In my role as a CEO of an up-and-coming fintech startup, I spend a lot of time talking to bank executives. In recent months, those conversations have often focused on a common pain point they are all feeling: hiring.
Many executives are struggling with hiring resources and adequate staffing. While the focus is often on salaries, I think the underlying problem is that a culture lacking an innovative spirit, evidenced by outdated technology, deters the new generation of applicants. Banks are not delivering a culture that fosters innovation, nor are they using or employing technology that applicants want in their daily job. Ultimately this leads to insufficient numbers of applicants; filling open positions is an ongoing struggle.
In contrast, open positions at our company typically get hundreds, if not thousands, of applicants for any opening. The question then is: Why is there more interest in a position at a “risky” startup than in an established financial institution?
Ultimately it comes down to one thing: employee satisfaction. Higher satisfaction is often correlated with successful and long-lasting teams; the lack thereof spells doom and high turnover. As millennial employees become the majority of the workforce, their preferences and desires are becoming a more prominent factor in evolving impressions of employee satisfaction. Ultimately it comes down to a few elements:
- Having a clear mission and ability to affect decisions that influence progress toward fulfilling the mission.
- Delivering a collaborative and innovative culture.
- Providing flexible work schedules and remote work possibilities.
- Encouraging and supporting personal development.
While banks incorporate some of the elements above, they often overlook the impact of technology and business models. Banks often use an outdated technology stack that, while painful for experienced employees, is perceived as utterly terrifying for younger generations who grew up using customer-centric apps and highly customizable digital experiences. In addition, the procedures for handling customers at these institutions are often highly scripted and regimented, allowing little room for variation and a personal touch. These factors can contribute to lower employee satisfaction and an annual turnover among frontline staff that has surged to 23.4% — its highest level since 2019, according to a 2022 compensation and benefits survey from Crowe LLP.
Nonetheless, bank executives rarely consider the impact the technology they make employees use has on that employee’s satisfaction at the company. This is something that definitely deserves more attention from the board and management, and should be one of the major factors when evaluating new technology.
Creating Employee Engagement
There are several elements that make new technologies more desirable to younger employees and that may increase their satisfaction. Improving these could lower your institution’s annual churn and benefit the bottom line.
- The user interface and user experience of your technology should be similar to that of popular consumer-facing apps. Familiarity requires less time training on how to use the technology and will increase affinity from the get-go.
- Basic capability features should also be similar to what consumer-facing apps offer. For example, communication and messaging apps should have features like the ability for customers and employees to seamlessly transfer and move between text to video.
- The technology should allow employees to access feedback and training in the same platform. This increases the platform’s transparency and timeliness of any feedback.
- The technology should allow for gradual deployment and a test/iterate approach. This collects feedback from a wider number of employees and can generate a greater sense of contribution.
Incorporating the employee’s experience to an already complicated technology acquisition process might sound daunting, but it’s important to remember that this change does not need to be comprehensive and instantaneous. Instead, it can be deployed in stages, allowing your employees and the whole organization time to deploy, observe and adopt. Gradual but consistent change will yield better long-term results for both your customer and employee satisfaction.
Institutions that embrace technology their employees want to use and allow for a culture of innovation and bottom-up input will lay the groundwork for higher employee satisfaction in the future, leading to less turnover and a better bottom line. Those banks that don’t will continue to struggle to attract and retain staff, while relying on pay hikes to close the gaps.