustainability and flexibility. Yet,organisations have been forced to divest appears to be the most likely route with organisations need to take care beforedue to governmental decree rather than 63.8% of organisations preferring this they embark on such a programme – whileany specific strategy. These same strategy, while in Scotland specifically, the cost-efficiencies are undeniable, otherorganisations are also going through huge both offshoring and outsourcing are objectives are not always so successfullytransformation programmes in order to favoured with 56.3% for both strategies. met. Of those organisations that haveattain cost, process and service efficiencies. Another driver in this decision is around brought areas of the business back
  8. 8. Badenoch & Clark / Banking & Financial Services workplace study 2011 Page 8 0f 9house, exactly half did so to obtain greater and genuine questions need to be askedcontrol, and another two-fifths (40.4%) did over whether the change will truly achieve Organisations mustso to improve customer service levels. improved customer service. It’s not surprising to report that some organisations consider very carefullyBefore embarking on a new strategy, have specifically pledged to have all their what process managementorganisations must consider very carefully service centres remain in the UK for thiswhat process management needs to be exact reason. In not addressing such needs to be put into placeput into place to ensure there is no loss of matters, organisations run the risk of failing to ensure there is no losscontrol. Likewise, if one of the main drivers on their ultimate objectives - and potentiallyis to provide a better service, then this spending more money by bringing it back of control.needs to be balanced with cost-savings, in-house at a later date. Employers – What were, or will be, the main reasons for your organisations in outsourcing, offshoring or nearshoring? Cost-efficiencies 90.2% Process efficiencies 38.6% To provide a better service 23.5% Consolidation 19.0% Regulation 13.7% Employers were asked: What were, or will be, the main reasons for your organisations in outsourcing, offshoring or nearshoring? Respondents were invited to select all that applied. All figures are rounded to one decimal
  9. 9. Badenoch & Clark / Banking & Financial Services workplace study 2011 Page 9 0f 9Details and methodology Related articlesThe research in this report is based on The research surveyed a range of Workplace study 2010 The new front in the war for talentresponses received from over almost 900 employees, from those earning £30,000,banking & financial services professionals, up to over £250,000, as well as HR and Workplace study 2009gathered through telephone and face to face line managers across a broad range of Is banking &financial services heading for a brain drain?interviews by Badenoch & Clark consultants banking & financial services sectorsacross the UK. The report also draws upon and businesses. Workplace study 2008the extensive market knowledge held by our A longer term view. Looking beyond the current crisisindustry experts. Career planning essentials for employers A Badenoch & Clark guide Developing your career planAbout Badenoch & Clark A Badenoch & Clark guide Employer branding essentialsWhether you’re looking for a fresh career organisations, understanding their precise A Badenoch & Clark guidechallenge or you’re an employer looking needs and getting a good feel for theirto recruit talented professionals, you’ll culture. And our focus on building industry Your personal brand: making yourself attractive to employersappreciate working with a recruitment knowledge means we can advise on broader A Badenoch & Clark guideconsultancy that really understands recruitment trends in your industry.your needs. Copies can also be requested from Victoria Golding at Our UK-wide presence means we have the victoria.golding@badenochandclark.comAt Badenoch & Clark we focus on connecting strength and depth to deliver a truly tailoredthe right organisations with the right service. It’s not a one-size-fits-all approach.people – whether for permanent, interim, We tailor our advice to your particular Other Badenoch & Clark resourcescontract or temporary accounting and needs. We positions. We understand that it’s Insight Regular analysis of current trends in your market.much more than filling vacancies. It’s about Which means that when it comes to building Visit www.insight.badenochandclark.commaking the right connections between your team or finding your next career move,skills, cultures and roles. there can by only one choice of accounting Connections Our unique magazine for customers and contacts and finance recruitment partner. of Badenoch & Clark. Packed with comment,Our clients tell us that we’re particularly opinion, news and analysis on recruitment, talentgood at getting under the skin of their management and broader business issues. See past issues at www.badenochandclark.comContact us Career guides A series of ‘how-to’ guides for employers and employees focusing on topics including employerFor more information on our workplace study please contact Victoria Golding branding, career planning and work-life balance.on 020 7356 0762 or at A quarterly index tracking employee happinessFor enquiries and comment on the Scottish market, please contact Arnie Sathiy across the UK office workforce. Results byon 0131 524 9020 or at profession and region.© 2011 Badenoch & Clark. All rights reserved. Badenoch & Clark accepts no liability for the accuracy of the contents or the opinions expressed herein.Recruitment specialists for: Accounting & Finance, Banking & Financial Services,Human Resources, IT, Legal, Marketing & Communications, Procurement & Supply Chain,Project & Programme Management, Public