From digital transformation to the rise in cryptocurrency and robo-advisors, credit unions and regional banks have had a bumpy ride over the past five years—and that's before the pandemic struck. Throughout these changes, there is one constant: talent is always hard to find. In this blog post, we'll look at some of the biggest trends in financial talent and explore the ways in which competencies can help banks and credit unions stretch their talent resources further.

Talent is a top issue

While a lack of talent has become an urgent issue in virtually every industry during the pandemic, the banking industry, which faces rapid digital transformation and heavy competition from fintechs, has faced some of the biggest challenges.

According to Rivel Consulting, 80% of banks and credit unions say staffing is their biggest concern, and industry experts don't see the problem resolving any time soon. But for many financial employers, the "three R's"—restructuring, reskilling, and remote work—are helping to ease the situation.

Restructuring

According to McKinsey, banks began shifting their organizational structures in response to the pandemic. As remote work broke down the traditional chain of command, and rapidly developing situations created the need for faster reaction times, financial institutions began replacing formal hierarchies with smaller, more flexible, agile teams. Giving employees greater autonomy and reducing the amount of top-down oversight required a leap of faith, but for many banks, the positive results have given them an incentive to continue exploring the possibilities that decentralizing and flattening the organization could create.

Reskilling

The skill requirements for the financial service industry have been rapidly evolving in recent years, but the pandemic accelerated the trend. Financial advisors who were used to in-person interactions had to learn to be digital-first virtually overnight. Staff had to step into new functions, whether to adapt to new circumstances or to pick up the slack of their absent colleagues. Add to this the fact that talent is scarce, and resignations are at an all-time high, and it becomes clear that reskilling is now crucial to the banking industry's survival.

Reskilling is both effective and cost-effective. McKinsey research shows that reskilling is 20% more cost-effective than hiring and firing, while Accenture points out that the "hidden workforce" in the U.S.—the 27 million people who have or could learn in-demand skills but are overlooked by their employers—is one of the most powerful ways of addressing the talent crunch.

Remote work

At a time when, financial institutions can't afford to leave talent on the table, the shift to remote work has helped these organizations to connect to a wider pool of talent. While some roles, especially those in the front office, still require on-site workers, banks are finding that many jobs can be performed remotely. FlexJobs saw remote job openings increase 12% from 2020 to 2021, with accounting and finance seeing notable growth in this area.

Competencies support the "new normal"

As credit unions and banks embrace the "three R's" to build a resilient workforce, competencies are helping them to ease the transition. Competencies define the knowledge, skills, and abilities required to perform a job successfully by defining these dimensions in terms of objective, observable behaviors. And because competencies are structured like building blocks: they help to reveal new ways in which talent can be deployed across the organization.

Here are some ways in which competencies can help financial institutions to make the most of scarce talent resources.

Visibility

Competencies make the organization's talent more visible by providing a deeper level of detail about how successful employees get the job done. And because every job in the organization is defined by its own competency profile, it's easier to see how employees' strengths match a wide range of job requirements. At a time when banks are faced with the need to quickly form cross-functional teams to tackle new projects, competencies make it easier to look beyond the roles that employees currently perform and see the underlying employee strengths that could enhance an agile team.

Mobility

When competencies are applied to every role in the organization, they provide a universal language for describing role requirements. This makes it much easier to see links and equivalencies between roles—even if those roles exist at different hierarchical levels or in other departments or business units. Competency-based career pathing supports career mobility and a more flexible redeployment of talent by replacing rigid, vertical career "ladders" with multi-path career "lattices" that employees can use to move vertically and laterally within or beyond a specific department or division.  

Culture

As credit unions and banks take advantage of remote working options to expand the hiring pool, they are also seeking ways to maintain a strong organizational culture. Less face-to-face time and fewer opportunities to gather around the water cooler can result in a sense of disconnect as workers are limited to absorbing the company culture through a computer screen. In these early days of remote work, employers are experimenting with different solutions, including annual in-person get-togethers and remote team events.

Establishing core competencies can also help to strengthen a company culture that is dispersed through remote-work situations. Core competencies identify the key values and strengths shared by everyone in the organization, regardless of the job they perform. By identifying the common denominators that characterize the company and its people, core competencies can create a sense of a culture that is distinct and a collective that operates in sync. And because competencies describe tangible and observable behaviors, they provide clear, concrete examples of how the company's workforce can embody the culture day to day.

Top competencies for credit unions and banks

During the early months of the pandemic, HRSG conducted an intensive analysis to determine which competencies were most critical to the banking industry. Using artificial intelligence and qualitative analysis of more than 50,000 job posts for positions in North American banks and credit unions, we identified the most in-demand universal competencies. Based on the results, "Client Focus," "Planning and Organizing," and "Fostering Communication" were the top three competencies that the financial industry was looking for in its employees.

Client Focus

Client focus involves providing service excellence to internal and/or external clients.

Despite, or perhaps because of, the shift to remote work, this competency, which supports the delivery of a better customer experience, was the number-one competency for bank employers. While it appeared in job descriptions for tellers and other front-line staff, it was also prevalent in operations, indicating that financial institutions recognize that every staff member plays a role in ensuring service excellence.  

Planning and Organizing

Planning and organizing involve reaching goals that are central to organizational success by making and following plans and allocating resources effectively.

As financial operations become more complex, with remote work presenting an additional wrinkle, the ability to plan and organize is more important than ever. This competency is the second most prevalent among banking jobs, appearing in diverse roles including compliance and fraud, collections, and investing.

Fostering Communication

Fostering communication involves listening and communicating openly, honestly, and respectfully with different audiences, promoting dialogue, and building consensus.

Fostering communication is number three on the list of top competencies for banking institutions. This competency is most prevalent among banking roles that involve dealing with potentially sensitive situations, with compliance and fraud and collections roles being most likely to require it.

Learn more

Learn more about the competencies that credit union and banking employers value most. Read The 10 Most In-Demand Competencies in the Banking Industry for a deeper dive into the data, including a full list of the top 10 most prevalent competencies.

Or find out how you can apply competencies to your talent lifecycle using CompetencyCore, an AI-powered platform for mapping competencies to organizational roles and using them to drive career pathing and development programs.