It’s no doubt that the finance industry is one of the most competitive when it comes to hiring and retaining employees. In an already tight market, the skills gap is making it more difficult to find – and secure – the right candidate. So, how do we overcome the skills gap in the finance industry?
What is the “skills gap”?
Let’s begin by digging deeper into what the skills gap is. According to the Brookings Institution: “The term ‘skills gap’ describes a fundamental mismatch between the skills that employers rely upon in their employees and the skills that job seekers possess. This mismatch makes it difficult for individuals to find jobs and for employers to find appropriately trained workers.” A shape-shifting skills gap is being felt by 93% of employers in financial services. We are noticing a major gap between what employees need and what candidates can offer.
Why are finance companies experiencing a skills gap?
There are many reasons why finance companies are experiencing a disconnect between what employers need and what workers are trained to do. While financial technology (FinTech) continues to grow with startups and scale-ups, we are starting to notice skills shortages, particularly in this sector.
1. Lack of training and upskilling
Ten years ago, only approximately 50% of the CEOs of financial services companies saw skills shortages as a threat to their growth prospects. According to PwC’s 22nd Annual Global CEO Survey, it’s now 76%. This shortage of key skills is affecting everything a financial services organization does, including staffing, innovation and customer experience.
Companies can and should start to identify gaps within their workforce and invest in their employees. Employees should have opportunities for ongoing education, training programs and other learning prospects to be able to gain knowledge and fulfill the skills gap.
2. Changes and disruptions in the workforce
The pandemic itself has caused a big disruption in the workforce. From people who chose early retirement to those who left the workforce due to childcare issues and many other circumstances, the US economy is down 4 million jobs compared to pre-pandemic levels. (MSN) This poses a big issue in the financial industry with more reduced workers available for open positions.
3. Rapidly advancing technology
A Gartner study found that “the total number of skills required for a single job has been increasing by 10% year-over-year since 2017. Furthermore, one in three skills in an average 2017 job posting in IT, finance or sales are already obsolete.” As technology advances, finance firms have been struggling to keep up with these advancements and find candidates that will be able to take new processes and methods.
4. Being too strict with qualifications
We’ve all dealt with the frustrations of fitting all the qualifications for a role. Employers often have a ‘perfect’ candidate in mind which could lead to unrealistic expectations. Additionally, the financial sector can often overlook important skills such as soft skills and deny an applicant because they might not possess all the technical skills needed for the position.
How to overcome the skills gap in the finance industry
Avoid low productivity that results when you leave positions unfilled for long periods of time. Overcome the skills gap issue to avoid negative long-term effects such as high turnover, low morale and decreased inefficiency. Here are three important steps to take to ensure you are on the right path.
1. Conduct an analysis
In order to fix something, you need to look within your organization and assess the situation. Conduct an analysis within the company to identify where you are having trouble when it comes to hiring and what skills are needed and what skills your workforce already possesses.
2. Invest in training
Your employees will benefit from growth, and they will be able to move towards a more strategic part of the business. This is especially true when it comes to learning how to work with technology, working with AI and taking on machine learning. Additionally, providing these opportunities will only lead to employee satisfaction, increased productivity, and lower turnover.
3. Manage technological advancements
With many job functions becoming automated, many positions are being replaced. However, it’s important to allow your employee to learn how to advance with the technology and see where they can fill in the gaps when it comes to using these effective tools and functions.
4. Review recruiting strategy
It’s important to keep in mind that not every candidate will possess 100% of the skills that you are looking for – and that’s okay. Training and other opportunities can help with developing technical skills in any candidate.
5. Embrace innovation
If your company culture isn’t already, it’s important to be open and embrace the changes that are happening in the industry. Culture matters and the pandemic has shown us that workers are shifting their priorities to choose companies and professional environments that show them they matter. Give your employees the opportunities they seek to continue to grow and make your culture inclusive to attract and retain your employees and fill the gaps in the long run.
To further understand the skills gap and why it’s happening, download Roth Staffing’s latest eBook that has all the insights into the skills gap issue and what you can do about it. With the skills gap impacting nearly every employer, a staffing firm can be a helpful strategic partner. Roth Staffing’s nationwide team of well-networked recruiters has access to a broad range of candidates to find the perfect fit for you.
Looking for your next financial and accounting hire? Contact one of our Ledgent Finance and Accounting recruiters today!