The financial services industry has undergone seismic shifts in recent years, from pandemic-driven changes to remote workforces and economic turmoil to increased emphasis on employee diversity. Financial services HR departments have their hands full as they navigate these unprecedented challenges while striving to ensure employees are kept up-to-date with rapidly evolving markets and technology. Financial services are also notably one of the most important drivers of economic growth and stability and employ millions of people in different roles — from front-line customer service to back-office data entry. Banks, investment banks, and insurance companies (among other financial services) are complex and require various technical and human skills for these roles.
Despite this complexity, they have traditionally been managed with little understanding or insight into their workforce, relying on outdated HR systems and manual processes which do not capture the nuances of people’s performance.
To successfully meet the demand for continual reskilling, many finance companies are investing in data visualization and people analytics software to navigate the skills gap, a hybrid work environment, and an ever-changing economic landscape.
HR in the World of Finance
With the financial industry's pivotal role in steering our economic system, it is of paramount importance to consider HR. Unlike other industries where land, capital, and enterprise are commonly found as equal players alongside labor; within the financial space, there is an outsized reliance on its workforce whether trading, consulting, or selling. This fact has made effective HR work vital in seeing these organizations thrive.
By connecting with employees at all levels, from executive board members right through to senior managers (along with those “backstage” workers who ensure things run smoothly), HR ensures efficient working operations necessary for success today and into tomorrow.
In general, the most successful companies will be ones that are employees-centric. This means even greater pressure on HR departments. In fact, a recent survey revealed that 64% expect more strain due to increased hybrid work environments, with 18% expecting a significant increase in their workload. As such, people analytics in finance will be a priority for many companies in 2023 and beyond.
Hearing From Your Knowledge Workers at Scale
A Workplace Culture 2018 report found that 71% of professionals say they would be willing to take a pay cut to work for a company that has a mission they believe in and shared values. In addition, 70% of U.S. workers would not work at a company if they had to tolerate a negative workplace culture.
Financial services people analytics provides an opportunity for organizations to gain meaningful insights into their workforce. It allows them to understand how their employees work best and how they can improve engagement levels to drive business performance.
People analytics in finance can provide insights into employee performance, engagement levels, and attrition rates, allowing companies to predict how best to deploy their staff to achieve desired outcomes.
Identify Burnout and Avoiding Costly Attrition
People analytics in the finance services industry is also helping organizations understand their workforce better, enabling them to identify potential burnout risks and intervene before it’s too late. By identifying struggling employees or those at risk of leaving, these firms can take preventative measures such as providing additional support or re-orienting tasks to help avoid costly attrition.
Manage Resources and Improve Business Outcomes
Financial services companies often have high revenue per employeeaverages due to the complexity of their operations and the specialized skillsets required to perform them. Financial institutions such as banks, investment bankers, and insurance companies require a wide range of technical and human skills to function properly. Financial services are also expensive for customers, meaning that these firms can charge more for their services than other industries. This allows these firms to generate higher revenues from fewer employees than other sectors. Therefore, attrition is more closely related to Business Outcomes than other industries.
We’re also under pressure to ensure that our business is fair and equitable. As our industry tends to be more regulated having diversity metrics had hand and even tracking them ensures that we’re hitting the mark.
That is exactly why we see so many financial services industries maturing in people analytics faster. I believe this is because they can easily see how this makes them more competitive and improve their bottom line.
Nurturing Employee Knowledge and Skills
People analytics can also play an important role in helping financial services organizations nurture the knowledge of their employees and ensure they are performing at their peak. By layering talent profiles, learning development metrics and employee backgrounds, firms can create and monitor targeted training programs and development plans to ensure that teams have the right skillsets to meet the ever-evolving demands of the industry. They can even compare trained employees to untrained employees and see how the segments are performing!
Finding Top Performers and Improving Retention Strategies
Bank HR, in particular, has a great deal to gain from financial services people analytics, as it can be used to identify potential high-performers and groom them for critical roles in the organization. Everyone should have a succession plan. Furthermore, banks can use predictive modeling to identify employees that are at risk of leaving or being poached by competitors, allowing the institution to intervene quickly with retention strategies.
Analyzing Data to Understand Customer Experience
People analytics can also help finance companies better understand the customer experience by allowing them to correlate employee performance with customer satisfaction. By analyzing data from customer feedback surveys, organizations can identify areas where customers may not be receiving the best service or areas where further staff training might be beneficial.
Leveraging HR in the Finance Industry
Overall, people analytics provides financial services organizations with a new way to gain insights into their workforce, allowing them to make more informed decisions about how best to utilize their resources and improve overall business outcomes. This helps promote a culture of collaboration and innovation within the organization, as well as providing valuable data to inform decisions about talent acquisition, promotion, and succession planning.
By leveraging people analytics strategically, firms can ensure their workforce is able to meet the challenges and opportunities of their dynamic markets.