Are Financial Services ready for the work model of the future?

EY surveyed a range of clients within the Belgian FS sector on the work model of the future and its associated challenges

In brief:

• Flexible work models are here to stay
• Talent attraction and emotional wellbeing are key concerns for financial institutions
• Upskilling, reskilling, workforce planning and retention are the priorities for the next 6 months

Recent trends in the market have sparked a renewed interest in understanding the workforce and its associated challenges. In response to this renewed interest, EY carried out the “EY Global Work Reimagined Survey” to gather perspectives from both sides and bring a comprehensive view on the issues. 

To gain more regional insights, we surveyed a range of clients within the FS sector in Belgium, between July and September 2022. The respondents hold management roles within the FS sector. This includes traditional HR functions, as well as managers who are confronted with a variety of challenges, such as transformations, post-COVID issues, and the daily struggles faced by their workforce.

This article summarizes the three main findings that arise from the study.

1. Flexible work models are here to stay

Several trends are reshaping the way we work. Among them, remote working is probably the first one that comes to mind.

At the start of the pandemic, companies were forced to shift from a complete on-premise work environment, with little to no remote working allowed, to a fully remote model. 96% of respondents are convinced that their companies came out stronger than they were before the pandemic. 

Post-pandemic, most respondents expect physical presence in the office for at least two to three days a week, indicating that the majority of financial services organizations have now fully adopted a flexible working model. Flexibility is mostly defined as a minimum presence required at the office. It does not necessarily mean that employees get to choose when or where to work. But telework is here to stay and Tuesdays and Thursdays appear to be very popular times to come to the office. 

What is surprising in the Belgian FS market, is that employers are not asking their employees to come back to the office for a full workweek, whereas, globally, this is a requirement expressed by 22% of employers.

Within the financial sector, just like anywhere else, flexible working models are here to stay. For employers, this means reduced office space. For employees, it increases emotional wellbeing. However, skyrocketing energy prices might push employees back to the office and the FS sector is not prepared. All of this calls for a clear teleworking policy, and a change in mindset and culture, adapted to remote working.  

2. Talent attraction and emotional wellbeing are key concerns for financial institutions

Today’s market is also characterized by the war on talent, which won’t end anytime soon. In this context, Belgian banks are expected to hire over 2.500 people in the coming year, which is 25% more compared to the previous year. It’s therefore no surprise that one of the top concerns in the workplace remains the attraction of new talent.

To remain competitive, it is crucial for companies to upgrade their employee value proposition and offer attractive conditions. While flexible working models were a key differentiator in the past, in today’s tight labor market we see that employees are driven by salary and career advancement. As more and more companies are offering flexible work approaches, it comes as no surprise that there’s a shift in incentives, particularly given the rampant inflation and the number of available positions. Banks and insurance companies believe that expanding career opportunities, listening to the needs of new generations and developing the leadership’s listening abilities will enable them to attract and retain talent. However, employers seem reluctant to increase salaries in order to persuade candidates.

Another top concern for employers today is the emotional wellbeing of employees. And rightly so, as people’s wellbeing is not a luxury, but a business imperative. However, it’s not only a concern, but also an opportunity for companies to stand out. By integrating efforts for improved emotional wellbeing into the overall employee experience, and by offering an effective employee wellbeing program, companies can turn this into a unique selling point helping them to retain and attract talent. Surprisingly, Diversity, Equity and Inclusion (DE&I) ranks low in the list of employer concerns. However, while talent attraction and retention are pushing DE&I toward the bottom of the agenda, defining a diverse and inclusive culture is crucial to achieving these two objectives. It contributes to improved emotional wellbeing, which ultimately results in higher retention.

3. Upskilling, reskilling, workforce planning and retention: the priorities for the next 6 months

When it comes to priorities for the next 6 months, investing in upskilling, reskilling & workforce planning are at the top of the list for Belgian FS leaders, which is very relevant for FS firms dealing with increasing baby boom retirements, the war on talent, and digital transformations. 

With the shelf-life of skills becoming shorter and shorter, it is crucial for banks and insurance companies to become “skills first” organizations. They need to strike the right balance between filling the skills gaps and meeting changing workforce needs. Recent developments in the tech job market such as hiring freezes and layoffs, show the importance of utilizing the existing talent more efficiently through upskilling and reskilling. Hence, managers need to focus on enhancing abilities, motivation, and opportunities for their employees in order to retain them and coach them to perform at their best.

Surprisingly, turnover didn’t seem to be a big issue for FS employers as 75% has not seen a significant increase in the last year. Here, we should not forget the impact flexible working models had on culture and employee satisfaction throughout the pandemic. However, the continued disruption to the workforce, such as changing work models, higher energy prices, and higher cost of living, indicate that companies can expect an increase in turnover in the foreseeable future.

Looking ahead

Flexibility will remain a key word in the work model of the future and employers and employees both have a hand in defining what that looks like. The real challenge is to find a balance between what becomes more flexible and where to reduce flexibility, in areas such as workhours and schedules, work locations and travel, and methods of collaboration. Ultimately, it comes down to creating an optimal work environment for employees, both at home and in the office. A flexible work environment may no longer be a unique selling point, but it will remain an important factor in the war on talent.

Hiring during, or after, this war on talent requires a different mindset on skills profiles. Developing attractive employee value propositions and improving emotional well-being are ways to attract and retain talent, but making sure you hire the right talent will be as important. Traditional technical profiles are likely to become obsolete and the focus will shift to transversal skills. Especially with the shelf-life of a technical skill being significantly less than 20 years ago, the emphasis on soft and transversal skills will only increase. If the FS sector wants to realize the aforementioned culture shift and implement a culture of change and leaning & development, one of the transversal skills they should be looking for is the change management skill.