I’d say that I have some version of this conversation with my clients at least once a week. The reality is that it is getting harder and harder to meet the demand for strong bankers who have a well-rounded skillset of credit, sales, and communication, and a strong book of business. Let’s examine why, and explore some ideas on what to do about the issue.
Financial Services organizations, particularly in banking, lost popularity during the financial crisis of 2008 and the challenging economic years that followed. Many newly qualified college graduates were frankly not interested in pursuing careers in the industry. Fast forward to current, and there are fewer young, up and coming bankers in the market. These candidates have been increasingly in demand as the economy has improved and banks have continued to expand.
Additionally, many bankers under 40 (ish) were NOT given the opportunity to participate in formal training programs as many who came before them, and have been forced to ‘piece meal’ their training during their careers. I hear regularly from clients that today’s younger bankers do not have the same training (particularly credit) as their predecessors.
What can we do about this issue? In my opinion, there are both short-term and long-term strategies to mitigate this issue. In the short-term, banks need good talent to drive and support growth. In the long term, however, the industry must adjust to attract, train and retain good people.
Let’s start with short-term:
- Differentiate your bank and your culture. This is not just for your clients and prospects, but also for recruitment of new employees. Benefits, flexibility of schedule, training, stability, work environment and compensation are all factors to consider.
- Cultivate relationships with bankers you want to hire. Keep a list. Take them to lunch. Get to know the people and their motivators.
- Be prepared when opportunity knocks. This is not really an environment where you can budget to add a banker in Q3 and start recruiting in July. The best policy is to keep an open door for good people and, if possible, be ready when the right person reaches that tipping point.
Some other near-term options that could work depending on your circumstances:
- Go Out-of-Market: An option that may work for some banks is to go out of market for talent. Particularly if you are in a market like Asheville, Charleston, or Greenville, SC which may be appealing to Gen Z or Millennials. While you do not get the market knowledge, you could potentially get someone who has the skillset and is motivated to move and become ingrained in a particular community. This is a more difficult option if you need someone to build a book from ‘zero’ with limited ramp time.
- Other Industries: Attributes of a good banker include attention to detail, the ability to build relationships, discipline, problem solving, and good communication. What other types of industries/jobs require these skills and is there one that might yield some strong candidates?
- Train and Retain: Many larger banks already have strong recruiting programs in place for MBA or Masters in Finance/Accounting students at universities with well-reputed business schools. If you don’t have a strong training program in place for new or early-career bankers, consider developing (and marketing) a program that is designed to elevate young, talented bankers to the next level. Leverage this for current employees and external candidates. I know it can be expensive, but consider that again the cost of not having the right people on your team. The reality is that your best bankers in the long run might be those you train and develop, and the pipeline for external options is not necessarily going to grow in the next several years. Bottom line, be prepared to invest in the long-term future of your bank, not just for next year’s production.
To sum it up, you should really have both short and long-term strategies to attack this challenge. If industry players can all pull together on this issue, perhaps we fix can it over the next 5-10 years, ensuring the next set of strong bankers for our clients!