Strategies to Combat Talent Shortages

As we continue to hear stories of businesses struggling to find and retain talent, it's becoming clear that this is the new normal. Many long-time employees retired en masse during the pandemic, leaving banks and other businesses struggling to attract new talent to fill those gaps.

Various factors have been discussed as the cause—the general shift in the workforce, systemic issues with corporate structures, and younger generations rejecting the traditional corporate environments in favor of gig work, remote work, and other nontraditional setups. Regardless of the reasons, banks face the challenge of making banking an attractive career choice for younger generations.

Industry discussions have highlighted that one significant pain point is the banking sector not keeping pace with the changing workforce dynamics. There seems to be less allegiance to any one type of industry. We continue to hear stories of people leaving banks for jobs at factories or restaurants. One startling example involved an operations employee leaving because Chipotle was offering higher wages. While the pay discrepancy is cause for concern, it highlights the broader issue of the industry’s struggle to meet the modern workforce’s demands and expectations.

Positions critical to bank operations, such as credit analysts and loan assistants, remain unfilled due to a lack of interest from job seekers. This scarcity is worsened by outdated practices and technologies that fail to meet the expectations of a digitally savvy workforce. Reliance on antiquated systems not only hinders operational efficiency but also diminishes the appeal of banking as a dynamic and forward-thinking career path.

So, what is the path forward? What can banks do?

1. Update Systems and Processes: Embrace technology to make jobs more meaningful, reduce unnecessary manual tasks, and use talent more wisely.
2. Automation: Implement automation and technology that will enable the bank to do more with less. Reduce the amount of FTEs needed will help lighten the burden of attracting talent.
3. Reevaluate Competitive Strategies: Consider new ways to compete with modern expectations and demands, making banking a more fulfilling and worthwhile career path for younger generations.
   
   

Changing compensation and other factors is not always an option. In instances like these, sometimes the best strategy is to find ways to increase efficiency without adding FTEs and to implement repeatable processes that can be taught to anyone.

In community banking, the departure of an employee often results in a significant loss of institutional knowledge, a difficulty amplified by reliance on outdated processes and systems. Investing in automating and standardizing procedures will minimize this risk and aid in training new employees. Instead of only one person who’s worked at the bank for twenty years knowing how to do a certain process, like a loan file maintenance, by automating that process anyone will be able to complete the process and you’ll have peace of mind that it’s done consistently and accurately regardless of staff changes.

Using technology to optimize these processes also allows banks to reallocate human resources to more strategic, advanced activities. By automating routine tasks, banks can free up their workforce to focus on areas that require human insight and creativity, thus improving job satisfaction and engagement.

Some banks have turned to outsourcing to manage costs and access talent in lower-wage areas. While outsourcing can be a practical short-term solution, the long-term focus should be on building a solid foundation for efficient operations. Improving internal processes and adopting automated systems can alleviate the burden of limited talent and allow you to keep everything in-house.

A strategy that addresses technological innovation, process optimization, and a clear commitment to employee development is key. The industry’s talent shortages are challenging, but with the right approach, banks can continue to thrive despite the obstacles.