Tech and Talent in Financial Services

November 2022

Technology represents one of the greatest opportunities and threats to financial services.  It is the backbone of the industry. Good technology helps win and keep business, and it drives customer experience. Behind the scenes, businesses need to maintain and update administrative systems and, ideally, find efficiencies to improve operations. In addition, different technologies (from automation to accelerated underwriting) are radically changing the business. 

Strong talent is necessary to achieve these goals and run a successful business. At the same time, the technology talent environment is more challenging than it has ever been. Tech skills are in high demand. Competition is fierce, and financial services organizations are not only competing with one another — they also are competing with leading firms in other industries.   

In a recent discussion, Chief Technology Officers universally acknowledged that attracting and retaining talent is one of their greatest challenges. In a survey, every single one indicated turnover was up among all employee segments (entry-level, professional-level, executive, and diverse employees). According to one executive,  the best workers get multiple employment offers per day. Turnover has also increased for technology vendors.

Every technology discussion turns into a conversation about talent and recruiting.
        — Tech Executive

 As it seeks to attract and keep talent, the insurance industry faces specific challenges:

• Regulation — Insurance is a highly regulated industry. This can make work slower and more difficult than in other industries that do not have to function within the same level of oversight. Product development is slower. Companies face more risk and compliance requirements, which means they need to provide more training and education for employees.

• Outdated Language — The nomenclature the insurance industry uses in job descriptions may not reflect the current state of the technology industry.

• Legacy Systems — The insurance industry has the benefit of longevity, with many companies in existence for more than a century. However, this also means they likely have multiple legacy administrative systems. Many job seekers prefer to work with new technology. Working with older systems will not help them secure a position with a leading new technology provider in the future.

What Do Candidates Want?

It’s a candidate’s market, and they know it. Expectations have increased, and factors  that used to differentiate employers are now viewed as table stakes. Flexibility in terms of where and when people work is expected. New employees also look for:

• High salaries — Some executives mentioned candidates’ salary expectations are sometimes unrealistic. Expected compensation may not be commensurate with their skill level and background. Some companies are paying people above their skill level, and they liken today’s environment to the dot.com boom. Will a recession bring a salary “bust” and realignment of compensation?

• Placement on “hot” projects — Few new employees really want to work on maintenance or legacy systems. They are attracted to projects that are new and exciting or that teach them in-demand skills.

• An explicit career path and development plan — They want to feel valued and know their employers are invested in them and their growth. Many employees, particularly entry-level ones, also expect quick career progression, including frequent promotions and an impressive title. 

• Flexibility — Remote or hybrid work is an expectation. According to executives, not offering  these arrangements would lead to immediate turnover.

Strategies to Attract and Keep the Best Talent

How can employers manage these expectations and still acquire the talent they need?

• Bring executives into the recruiting and interview process early. An executive who takes the time to meet with candidates and talk about the organization makes an impression. It shows interest in candidates, it makes them feel important, and it lets them learn about the organization early. While this may seem counterintuitive, it can actually improve the ability to recruit.

• Focus on growing internal talent. Bring in entry-level developers and train them for a long-term career. Consider this an alternative to “off-the-shelf developers” who are hired for specific tasks or projects. Having a flexible team of in-house talent can pay big dividends. This leads to an expanded skill set and a greater depth of knowledge of company systems.

• Provide a “product team” versus “project team” atmosphere. Break down silos and have technology exist as part of the business, rather than the traditional process. This can make work more interesting and help technology workers better understand and appreciate the business. This could lead to more innovation and retention.

• Mix different work types in a role, if possible. Bringing together teams with different skills to solve problems is both appealing and valuable. It also helps people build different skills and work on a variety of projects. This gives them a familiarity with different parts of the business and a bigger network.

Ultimately, talent drives technology development and innovation. In a tech-enabled industry like financial services, that means having the best talent will ensure a long-term competitive advantage.