As baby boomers retire and Generation X enters middle age, it’s not surprising that top executives and boards are turning an eye more aggressively toward seeding their banks for the future. But, when it comes to recruiting and retaining younger people, banks have a bit of a public relations problem.
Unlike their practical baby boomer or money-motivated Gen X predecessors, the constituents of Generation Y-born between 1979 and 1998, give or take a year or two-are by most accounts more adaptable and better educated than generations before them. But unlike their parents and grandparents, these idealistic late teens, 20-somethings, and early 30-somethings do not necessarily appreciate what banks have to offer as an employee or even as a customer. In fact, according to studies, the typical millennial may not even see traditional banks as necessary.
Case in point: A three-year study released in early 2014 from Scratch, an in-house unit of Viacom, found that one-third of millennials believe they won’t need a bank at all in the future, and 71 percent would rather go to the dentist than listen to what banks are saying. (Not surprisingly, the same survey found that nearly three-quarters of respondents would be more excited about banking options with technology companies like Google, Amazon, Apple, PayPal or Square than from a conventional bank.) The survey discovered that four of the 10 brands least liked by this demographic were big banks: JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co., and Citigroup.
As one might imagine, this can make a career in banking a tough sell for the best and brightest of this up-and-coming cohort. Many millennial-age people entering the workforce associate banks strongly with the most recent recession, and believe all financial institutions to be spurred by greed. Also, growing up with the Internet, they have been exposed far more than previous generations to the poverty and inequality that exist in other parts of the world, as well as some areas of the United States, and they want to do something about it. “Millennials want to know they are joining an organization where they can make a difference,” says Brian Fishel, head of talent management and acquisition at Cleveland’s $93 billion asset KeyBank. “We help our communities thrive by giving them access to capital. By connecting this mission to the roles that we have at KeyBank, it is appealing for millennials.”
And appeal to them they must. Banks cannot ignore the emerging generation of potential executives and leaders, especially since by 2025, they may make up as much as 75 percent of the workforce, according to a 2014 report from the Brookings Institute, “How Millennials Could Upend Wall Street and Corporate America.” Getting Gen Y employees on board, in key positions, is probably the best way to ensure connecting with millennial customers. (There are about 84 million millennials.)
The Cleveland-based bank hosts an annual “Women in Corporate and Investment Banking Conference,” which brings together women from 18 universities across the country, and a campus summit, where dozens of top students from leading universities join to discuss career paths and leadership development at Key. KeyBank has also partnered with Ohio State University’s Fisher College of Business Office of Minority Student Services. As part of that, MBA teams from across the country head to Cleveland each February for a weekend-long case study competition and to meet Key’s executives, past MBA hires, and the bank’s recruiting team. “While the objective of this event isn’t to recruit talent into Key, many participants get exposure to Key who may not otherwise have thought about coming to work at a regional bank,” Fishel adds.
However, working on a broader scale, exactly how can banks crack this nut-improving their brand with and appealing to the rising stars of the new generation of workers enough to not only get them in the door, but retain them through their career lives? Millennials want to work for organizations that are focused on their people and purpose, not just what they’re selling and how much money is being made, according to Deloitte’s fourth annual Millennial Survey, released earlier this year. A full one-third of the 7,800 global millennial respondents to the Deloitte survey said that they were most attracted to the technology, media and telecommunications sector because they believed leadership is strongest there. (Technology, media and telecom got four times the positive interest of third-ranked banking and financial services.)
“The message is clear: When looking at their career goals, today’s millennials are just as interested in how a business develops its people and how it contributes to society as they are in its products and profits,” Barry Salzberg, CEO of Deloitte Global, says in a release that accompanied the study.
Since millennials often want to know they are joining an organization where they can make a difference, many banks are upping their commitment to (and their publicity of) community outreach and improvement campaigns, as well as other charitable endeavors. Cincinnati-based Fifth Third Bank donates money on behalf of customers to the Stand Up To Cancer initiative, which carries a lot of weight with concerned 20-somethings who care about doing good as much as they care about doing well.
This lines up with the National Society of High School Scholars most recent annual career survey, which also reported that their members were most interested in working for St. Jude Children’s Research Hospital, The Walt Disney Company, their local hospital, Google and Apple. Also, about seven out of 10 respondents agreed that perhaps the most important factor in choosing an employer was whether the company encourages work-life balance, and about half of them ranked workplace diversity as being important to their decision as well.
When it comes to actually connecting with millennials (read: marketing the bank’s opportunities and recruiting prospective managers), it may come as a surprise that the much-vaunted social networking sites that millennials frequent are not always the best spots to engage prospects. While a whopping nine out of 10 Gen Y job hunters prefer to be contacted about employment opportunities by email, another 61 percent cite in-person referrals such as career fairs or personal contacts, and 43 percent would be glad for a phone call, according to the annual NSHSS career survey. Meanwhile, only 19 percent would opt to be contacted through LinkedIn and 25 percent would opt for Facebook or Twitter.
A key part of retaining top millennial talent is to keep them engaged in the process and let them know their voices are heard, according to Valerie F. Lancelle, vice president of U.S. Bank’s innovation group. Since 2009, the Minneapolis-based bank has been spearheading its own so-called “Dynamic Dozen initiative,” where members of the managing committee select millennial employees to represent their respective business line in a year-long program that includes panels for input on company products and initiatives and professional development activities. Insights from this group have influenced a variety of initiatives at U.S. Bank, including the bank’s strategic plan for offering mobile banking services and various career development programs. Members of the Dynamic Dozen have also participated in focus groups to help the bank better understand how to enlist Gen Ys as both employees and customers.
“Beyond their contributions during the Dynamic Dozen program, these millennial employees also bring their leadership experiences and ideas back to their business line,” Lancelle says. “In that way, their influence extends well beyond the program.”