The Josh Bersin Company, the world’s most trusted human capital advisory firm, has revealed alarming evidence of a rapid decline in tech talent across the consumer banking sector.
Of the 7,300 tech roles that consumer banks attracted from tech companies, a staggering 7,100 technologists migrated to the technology industry. The findings indicate that the vast majority of institutions face challenges in both attracting and retaining crucial next-generation tech and digital skills.
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Based on data from the Lightcast labor analytics platform and an expansion of the ongoing Josh Bersin Company Global Workforce Intelligence (GWI) Project financial services industry study, the data shows attrition occurred despite the significant effort banks invested in recruiting for those roles in the first place.
Worryingly for the sector, consumer banks typically post details for high-caliber tech roles on as many as 16 job sites before successfully filling a position. The turnover points to a problem more complex than hiring process gaps; consumer banks need to focus on both hiring and employee retention strategies in order to acquire the tech talent needed to remain competitive.
The concerning insights come from the first in a series of labor market analysis of the consumer banking industry in the United States, conducted by The Josh Bersin Company in partnership with global labor market analytics leader, Lightcast.
Lightcast has an unparalleled database of more than 1 billion current and historical job postings and career profiles, collected daily from more than 50,000 online sources. Augmented with data from government sources, such as the U.S. Census Bureau, the Bureau of Economic Analysis, and the Bureau of Labor Statistics the data gives a complete view of the workforce. This research was further analyzed with findings from the broader Global Workforce Intelligence (GWI) research being conducted on the Eightfold.AI’s Talent Intelligence Platform.
The research suggests that banks may not be approaching talent acquisition, development, and retention in a systemic way. Consequently, new hires may experience feelings of being undervalued, lacking direction, and lacking a sense of purpose. As a result, these individuals soon leave for adjacent sectors where they believe they have a better chance of personal and professional growth.
The Josh Bersin Company’s deeper analysis of the type of tech skills that banks are looking to hire reveals that these roles do not offer sustainable careers, salary progression, or relevant opportunities for onward development. This in turn threatens the retention rate of tech professionals in consumer banking–and points to the importance of “systemic” HR: looking at talent acquisition in a wider context, and not as a siloed activity.
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In sum, the banking tech talent crisis is impeding vital service innovation and is compounding the woes of an industry that is already challenged by soaring interest rates as well as market reinvention.
Stella Ioannidou, The Josh Bersin Company Research Director, said:
“Technology professionals are now as important to banks as finance experts. This surprising data shows that CEOs and CHROs in the banking industry have to rethink their value proposition to attract and retain these important professionals.”
Janet Mertens, The Josh Bersin Company Senior Vice President of Research, said:
“The data clearly shows that recruitment alone will not solve this problem. CHROs and senior leaders have to embark on systemic HR solutions that look at the four Rs: recruiting, retention, reskilling, and job redesign. Just as healthcare companies cannot function without nurses, banks can no longer function without top tech talent.”
Josh Bersin, global HR research analyst and CEO of The Josh Bersin Company, said:
“Technology workers are very savvy about ‘salary-boosting jobs’ that let them work on advanced technology. Consumer banks, which have massive legacy systems, have to step up their game by investing in skills development, internal mobility, and leading-edge tech projects or they will continue to lose top talent.”
The recently conducted deep-dive analysis by Lightcast for The Josh Bersin Company is for a new series of companion reports to complement the main industry spotlights from the major ongoing Global Workforce Intelligence (GWI) research project. These companion reports, the Labor Market Insights Series, drill deeper into the scale of the talent crisis in a given sector and present systemic solutions to address the most pressing challenges.
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