Thought Leadership
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Financial services firms are facing a trifecta of staffing challenges. Right now, 89% of finance and accounting managers say they can’t find applicants with required skills. Within 10 years, the industry will hit a retirement cliff whereby an estimated one-third of financial advisors will leave the profession, per Cerulli Associates. (And, those retirees manage roughly $10.4 trillion or about 40% of total industry assets.) Add to that other “known unknowns,” such as generative AI and machine learning technologies that transform human-led work, like the processing of financial data, and upend job requirements.
We in the industry recognize careers in financial services have many advantages: good pay, interesting work, career mobility. So why are firms having trouble hiring? Certainly the tight labor market plays a part. Also, since the pandemic, people have changed what they want from a job and career. At the heart of it though, firms are trying to apply old ways to deal with these newer challenges instead of figuring out how to hire from the existing employee pool, not the one they hope exists.
Before joining Kaplan in 2021, I spent 15 years in financial services. The ‘traditional’ career route usually meant getting a degree, passing the Securities Industry Essentials (SIE) test, and then starting in an entry-level position in a call center helping customers update their beneficiary designations or selling mutual funds.
A new approach would focus on skills and multiple, non-traditional pathways rather than degrees and pedigrees. What might that look like? AdvisorEngine, a fintech company, shares the stories of Mike, a former chef, and Jessica, a former accountant, who now work as financial advisors. Mike was able to translate his experiences serving and advising people into his new role. In Jessica’s case, additional training helped her parlay her acumen with numbers in a new direction.
How can firms shift from the 'traditional’ route, to hiring that brings in more Mikes and Jessicas?
Amidst rising higher education costs and the hot job market, fewer high school graduates are opting for college and are instead going straight into the workforce. But the lack of a college degree can preclude talented prospects from consideration for certain roles. The good news is that some employers are loosening their educational requirements. Industry leaders like Bank of America have dropped degree requirements for many positions, focusing instead on a skills-based hiring approach. In this environment, work history, assessments, and skills certifications become increasingly important. This helps expand the job pool beyond ‘traditional’ candidates, from the ‘usual’ schools and buttresses employers’ efforts to diversify their workforces
Employees are looking for employers to help them develop on a career path; 83% of workers in a recent poll believe employers should be investing in their continued education and the majority will feel greater loyalty and job satisfaction. Education-as-a-benefit programs can expand development opportunities at every stage of the pipeline and support early-career employees who are preparing to take the SIE, Series 6, and Series 7 exams.
Let’s go bolder: employers should actively recruit talent with just high school diplomas to sit for the SIE, assisting these candidates to prep for the exam. Firms will attract talent with the promise of greater education opportunities alongside their financial exams, including certificates, undergraduate and graduate degrees, and help rebrand the industry as one of great promise for someone's future. While bold, this idea is not new: for many years, entry-level jobs on Wall Street launched the careers of many working-class high school grads.
IDEAS IN ACTION: Junior Achievement, a nonprofit that helps young people under 25 learn about and prepare for careers, has partnered with Kaplan to offer the Securities Industry Essentials (SIE) credential program to high school students. Participating employers benefit by getting access to local, work-ready job candidates, reduced recruiting and retention costs, and lower in-house training costs.
Hiring non-traditionally is about more than just demography. It’s also about geography. When the pandemic forced an industry-wide experiment with fully or partially remote working situations, firms learned how to run successfully with geographically dispersed workforces and recruit beyond their usual office locations. Many employees also learned that they liked hybrid working arrangements, and wanted to keep them—especially younger workers that firms seek to fill entry-level positions. Many companies are facing pushback to strict return-to-office mandates; for example, a new study by Deloitte reports that 66% of financial executives surveyed, who worked remotely part time, said they would likely quit if ordered to return to the office five days a week. It’s time firms adapt legacy onboarding, training, and engagement practices to the new hybrid workplace reality. The payoff will be broader---and more diverse---geographically dispersed candidate pools.
My team at Kaplan works with large and medium financial services firms. We see how careers in this industry offer so many advantages and workers ought to be clamoring to get in. Many of these potential hires have the will to apply but may not fit the traditional mold. With changes in policy and a will to adapt, financial services firms can tackle staffing challenges, fill positions and continue growing.
Kevin Koziol is a segment sales director on the corporate learning solutions team at Kaplan. Connect with Kevin to discuss Kaplan’s work with financial services institutions to create new pathways to meaningful careers.
