Terms like “the war for talent,” “talent crisis”, and “skills shortage” are becoming so ubiquitous we hardly blink an eye when yet another study is published on the “looming talent gap.” Technical skills like data science, programming, and other STEM skills remain high on the list of in-demand skills, but we are seeing ‘soft’ skills -- critical thinking, creativity/innovation, people management and negotiation -- rising in importance in financial services (FS). It’s gotten to the point where many organizations have started to simply accept this talent gap as the norm -- applying band-aid approaches vs. overhauling their workforce strategies to better prepare for the future.
This is a topic we’re addressing every day with our financial services clients, helping them think through their workforce strategies to prepare for the disruptive changes coming down the pike, be it new business models, technology disruption, regulatory change or continued downward cost pressures. These changes require new capabilities, and organizations are working to build the appropriate infrastructure, processes and systems to support those capabilities, as well as finding people with the right skills to support them.
‘Workforce strategy’ is how and where a company organizes its talent to deliver business capabilities that achieve strategic objectives. This is a multi-dimensional solution, encompassing tax, legal, and regulatory considerations as inputs into traditional workforce and location planning processes.
As it stands, workforce strategy is a broad topic, seeking to address a range of interrelated questions: How do you prepare the organization’s workforce for regulatory changes? What is your vision for the employee experience and how do you market that externally? Where do you put your workforce physically to deliver on business priorities, but keep labor costs affordable? What does the workspace itself look like to drive collaboration and teaming? How do you engage and reward your people?
A framework for response
Given the number of dynamic factors to consider in a workforce strategy, we developed the below framework to help clients think through how they organize their response.
PwC’s Workforce Strategy Framework
When leveraging this framework, remember that the driving force of change may emerge from a variety of places – and some elements of the model may be more applicable to certain scenarios than others. The following triggers should prompt use of the workforce strategy model:
- Changing business strategy -- Requires new capabilities, including appropriate processes, systems and people. Many FS institutions are focused on capability building around disruptive technologies, such as the heavy focus in the banking industry on artificial intelligence (AI) to build a competitive advantage.
- Tax, legal and regulatory change -- Drives strategy, capability, workforce and/or workplace changes. For example, the Department of Labor’s controversial Fiduciary Rule is shifting the role and responsibilities of Financial Advisors (FAs), driving changes in high-level business strategy down through workforce planning for FAs.
- Changing real estate footprint and high labor cost -- Requires an assessment of location strategy and associated labor supply. Banks have continued to focus on labor arbitrage, shifting their talent to lower cost locations such as Jacksonville, FL, Research Triangle Park, NC, Nashville, TN, Austin, TX, and Salt Lake City, UT.
- Challenges attracting talent contingent workforce -- Requires rethinking the organization’s talent strategy. For example, the contingent workforce has become an increasingly important part of the talent strategy of financial services institutions to fill talent gaps, and should be embedded into workforce planning to develop a holistic picture of the workforce.
The following are a few ways to get started as you think about your workforce strategy:
- Integrate workforce considerations in the business planning process – Annual business planning is a logical place to embed the workforce strategy discussion, embedded in long-term business strategy and budget forecasts. Workforce strategy can be driven by HR, but needs to be owned by the business as it plays a critical role in executing workforce strategy successfully.
- Utilize data-driven scenario planning. Develop workforce models and projections that can be baselined and tracked, enabling decision-making around workforce trends.
- Flex your talent strategy in light of business changes. As business priorities evolve, so should the way you fill talent gaps. Consider the type of talent you will need to attract and retain, and where you locate that talent. Are your previous talent strategies still working? Consider talent development, internal mobility, stretch assignments, benefits, and other solutions across the talent lifecycle in addition to commonly used recruiting solutions.
- Build your workforce strategy capability. Implement a repeatable workforce planning process to prepare the organization to accommodate significant changes. Clarify the role between the business, HR, Finance, Real Estate and Facilities, and the role they play in developing and executing workforce strategy.
If you’re interested in learning more, join PwC’s Bhushan Sethi and Julia Lamm for their live webcast, “How workforce strategy can help organizations today, tomorrow, and beyond,” scheduled for 1:00 pm EST on Thursday, July 20th. They’ll explore the way the world of work is changing, planning for the workforce of the future, key components of workforce strategy and the capabilities needed to win in a changing competitive marketplace.