By Tony Brookes, Sales Director, Vacancy Filler Recruitment Software
According to a recent report1 from PwC, the anxiety of CEOs in the financial services sector regarding the availability of key skills continues to rise. 76 per cent of FS CEOs worry about shortages of digital skills within their workforce, while 91 per cent of FS CEOs believe they need to strengthen soft skills such as the creativity and emotional intelligence needed to innovate and connect with customers, according to the report.
Expansion into emerging markets, changes in finance products and regulations, the increasing use of technologies such as AI and predictive analytics, and Brexit means that finding talented people who can add value from day one is becoming more and more difficult. There has been a sharp decline in interest from EU graduates looking for UK jobs since the Brexit referendum; a recent LinkedIn survey2 states that as Brexit impacts upon the financial services industry, UK educated workers are taking a larger share of new financial services hires and the industry is becoming less international as a result.
What is required is a clear strategy for the whole recruitment and retention process, from planning the search and the brief, to looking at different ways of not only attracting talent but also keeping it through the crucial first few months.
Planning the search
Organisations in this dynamic sector understandably want to hire staff who can hit the ground running. However, for roles where soft skills – in short supply in this sector – are required, organisations should consider how flexible they will be in hiring staff with transferable skills from other sectors, and there are indications that they are starting to do this. At the same time, they need to examine closely what they are offering these hard-to-find recruits. Initial impressions are important – a good company brand, an easy-to-navigate and nicely presented, informative careers page with real visual appeal and which offer a good candidate experience during the recruitment process are vital if candidates are not to be tempted by competitors. Recent research we undertook shows that websites of even many top FTSE250 companies lack a specific graduate or careers page.
In addition to the usual company benefits, companies should look at the so-called ‘soft’ benefits that might sway candidates in their favour. Millennials in particular are more likely to be attracted by, for example, flexible and remote working, diversity, opportunities for learning and development and to contribute to wider society through their organisation, together with a supportive environment that promotes health and wellness.
The recruitment cycle
A slow, unresponsive recruitment process may lose the best candidates to companies with a more strategic approach designed to keep in touch with potential recruits at every step, and offer them flexible options such as the opportunity to conduct initial interviews by video from their homes. And, once hired, a surprising number of applicants either disappear before turning up for work on the first day, – so-called ‘ghost employees’ – or leave shortly after they have started, sometimes due to the information void that can occur between offer and acceptance of a job and a lack of a good onboarding process where the candidate is encouraged to feel they have made the right decision.
A bad candidate recruitment experience can not only damage a company’s relationship with a promising candidate but even an entire brand – candidates often do share their impressions online. The recruitment experience starts from the first view of the website and the careers page right the way through the entire recruitment process.
New ways of recruiting
These recruitment challenges are driving companies to use a wider range of recruitment options. Building a good brand and reputation and effective use of social media such as LinkedIn, Twitter, Facebook and increasingly other tools such as Instagram and Snapchat as well as, where appropriate, the more traditional route of press advertising and recruitment agencies often produces the best results.
In addition, companies are increasingly harnessing the power of online recruitment systems. These best of these platforms support the entire recruitment journey, including an applicant tracking system (ATS) to promote the role(s) on offer, posting simultaneously to multiple job boards including specialist boards. They ensure that there is a focus during the candidate recruitment journey on regular and frequent engagement with the potential employee so that throughout the various stages the candidate feels involved, up to and beyond onboarding. Such systems automate a great deal of routine work, including personalised acknowledgement of communications from a candidate and providing them with updates.
A business case for an integrated end-to-end recruitment process using an online recruitment system – which can be used by start-ups as well as large organisations – includes internal and external recruitment process efficiencies, reduction on dependency on agencies and expensive job advertising, improvement in the quality of candidates as the net can be cast more widely and the process is more efficient which means fewer good ones drop out, and better management information and compliance reporting. Hiring managers can quickly check where each candidate is at each stage of the process and can search on key words in online CVs and application forms for key skills, while the system performs background and criminal records checking if required, collects the required information about new hires and provides them with information they will need for the pre-onboarding and onboarding processes .
Retail Merchant Services
Retail Merchant Services, the largest independent card processing provider in the UK, is an example of a company that has found an online recruitment system very helpful in speeding up recruitment. As the company has grown, recruitment needs have increased substantially and the manual process they were using was becoming too time-consuming, particularly with a team of recruiters managing multiple vacancies. The seamless integration of the system with the company’s careers page and branding, together with the improved speed and efficiency of hiring for both the company and candidates have proved of great benefit to the company.
The need for a good recruitment and talent management strategy in the financial services sector, taking advantage of the latest technology developments to recruit, has never been more vital and will remain key to the success of this industry through the dramatic changes it is now undergoing.
‘MOVE FAST BUT DON’T BREAK THINGS’ – WHY FINTECHS WILL COME TO LOVE REGULATION
Alex Johnson, Director of Portfolio Marketing, FICO
The guiding ethos of fintech is move fast and break things. It’s the fundamental advantage that disruptors have over the incumbents they’re disrupting — the ability to move quickly and make mistakes, learn from them and deliver innovative services to customers. Generally, this ethos is presented as a virtue. Banking is ‘broken’ so any investments in improving it are both notable and noble – even if there are bumps along the way.
Conversely, anything that stands in the way of this ‘march of progress’ is generally cast as a villain.
The most prominent villain for fintech companies is regulation. From their perspective, it’s a competitive moat, based on rules written for a different century, that protects banks’ ability to make money without needing to innovate and offer more or improved services to their customers.
So, it’s easy to see why a fintech company — believing fully in the virtue of its mission and faced with a litany of illogical and intractable regulations — might just say ‘we’re doing it anyway.’ That’s what Robinhood co-founder Baiju Bhatt reportedly did when his company tried to roll out a checking and savings product that it claimed was insured without confirming that with regulators first.
The problem is that while we may mythologise the ‘move fast and break things’ ethos in the abstract, consumers don’t love it when their stuff breaks in the real world.
And when fintechs and challenger banks aren’t constrained by regulation (as they mostly are in the U.S and Europe) the harm caused by this ‘move fast and break things’ approach can be much more severe than a service outage or a false claim of deposit insurance.
Stories from overseas
In China, online P2P lending exploded in popularity, with the number of P2P lenders growing from 50 in 2011 to 3,500 in 2015. Then the whole industry imploded when it was revealed that 40% of P2P lending platforms were Ponzi schemes.
In India, online lending companies raised a record $909 million in venture capital last year (the third-biggest market behind the U.S. and China). And those lenders are now using personal data from borrowers’ mobile phones to make lending decisions – which although illegal, is reportedly ignored by Indian regulators.
In the Philippines (another emerging market where venture capital dollars for online lending are pouring in), the National Privacy Commission is investigating hundreds of complaints from consumers about lending apps leveraging their personal data to shame them into making their payments.
A prediction for the decade to come
In the 2020s, I believe fintech companies will come to love – or at least quietly appreciate – regulation for two primary reasons:
Fintechs and challenger banks understand that brand recognition and affinity is key to their long-term success. Building their brands will be a challenge. A recent survey of 2,000 Brits found 40% don’t trust challenger banks at all and 67% said they are more likely to do business with banks that have branches on the high street. As Zach Bruhnke, co-founder and CEO of U.S. challenger bank HMBradley recently said, ‘We’re going to have to grow by word-of-mouth and doing the right things for our customers.’
Fintechs and challenger banks focused on the long-term task of building brand affinity and trust will, over the next decade, come to despise bad actors that skirt the rules and dress up get-rich-quick schemes in the same language they use to describe their own firms. Regulations that constrain and/or shut down these bad actors will be increasingly appreciated by legitimate market participants.
In the 2010s, we saw the beginning of a trend that will strengthen in the 2020s — regulations designed to foster competition between incumbents and new market entrants. To date, such regulatory action has run the gamut, from vague (innovation sandboxes and special-use charters) to hyper-specific (U.S. regulators’ cautiously approving the use of alternative data, or the Bank of England considering giving non-banks access to its 500-billion-pound balance sheet). Perhaps, most promising, has been the work done by the Competition and Markets Authority (CMA), which has been proactively driving the adoption of rules and standards around Open Banking for past couple of years. O
ver the next decade, through careful management of public perception and increased investment in lobbying, fintechs and challenger banks will further reshape the regulatory environment from a competitive moat to a more level playing field.
Reaching fintech maturity
’As a licensed broker-dealer, we’re highly regulated and take clear communication very seriously. We plan to work closely with regulators as we prepare to launch our cash management program’.
This was the statement issued by the chastened co-founders of Robinhood shortly after they backed away from their plan to launch a checking and savings product without government insurance. And here’s the crazy part — that’s exactly what happened! Less than a year later the company announced a new deposit product, this time insured by the Federal Deposit Insurance Corporation (FDIC).
As fintech companies mature in the 2020s and the focus of their strategic objectives shifts from growth to profitability, regulation will play a vital role in transforming the ethos of those companies into something a bit more sustainable. Call it ‘Move fast, but don’t break things’.
HOW TO MERGE YOUR FINANCES AS A COUPLE?
By Nelisiwe Ndlovu, Certified Financial Planner at Alexander Forbes
There is never a good time to discuss finances with your partner, married or unmarried, and one key issue that needs to be discussed is whether you should merge your finances.
Joining all your money matters can seem overwhelming at first, so you don’t have to combine every bank account and credit card from the get-go.
Start by having an honest discussion with regards to your individual money management and financial commitments before deciding to merge or co-manage your household finances while deciding if you want to fully merge all your finances. Detail all individual income, expenses, and all your financial commitments. The best way to achieve this would be to first take your individual budgets and combine them. This will tell you what you can and cannot afford as a couple. If one partner does not usually budget, this is a chance to start doing so as this will ensure that your household finances are under control.
Before you think about merging your finances, be open and honest about:
- How much you earn – what is the income that you will bring home? What is the frequency of your income? Are you permanently employed or a contractor?
- What are your current individual expenses and financial commitments? List your assets and your current debt.
- Your individual financial goals and money management techniques – don’t worry if you might have not figured this out at the time of merging your finances – the important thing to do is to be open and honest so that you both build a stronger money foundation
- Disclose your financial obligations, this becomes very tricky if left until too late and may cause unnecessary tension in the relationship
- What are your goals as a couple – what is the purpose for merging your finances?
Married couples can formally or informally merge their finances as detailed above where household expenses are split between the couple (the split could be 50/50 or any fair split agreed upon by the couple, which could be based percentage-wise depending on one’s income). Some couples tackle finances by adopting the ‘pick a bill’ approach, where one couple pays the water and electricity while the other covers the food.
Being married does not mean necessarily that you need to have one joint account. You may also just want to open one joint account where you each deposit money to pay just your monthly household expenses.
The top five things to remember when merging finances as a couple:
- Have the ability to manage your own finances before expecting another person to merge their finances with you.
- Be mindful of your potential spouse/life partner’s money management behaviour and skills so that there are certain things you can address together before considering merging your finances
- Always keep an open line of communication – honesty is the best policy
- Set a money limit which you can each spend without having to consult each other
- Don’t forget to change your wills and beneficiaries on pension or provident funds as required.
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