In 2021, we started to feel the impacts of the Great Resignation. While society, the workplace, and the economy have already recovered, we might be entering a Great Resignation 2.0 era.
Unfortunately, the finance industry is one of the most affected, and more finance professionals might seek greener pastures in fintech companies. So, how do you retain top financial talent?
Cause of Disengagement Among Professionals
One of the main causes of disengagement today is the shifting landscape of work. As the economy slowly regains momentum, many businesses are ramping up to focus more on profitability and cost reduction. While this may be a more sustainable business practice, many employees don’t agree.
According to PwC, the number of employees planning to change their jobs increased to 28 percent compared to 19 percent during the Great Resignation in 2022.¹ Furthermore, 62 percent of the respondents mentioned they experienced a lot of changes (not all positive) in the last 12 months, and 43 percent of the respondents are considering asking for a pay raise due to the increased workload.
Even Netflix’s parental policy, which allowed new parents up to a year of leave during their child’s first year, has been changed.² This highlights the growing emphasis on cost management in the workplace. Unfortunately, many employees are being affected negatively.
The Effects of Disengagement and the Millennial Generation on the Finance Industry
However, is the finance industry at stake? According to a Compdata survey, the banking and finance industry has one of the highest turnover rates at 18.6 percent.³ Furthermore, many millennials are entering the job market. While younger generations offer more creativity and innovation in the workforce, they’re also one of the most disengaged generations, often hopping from one job to another.
Low Engagement
Aside from the effects of increased responsibilities in the workplace, millennials generally possess lower engagement levels. According to Gallup, 60 percent of millennials are open to new job opportunities.⁴
This is because not all millennials see their jobs as a means to provide for their daily needs. Instead, many look for professional development opportunities. They seek purpose in their jobs and want to contribute to a greater cause.
Furthermore, after the recent pandemic, many are looking for flexible work arrangements like remote work or a hybrid setup. For these reasons, the millennial workforce tends to switch organizations to find better opportunities.
Read more: Adapting Leadership Styles for Hybrid Teams: Leading with Empathy and Accountability
Flexibility and Work-Life Balance
Since work flexibility is an important factor to millennials, the usual long hours in the financial services industry may not easily attract the younger generations. Due to the nature of the work, financial analysts often work more than 40 hours a week, with some reaching 70 up to 80 hours.
Paired with the increasing responsibilities, decreasing perks, and transition to in-office work setups, it’s highly likely that finance professionals may leave their jobs in search of greener pastures. As the most likely competition, they might enter other financial institutions or transition to fintech.
Read more: Closing the Leadership Gap: Why Strong Risk Management Professionals Are Essential for Stability
How Can the Finance Sector Prevent Another Great Resignation?
The Great Resignation 2.0 has not begun, but if the finance industry doesn’t cope with the challenges, it might experience a more devastating job exit than in 2021. This is why business leaders and employers must discover the right approach to handling their workforce. The key is to find the balance between business objectives and employee satisfaction. Here are five strategies that you can apply to your organization:
1. Embrace Digital Transformation
Digital transformation is not just for fintech companies. In fact, traditional financial institutions should integrate new technologies into their organization. Not only does this allow for faster processes, but it also alleviates some of the burden on employees.
Millennials are considered tech-savvy, while later generations—Gen Z, who have already entered the workforce, and Gen Alpha, who will follow—are even more technically inclined. This means the future workforce is prepared for technological innovations and eager to embrace new advancements.
Read more: The High Stakes of Digital Transformation: Recruiting Leaders Who Can Navigate Change
2. Maintain a Strong Employer Brand
Millennials and younger generations value the reputation and image of the company they work for. Back in 2008, the financial crisis had significantly damaged the industry. This reputational damage is one of the reasons preventing younger generations from entering the industry, with many preferring to join tech and startup companies.
At the same time, it’s also important to adopt a positive company culture, such as adhering to ethical and industry standards, providing equal opportunities to employees, or applying best practices to workforce management. This can help retain talent and increase employee engagement.
3. Consider Various Retention Strategies
There are a number of employee retention methods you can try. The goal is to offer a dynamic workplace that caters to the needs of the employees. This is more than just offering free snacks or casual Fridays; companies must address the core challenges employees face and provide exactly what they need. It includes genuine and deliberate actions that fully satisfy every employee.
Here are some strategies you can implement:
- Competitive compensation and attractive benefits packages
- Flexible parental leave policies
- Clear career path, development programs, or mentorship opportunities
- Flexible schedule, remote, or hybrid work setups
- A positive work environment focused on creativity and collaboration
- Purposeful and meaningful work
- Mental health support or financial wellness programs
Leading institutions like Bank of America and Digital Bank Monzo offer sabbatical leaves to employees in addition to traditional leave benefits.3 This allows employees to take longer vacations or pursue personal interests, giving them a more balanced life and overall satisfaction.
4. Strengthen Corporate Social Responsibility
As younger generations desire purpose in their jobs, a strong corporate social responsibility (CSR) initiative will help attract top talent. Aside from gaining strong partners and clients, practicing sustainability, engaging in ethical business decisions, and participating in social well-being can help attract millennials to your organization.
It’s no secret that millennials are drawn to employers who contribute to social and environmental causes. Highlighting this during talent acquisition can increase your chances of finding exceptional employees from the beginning.
5. Let the Younger Generations Be Heard
Millennials appreciate it when employers value their opinions and suggestions. Allow your younger generations to lead various projects on their own and give them the autonomy to make decisions. When employees feel heard and appreciated, they tend to become more engaged in their careers, allowing them to boost productivity and stay longer.
Many baby boomers are retiring, and Gen Xers will soon follow. Empowering younger generations with greater autonomy, leadership opportunities, and a sense of purpose will foster greater engagement, productivity, and long-term commitment.
Retain talent, one great hire at a time. Madison-Davis can help.
The financial services sector is a challenging industry, especially with the latest technological advancements, emerging and exiting workforce, and societal constraints.
Madison-Davis is an expert at finding the right fit between employers and employees. If you’re looking for finance professionals, we are your partner. We also place people in tech and other professional services. Contact us today.
References
- “Global Workforce Hopes and Fears Survey 2024.” PwC, 24 Jun. 2024, https://www.pwc.com/gx/en/issues/workforce/hopes-and-fears.html#lead-in-new-ways-to-build-resilience-among-a-stressed-out-workforce
- Toonkel, Jessica. “Netflix’s Extraordinary Parental Leave Was Part of Its Culture. That’s Over.” Wall Street Journal, 12 Dec. 2024, https://www.wsj.com/business/media/netflix-unlimited-parental-leave-roll-back-culture-a962f50e?mod=hp_lead_pos7
- Ufer, Tim. “The Millennial Turnover Problem in the Financial Services Industry.” Hppy, 2024, https://gethppy.com/employee-turnover/the-millennial-turnover-problem-in-the-financial-services-industry
- Adkinds, Amy. “Millennials: The Job-Hopping Generation.” Gallup, 12 May, 2016, https://news.gallup.com/businessjournal/191459/millennials-job-hopping-generation.aspx
