With the rapid advancement of technology reshaping the industry and new roles like AI Engineers and Data Scientists popping up, the BFSI sector is embracing innovative strategies to attract and retain top talent.
A study revealed that 23% of senior finance professionals are concerned that AI might threaten their jobs, as 24% of financial organizations surveyed are starting to integrate AI-driven solutions into their workflows.
Interestingly, 82% of junior finance professionals believe that generative AI tools like ChatGPT will positively impact finance teams.
In light of these statistics, HR professionals in the finance sector need to focus on evolving job requirements, with AI becoming an integral skill demand.
The banking sector is poised to invest a staggering $500 billion in AI tools, signaling a huge shift in recruitment practices.
However, despite this investment, less than 30% of organizations are altering their focus on the skills and adaptability of their workforce, opting for short-term tactics over long-term strategy.
As the demand for skilled professionals continues to soar – with jobs in the finance industry expected to grow by 10% by 2026 – recruiting in financial services is all set to adopt forward-thinking recruitment strategies.
Top 5 challenges in recruitment in financial services
- Skills Gap
One of the biggest hurdles in finance recruitment is the widening skills gap employers need and those possessed by potential candidates.
The rapid advancement in artificial intelligence (AI) is also exacerbating this gap, as there is a growing demand for professionals who can combine financial expertise with technological prowess.
As technology continues to reshape the BFSI industry, it’s leaving recruiters scrambling to find individuals with the right mix of financial acumen and technological prowess.
Driven by technological advancements and emerging roles like data scientists and AI engineers, there’s a glaring gap between the skills demanded and those available.
70% of financial services CEOs identify the skills gap as a threat to growth.
PWC
- Labor Shortage
It’s no secret that the finance industry is facing a labor shortage. With an aging workforce and fewer young professionals entering the field, recruiters are left with fewer options to fill crucial roles.
This scarcity not only increases competition but also puts pressure on companies to offer attractive incentives to lure top talent.
By 2030, the global financial talent shortage could reach 10.7 million people due to the widening skills gap.
Korn Ferry
- Diversity and Inclusion
While diversity, equity and inclusion (DEI) initiatives gain traction, their integration into recruitment processes lags behind.
Financial institutions often struggle to translate DEI principles into effective hiring practices, leading to less diverse teams compared to other sectors.
With 60% of top talent stating they prefer to work for organizations with social values which are aligned to their own, it’s high time recruiters embraced bias-free and inclusive processes.
Women still hold only 12% of C-suite positions in the insurance industry
RSM
- Low Retention Rates
Finding the right talent is only half the battle; retaining them is the other.
High turnover rates plague the finance industry, often due to factors like lack of career advancement opportunities, employee burnout, or poor company culture.
Retaining talent poses a significant challenge, particularly among millennials in finance, as 48% said they were on the lookout for new opportunities.
Only 10% of millennials in the sector plan to stay long-term in their current roles.
PWC
- Poor Candidate Experience
In the age of Glassdoor and LinkedIn, a bad candidate experience can quickly tarnish a company’s reputation.
A survey found that nearly half of candidates in high-demand sectors, including banking, are inclined to reject offers due to a negative recruitment experience.
Lengthy hiring processes, lack of communication, and impersonal interactions can leave candidates with a negative impression of a company, leading them to even ghost mid-way.
On top of that, 56% stated that they would discourage others from applying as well.
PwC’s HR Technology survey
Top 7 strategies for recruitment in financial services
- Adopt AI in recruiting
Integrate AI tools into your recruitment process for multifold efficiency. It can automate tasks like resume screening, interview scheduling, candidate ranking & scoring, and evaluate candidates with automated video interviews, just to name a few.
Nowadays, recruitment automation has revolutionized hiring processes, with companies experiencing a 76% growth in candidate conversion rates, a 72% reduction in time-to-hire, and a 69% decrease in cost-to-hire.
Additionally, there’s been a threefold improvement in candidate experience, emphasizing the efficiency and effectiveness of automated workflows in attracting and retaining top talent.
To learn more, check out this case study on how a leading commercial bank in India used Zappyhire to achieve its hiring goals.
- Focus more on internal recruitment
Look within your organization for talent before seeking external candidates. Internal recruitment not only boosts morale but also saves time and resources.
Encourage career development and mobility programs to empower employees to grow within the company.
- Invest in your employer branding
Behind every successful hire lies a compelling narrative – one that reflects your organization’s values, culture, and mission.
Craft your employer brand story with authenticity and passion, highlighting what makes your company unique and why someone would want to be a part of it.
Workforce diversity – With a diverse workforce, you’ll bring fresh perspectives and ideas to the table, driving growth and success for your organization.
Inclusive opportunities – Create inclusive opportunities for candidates from all backgrounds, ensuring equal access to employment and advancement.
Digitization over manual paper processes – Embracing digitization is key to staying competitive in recruitment, especially with Gen Z and Millennials comprising a major portion of the workforce.
Recruitment automation tools and platforms improve efficiency, and enhance the candidate experience.
- Engage in recruitment marketing
In the BFSI sector, where competition for skilled professionals is fierce, recruitment marketing can be a game-changer.
From highlighting career growth opportunities to emphasizing the organization’s commitment to innovation and customer service, effective recruitment marketing can attract top talent who align with the company’s goals and values.
Additionally, recruitment marketing automation is becoming increasingly popular, and investing in it can significantly improve efficiency, and enhance the candidate experience.
- Incentivize employee referrals
Tap into the hidden talent pool by incentivizing employee referrals. Offer rewards or bonuses for successful hires referred by current employees.
Employee referrals not only attract qualified candidates but also cultivate a sense of community and belonging within the organization.
If you do it right, you’ll access a pool of qualified candidates who come with the added bonus of a stamp of approval from trusted sources.
- Optimize candidate experience
Enhance the recruitment journey for candidates to leave a positive impression, regardless of the outcome.
What you should do – Offer clear communication, timely feedback, and personalized interactions to make candidates feel valued and respected.
How you can do it – By making use of recruitment automation to its fullest.
Recruitment automation can automate email notifications and updates, keeping candidates informed about their application status, next steps, and any relevant updates.
This ensures that candidates receive timely feedback on their applications and interviews, helping them understand where they stand.
Additionally, AI-video interview platforms allow candidates to complete interviews at their convenience, eliminating the need for scheduling conflicts.
They can participate in interviews from anywhere, at any time, making the process more accessible and accommodating to their schedules, which makes way for a stellar candidate experience that will draw top fintech talent to your company.
- Increase compensation and perks
Essentially, make them offers they can’t refuse.
The financial services sector is experiencing relentless demand for talent, driven by rapid technological advancements and increasing customer expectations.
Banks are actively responding to the evolving needs of their workforce, with a significant shift towards remote work arrangements.
70% of banks now allow one or more days of remote work per week, a substantial increase from 52% in the previous year.
Nearly 11% of banks are open to hiring fully remote positions in select areas, reflecting a growing acceptance of remote work models. Despite these adaptations, turnover remains a concern within the banking sector.
Lack of career development ranks as the leading turnover rationale at 45%, followed closely by inadequate total compensation at 42%. Recognizing the need for robust hiring as well as retention strategies,
The finance industry firms are increasingly investing in perks and salaries to attract and retain top talent amidst fierce competition.
Final thoughts
Recruiting top talent in the financial services industry does not require you to be sterile in your practices and think only in terms of the cold strategies to put in place.
For instance, a strong employer brand is not just about showcasing your company’s achievements – it’s about sharing your stories in a way that speaks to the hearts of potential candidates.
Similarly, recruitment marketing showcases your company’s unique appeal to top talent. You emphasize the strength of your community through employee referrals. Beyond competitive compensation, it’s your supportive work environment, growth opportunities, and sense of purpose that truly distinguishes your company as an attractive workplace.
After all, at the heart of every successful recruitment strategy is a genuine understanding and appreciation for the individuals who make your company thrive.
