Millennials pose a staffing challenge for investment banks
Most are relying on an ageing workforce that will need to be replaced
The C-suites of investment banks are increasingly facing a new hiring challenge: the people they sought to hire in the past don’t necessarily want to work for them. And the types of people they may need to hire in the future are different.
Consider the first point – millennials have a different view towards wealth and work than previous generations. As with other industries, most banks are currently relying on an ageing workforce that will need to be replaced with millennials whose early career goals often do not align with the business models of banks. Accenture research shows that among MBA graduates from two top US business schools – the University of Pennsylvania and Columbia University (both of which have historically had a strong finance focus) – investment banking as a career choice fell by nearly 50 per cent between 2008 and 2014. During that same period, the percentage of MBA graduates who chose careers in the technology industry tripled.
Meanwhile, tech-savvy employees are precisely who banks need to attract. For example, the traders of tomorrow will be responsible for supervising largely automated trading activity, overseeing asset liability management and maintaining client relationships. As self-service trading continues to grow in popularity, the need for specialised traders is expected to decline. Equity traders will need to become proficient in dealing with related derivatives, and those trading corporate bonds will require expertise in municipal bonds.
Significant change is expected in technology workforces too. As the lines between information technology and the front office blur, the front office will need to develop skills in analytics, machine learning, electronic trading and alternative messaging protocols. The number of commodity IT roles will decline in favour of cloud computing, but new IT roles will emerge in service integration, and cloud and client relationship management – roles where softer skills and the quality of personal interaction will be considered more important. At the same time, banks must determine how to deal with legacy technology that is still mission critical – a problem complicated by the fact that legacy technologists are retiring and being replaced by millennials who have a different technology literacy.
One solution for plugging the gap is relying on an extended workforce. Accenture research shows that 82 per cent of all organisations use part-time workers, freelancers, contract employees and consultants. Many retiring staff may be seeking such employment but many new entrants to the marketplace may want such work too, as flexibility is a key buzz word among millennials. Indeed, according to Accenture research, after salary and benefits, more than one third of 2015 graduates said they valued flexible work hours.
Put simply, banks will need to seek out staff with broader skill sets who can work within the framework of increasingly digitally enabled environments. To attract and retain staff, they will need to create environments that truly foster work-life integration, innovative work environments, opportunities for challenging work and opportunities for advancement.
Beat Monnerat is head of Accenture’s Asia-Pacific financial services business