Studies have shown that as many as half of jobs in the financial sector could be lost to Artificial Intelligence (AI). Other sectors, such as technology, offer a real alternative to talented candidates. Against this backdrop, the question that many leaders in financial firms are now asking is: How can we attract and recruit top candidates, now that we’re competing for talent with many more industries?
To answer this, McLagan—a part of Aon’s rewards and performance practice delivering expertise to financial services firms around the world—conducted a survey of the talent management practices at 265 financial services firms.
Its report, the McLagan Talent Pulse, highlights the three biggest HR challenges in the industry:
Retention of key talent
Firms are focusing on retaining their key talent by improving their performance management processes and fostering a culture that more closely aligns with their strategic priorities. However, attracting talented performers—and getting recruitment right the first time—is proving more difficult. And while talent sourcing and selection are high priorities for many firms, only 47% of those surveyed use any formal assessment tools for hiring.
How can the right assessment tools help overcome these challenges?
The science of assessment has developed incredibly quickly in the last few years, and static employee tests developed decades ago have been replaced with adaptive assessments which offer a distinct competitive edge. The most effective tools predict critical outcomes such as performance, engagement, values fit, and retention. They can also improve the speed and efficiency of your hiring process.
What’s more, it’s not just the type of assessment that’s changed but also how assessments are offered to candidates.
1. Going mobile
Of the firms that utilise assessments for hiring, only 7% are using mobile assessments. This is a significant gap, given that mobile phones are not just indispensable aids that have become a fundamental part of our lives. For millennials, their phone is central to their lifestyle, much more so than their laptop.
This is relevant because, according to PwC, millennials will make up 50% of your workforce by 2020. You need to attract, recruit, and retain them—so unless you’re equipped to enable talented candidates to take assessments via their phones, particularly in high volume recruitment situations, you risk losing them to competitors, especially the technology companies that often top graduate job lists.
Assessment is not only about finding the best talent, it can also help you to identify new skills that haven’t been focused on before. Roles in financial services firms are evolving and so are the skills needed to fulfil them. Advances such as robo-advisors/chatbots and automated tellers are beginning to have an impact on both consumers and how we work.
2. Recruitment can no longer be left to the ‘gut feel’ of your hiring managers.
While there are different opinions on the pace of automation, there is little disagreement on the impact it will have on the workforce. Tomorrow’s talent will need to embrace technology, collaborate with others and work effectively in a modern, digital environment. This means that financial services firms will need to assess specific digital competencies, including learnability, agility and curiosity.
This demands a methodical approach. Recruitment can no longer be left to the ‘gut feel’ of your hiring managers. If you’re not using assessments in your selection, you should rectify this. If you do already use assessments, review your portfolio to ensure your tools are providing a nuanced picture of each candidate’s personality, behaviour, work style, and ability.
The latest options include gamified assessments, video assessments, and mobile enablement. Aim to impress your candidates with a slick and easy assessment experience. You can measure the ROI of your assessments—and create useful talent analytics—by linking an individual’s assessment results to his/her subsequent performance in the role.
3. Identifying leaders
Assessments can also help you to develop your existing leaders and select internal candidates for succession planning. The risks of dysfunctional leadership are not just bad publicity and damaged brands, but real monetary costs. Succession planning is about business continuity and mitigating organisational risk. But in many financial services firms, leadership development is either non-existent or an exercise in box-ticking.
Less than half of McLagan’s surveyed firms formally manage succession, and most do not complement their leadership development programmes with talent assessments that can identify any gaps in the desired skills and traits.
Building a ready pool of future leaders will reduce the risk of critical positions going unfilled. However, caution needs to be applied here. What makes someone successful in one role does not necessarily translate to the next rung up the leadership ladder. So you need to be clear on what specific competencies and qualities you want to assess.
In today’s organisations, assessment now has a value beyond recruitment. It’s not just about maximising the person-job match and minimising the risk of early attrition or the expense of making a bad hire. Assessments—and the data it captures—can transform your talent management practices and resolve your top HR challenges.
This article first appeared in Personnel Today on 30 August 2018.
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