According to Investopedia, the finance sector is one of the most lucrative sectors to get into. There are many areas of specialization including mortgage, currency, and insurance.
But, it is a tough industry to get into. Candidates vying for lucrative positions must have a degree. To earn top salaries, you may also need advanced degrees.
So, you would think the industry would have no recruitment challenges right? After all, many people would be lining up to join. But that would not be further from the truth. HR managers must deal with issues like skill gaps and finding the right talent.
The market has become one where employers compete for employees. This is unlike the past when the reverse was true.
Our article takes a look at recruitment challenges for the finance industry. So which are they?
1. Finding the Right Talent
HR managers need to understand how to go about the process of finding the right talent. Proper assessment of potential candidates is not an option.
Total reliance on self-reported information is not enough. It helps to have the right recruitment strategies and tools to help with the process. Some companies are investing in AI recruiting platforms for various reasons.
Automation increases efficiency by taking care of mundane, and repetitive HR tasks. But there is a more critical function. Such software uses data to find the right candidates and match them with jobs.
Data-driven insights remove bias from the hiring process. The algorithms look at factors like experience, knowledge, and skill levels to find the right fit.
The finance industry needs to develop KPIs and clear objectives for each role. In that way, it becomes easier to find the right talent for the position.
2. Skill Gaps in the Finance Industry
Skill gaps are an issue that faces many sectors. Take the example of the software industry. HR managers take 50% longer to find the right talent. Translate it into time and we are looking at over 2 months of searching for skilled candidates.
The finance industry is also struggling with the issue. Skilled professionals are in such high demand that keeping them is very difficult.
Other companies lure them away with attractive remuneration packages. It places companies without financial might at a distinct disadvantage.
One reason for gaps in skill levels is new or emerging roles. We can thank technology for this. Blockchain, data science, software engineering, and AI technologies have come in. but, few colleges and universities offer such.
The companies have to invest in training employees on such skills. The other option is for the employees to self-train. It can be expensive and beyond their ability to foot the bills. Some companies may also not give them paid time off.
Until the industry catches up with the new skill requirements, the gap will persist.
3. The Challenge of Hiring Young Professionals
Hiring young professionals in the finance sector does have some challenges. A PWC report highlights some of them. Their motivations are very different. For them, it is more about making money than working for the good of the organization.
Millennials tend to be less loyal and will jump from one company to another if the offering is better. But, many have grown up using technology making them ideal candidates for companies that are adopters of such.
Take the example of corporate credit management services. These services focus on making sure that clients do not miss payments. There are quite a few technical processes involved like identifying risks, evaluating potential loss, and identifying risks of extending credit. Such jobs are data-driven requiring the use of systems or software to manage the tasks.
Millennials will find it easy to learn and use such technologies. Going through payment histories in customer databases or credit reports to determine creditworthiness will be easy.
But, the challenge remains. HR must crack the brief on how to recruit and retain such talent. And, it starts with understanding their mindsets, motivations, and attitudes.
The company must then adapt accordingly, which may require letting go of some of the previous recruiting methods.
4. Tedious Recruitment Processes
As we have stated in our earlier point, HR departments must reinvent their recruiting processes. Take the case of hiring young professionals. Face-to-face and lengthy interviews may not work. They prefer electronic modes of communication.
Millennials, for instance, prefer video interviews right from the comfort of their homes. For them, technology provides a way to achieve higher efficiency and productivity. Employees can leave if they still have to use manual processes.
An amazing 49% of candidates will turn down open positions if the experience during recruiting is poor. Lengthy processes and lack of prompt feedback create negative perceptions.
The advantage is automation exists to cut down on the length of time it takes to hire.
We have already talked about AI-powered recruitment software. The teams can reach a wider pool of candidates on various platforms. There is better targeting of candidates, resulting in higher quality candidates.
The HR can also keep engagement ongoing. It ensures candidates are up to date with the recruitment process at all times.
Factors like inclusivity and diversity are also important. Candidates ask for proof of such when deciding on whether to take on a job.
Financial services companies no longer have a choice but to incorporate such into their policies. The same will apply to any programs they have for employees.
The financial sector is not exempt from recruitment challenges. Finding the right talent with the relevant skills is an uphill task. The huge gaps mean a high demand for those with experience and knowledge.
Tedious recruitment processes are also an issue the HR teams must overcome. But, there is a technology that can provide solutions. AI-powered software brings in automation to increase efficiency.
The use of data helps identify the right talent without the element of bias. The technology also reduces the hiring time and makes the experience more pleasant. There is also greater accuracy in assessing candidates. It ensures the right fit between the job and the new hire.