Building the Next Gen in Financial Services
Posted by Rob Dicks and Linda Quaranto on June 1, 2012
Many financial institutions are in the midst of an all-out effort to redeem, refocus, reposition and generally remake themselves in the wake of the financial crisis and ensuing Dodd-Frank regulations (among others). While the topic of executive compensation has received much attention, the talent implications of industry reform reach far beyond the C-suite and far beyond compensation alone, rippling throughout the ranks of both front-office and back-office personnel.
It is clear that compensation is a driving issue for talent throughout firms, not only at the top of the organization, as many discussions suggest. Our work with clients indicates that even traditional back-office, non-revenue-generating positions, such as those in HR, IT, legal and corporate communications, for example, have historically been compensated at significantly higher levels than their peers in other industries — even two to three times higher when factoring in bonuses. Such pay was deemed essential to attract the high quality caliber of talent and to offset the extreme, often grueling, demands that came with a job in financial services. The allure of working in this industry was typically about making money. Period.
Now a new reality exists — many financial institutions cannot afford to compensate employees at the high levels of the past and compensation in the industry is expected to be tied more closely to revenue generation. This means compensation for back-office positions will likely be adjusted downward, more in line with other industries. As a result, the value proposition for financial services employees has to change—if the job is no longer all about the money, what can the industry do to attract the talent it needs? How can financial institutions overcome recent turmoil and negative publicity and remake themselves as employers of choice? How do the jobs themselves change?
We are working with our clients to help them address these issues holistically and with the long-term perspective of building the next generation of financial services. Part of the effort is to understand what other factors, besides compensation, can realistically be used to continue to attract the best and brightest talent. Will factors such as leadership development opportunities, work-life balance, global and career mobility and a stimulating work environment with the chance to work with and learn from really smart people be enough? Other industries have been working to attract and retain talent using these levers for years, so financial institutions have some catching up to do and a significant hurdle to overcome to make the cultural and mind-set shift necessary to fundamentally change the way they operate.
This is an issue of operating model redesign and talent management, including the need for business-driven HR—the topics that are top of mind for HR practitioners in various industries. Stay tuned as we share more about our work in the financial services industry, the results of our ongoing research and the industry’s progress in meeting its challenges in upcoming HR Times posts.
||Rob Dicks is a principal in Deloitte Consulting LLP’s Sales Effectiveness practice. He focuses in the financial services industry, working with firms to achieve their business goals through the use of innovative human capital and sales force effectiveness programs.
||Linda Quaranto is a director in the Deloitte Consulting LLP’s U.S. Financial Services practice, assisting clients with their Human Resources transformation and talent requirements. She leads the Human Capital Securities practice..
As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
Posted by deloitteus on February 13, 2013