Banks Struggle to Retain Young Talent Amidst Competitive Job Market, According to Crowe Bank Compensation and Benefits Survey
While the Great Resignation phenomenon appears to have calmed down, the latest edition of the Crowe Bank Compensation and Benefits Survey reveals that banks are still facing challenges in retaining younger talent. The survey, which includes data from 388 financial service organizations, shows that nearly 65% of respondents find it somewhat or very challenging to remain competitive among the younger workforce population. Additionally, officer-level turnover has increased for the second consecutive year, rising from three per cent in 2021 to over six per cent in 2023.
The Crowe report covers various aspects of compensation and benefits, including information on incentives, director compensation, and current trends in human capital management practices. It also provides salary and bonus benchmarks for 272 job positions.
John Epperson, the managing principal of financial services at Crowe, emphasizes the impact of a competitive job market on talent evaluation. He states, “Banks aren’t only competing for talent within their own industry anymore, but also against organizations and industries that may offer more entrepreneurial experiences, flexibility, and nontraditional arrangements.”
To address these concerns, banks have started taking action. The survey reveals that 70% of banks now allow one or more days of remote work per week, compared to 52% last year. Furthermore, nearly 11% of respondents express the willingness to hire fully remote positions in certain areas.
Stephanie White, a financial services consulting senior manager at Crowe, explains that banks are dealing with a generation of employees that prioritize freedom and mobility. She highlights the growing adoption of hybrid work as evidence that the traditionally rigid banking industry is becoming more open to change.
Epperson also suggests that macroeconomic trends, such as industry convergence, are reshaping the financial services sector. As banks seek to stay relevant, they are exploring new solutions and business models that offer value to customers in unconventional ways. This shift is creating new roles and opportunities within banks, potentially attracting younger talent that was previously drawn to technology-focused organizations and industries for innovative opportunities.
According to the Crowe survey, the leading factors contributing to turnover in banks are lack of career development (45%) and inadequate total compensation (42%). While there were significant pay increases across various industries last year, including financial services, the data indicates that these increases are starting to normalize to pre-pandemic levels in the banking industry. In 2023, employees who met performance expectations received an average salary increase of 4.5%, compared to 8.5% last year.
The survey also highlights specific roles that experienced the highest percentage pay increases from 2022 to 2023, such as teller positions (2.4%-9%, varying by level), teller operations supervisor (14%), and item processing (nine per cent). Epperson notes that employees in this salary range have alternative career options outside of financial services organizations that may offer less responsibility and more flexibility.
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