Breaking old hiring tactics in financial services is the #1 differentiator.
The banking industry needs to evolve, and at the heart of that evolution is fresh leadership to shake up the mold. That means it’s time for financial institutions to shake up their hiring methods and swim in a fresh pool of new talent.
Banking and financial organizations have an opportunity to introduce new methods of talent acquisition, ultimately jumping ahead of today’s competitors and tomorrow’s challengers. There is little doubt that financial institutions have reached a crossroads. As the industry begins its revolution to rebuild and reassemble itself, it also needs to take a new look at leadership.
Look back 25 years. The last time there was a significant infusion of new talent was a quarter of a century ago, back during the Cold War as the financial sector benefited immensely from a new wave of scientists, technologists and quantitative engineers creating entirely new products and businesses. The same, robust infusion of talent hasn’t occurred since, but an immense opportunity still lies before us.
In order for financial institutions to take full advantage of the talent surge, executives need to look outside traditional parameters to find fresh leaders of tomorrow.
Eliminating “Resume Box Checking”
Recently there has been an evident increase in cross-pollinating people from different industries, whether its entry through to senior leaders, CEOs and Board Directors. We’ll soon have four generations within the global workplace: next gens, millennials, gen X and traditionalists. This puts a greater emphasis on the importance of a strong organizational culture. Companies must now start transitioning away from the old models of “resume box checking” and thinking much more about how experiences, capabilities and personal journeys all match to create high performing teams. Though necessary, the common ways of evaluating job candidates – via resumes, interviews and references – provides only a small piece of the puzzle.
But there are other critical clues that make for great leaders, like the decisions someone has made and the unique paths they take. Are they agile thinkers? Do they run to or from challenges? Will they stick to a project until finding a solution, or will they give up? Focus should be on abilities and tendencies that will help address tomorrow’s challenges.
Evolve Your Talent Acquisition Strategy in 5 Steps
These steps will help to focused on your organizations talent of the future instead of the past:
- New View: Redefine what talent is and what it looks like (not just boxes to be checked), learn where and how to look for it, and understand how to attract it. Align talent to business value.
- Speed and Proactivity: Most companies tend to be slow moving, which can cause them to miss star performers who are in high demand. Be ready to act fast. A big part of this is moving from reactive to proactive talent management. Find, or create, opportunities to inject new types of talent.
- Take Smart Risks: Managers generally hire people who walk and talk like everyone else on the team. Be willing to “break the mold” and hire outside your comfort zone. Identify the leaders in your organization who will embody and enforce this, and provide them the tools to take the hiring bets they want to make.
- Mix Different Thinkers: Create ways to integrate people who think differently and to harness their full potential. Leverage existing talent to be the bridge across internal cultures. Allow “senior” and “star” to be defined differently than in the past – the only way to promotion and higher compensation should not only be leading bigger headcount.
- Be Open: Toss out past biases and concerns and seek solutions. Big firms need to work hard to remain competitive; smaller firms need to keep innovating and not become stale.
Advancing Banking Talent and Leadership
There isn’t a magic equation or one perfect solution to find this new leadership. There must be a marriage of financial content and experience with the new thinking and agility that will create of what banking will be in the future.
The cynics will argue that this new hiring method won’t work for regulated financial services, or that people would rather go to a technology firm than a bank. This is true in some cases, but it isn’t a sweeping reality. Telecommunications is also global, for example, but regulated on a regional level.
The key is to identify functions or businesses where attraction and qualification are more likely to use those as the entry points for new types of talent. Obvious examples include functions like technology, data, security, finance; and business groups like payments, fintech and retail banking. But this shift has also occurred in more traditional businesses. Insurance firms, investment management organizations and broad multi-national commercial banks are creating roles reporting directly to the CEO around functions such as strategy, operations and products with the explicit aim to hire from outside of the financial sector. They view hires as tomorrow’s leaders to teach the business, moving further into the organization after 18-24 months.
Today there is a real opportunity to change the talent paradigm – to change how you hire, how you think about talent, how you retain talent and how you develop talent. This is an incredible opportunity for the banks that are willing to be a little bit innovative, take some risks and really drive something forward to differentiate and shape the futures in their industry.
For more insights from Heidrick & Struggles on hiring and keeping talent, check out their LeadershipTV™ segment on Banking.com here.
David Boehmer is the Regional Managing Partner, Financial Services Practice at Heidrick & Struggles *Europe and Africa
Todd Taylor is a Partner, Banking – Financial Services Practice at Heidrick & Struggles *New York