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Friday, Feb 23, 2024

Banking’s Biggest Hurdle: Finding Skilled Employees

Time was, banks filled their ranks by recruiting at entry levels, putting their staffers through formal training programs and, in essence, growing their own executives. But the elimination of many of these formal training programs, along with consolidations, fierce competition for talent and a different set of attitudes on the part of the newest entrants to the workforce these days, has upset the human resources’ balance sheet at most banks. The training programs are gone, and in their place, bankers are hitting the streets to recruit an increasingly scarce workforce. “I think the biggest challenge for us is finding bankers with the correct skill set,” said Bill Sloan, Santa Clarita regional president for California United Bank, echoing the sentiments of just about every banker in the area. “Years ago we would all come out of college and go to a big bank for training. That doesn’t exist anymore. So what ends up happening is you hire people who might have a limited skill set and then you have to spend time training them for the position you want them to fill.” Bankers say it is taking twice as long to fill openings and, when they do, they are likely to select someone whose biggest attribute is their attitude, not their technical skill or knowledge. “In the past we had a lot of generalists who would do multiple jobs,” said Marianne Cederlind, senior vice president at Mission Valley Bank. “Now those individuals are hard to find. So it’s finding the right person and finding the right attitude. Banking is changing and we have to change.” The people crunch is hitting banks of all sizes, although the dynamics often differ depending on the bank’s size. Large banks are struggling to keep up with HR needs in part because many are opening new branches at a brisk pace. “To the extent that we continue to grow and open new stores it does become more challenging because there are only so many good people to go around,” said Michael Moore, senior vice president, human resources for Wells Fargo, which opened four new branches in the Valley alone since March and is set to open a fifth in the fourth quarter. “It’s an ongoing challenge.” Smaller banks concede that they no longer have the luxury of picking off the training program graduates at larger banks because most of the formal training programs have been eliminated. “Before there were these training programs and they would move people up the ranks,” said Kim Altobello, executive vice president and chief administrative officer at Bank of Santa Clarita. “The other financial institutions were eyeing those people and offering them a substantial amount of money.” At small banks too, middle managers and other executives often wear several hats and the folks coming out of larger banks are likely to be far more specialized. Even small banks are instituting training programs and utilizing other resources for formal training. “We’re starting to utilize training seminars at California Banker’s Association and Western Independent Bankers, not only to train people who are new, but to give the additional skill set to existing employees because we’re not big enough to have our own training department,” Altobello said. But whether they are large or small, all banks are facing a bigger, more systemic problem. Today’s labor pool is not rushing to the banking industry as it once did. “Many of the positions people would traditionally go into have fallen out of favor with recent college grads,” said Sean McCarthy, president of Jackson McCarthy & Associates Inc., a Woodland Hills recruiting firm that specializes in financial personnel. “Kids coming out of college today want to go into entertainment, sports management, things that are sexy and that may have a big payoff in the short run, such as helping to design video games. Those kinds of industries seem to have siphoned off a lot of the talent that may have otherwise gone into these traditional fields.” That’s a problem that many traditional industries are having, McCarthy said, but it is perhaps more pronounced in banking where a staffer’s value often comes with longevity. Generations past were content to make their way up the career ladder slowly. Today, even when banks can lure young college graduates to their ranks, they are finding that their new employees are not so willing to pay their dues. “We have a lot of younger people working here,” said Cederlind. “They want to move up the food chain faster. There used to be people who were career tellers. Now they get bored quickly and they need a lot more stimulation.” Banking, especially, is highly structured with more formalized career paths, and Millennials, in particular, are inclined to bypass those types of jobs, particularly when there are other choices available. “There are more opportunities for people to look at and assess,” said Moore. “That adds to the equation. We have been forced to become more creative in our approach.” Bankers say that they are foregoing some of the more traditional recruiting methods in favor of community-based outreach efforts that allow them to more fully explain and demonstrate the advantages the industry has to offer. But some say that creative recruiting efforts can only accomplish so much, and many of the banking jobs today are being filled by foreign-born candidates, who often bring another set of problems. “The people who are filling the gap are typically foreign born,” said McCarthy. “We’re seeing people from Russia, from China, from the Far East in general going into these fields in large numbers. The challenge employers have in hiring people like that is their language skills. It’s difficult for them to be able to communicate sufficiently with a customer, and for a customer to feel satisfied that the person they are talking to understands their situation.”

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