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Staffing Headaches Grow with No End in Sight.

Updated: Aug 12



Call it “The Great Resignation.” Call it “The Great Reshuffle.” Or call it “Pandemic-Induced Burnout.” If you’re a community bank or credit union operating in 2022, no matter what name you use, chances are that you’re finding it hard to hire—and retain—the right employees.


Last year, 78 percent of responding bank directors, HR officers, CEOs, and other senior executives at U.S. banks said it was harder to attract and keep talent than it had been in previous years, according to a 2022 compensation survey by Bank Director[1].


One of the biggest challenges is an insufficient number of qualified applicants, said 76 percent of survey respondents.


Cornerstone Advisors released similar findings. In early 2022, 67 percent of banks and 63 percent of credit unions said that attracting qualified talent was a top concern. According to the survey, these numbers are up from a mere 19 percent for both groups one year ago.


Talent Shortage Hits Compliance Hard


Some of banks’ biggest staffing challenges are pummeling the compliance function, a problem that’s even more pronounced for institution’s that bank higher-risk businesses.


In an OCC report on key risks facing the federal banking system, published on June 23rd, one of five risks highlighted was compliance “as banks navigate the current operational environment, regulatory changes, and policy initiatives.” The OCC also found that operational risks—such as cyber-risk—remain elevated[2].


These alarming bank employment trends are poised to continue and are further exacerbated by financial institutions’ desire to staff up. Of executives surveyed by Bank Director, 29 percent said that they plan to add risk and compliance personnel this year.


Problems attracting talent are not unique to banking– and these problems show no signs of easing any time soon.


For each month of 2022, more than four million Americans left their jobs. And according to a new report from McKinsey & Company, far more are plotting their exit strategies, going forward. Roughly 40 percent of workers around the globe are planning to leave their current positions and are hoping to do so within the next three-to-six months, according to McKinsey[3].


Pay Hikes—and Other Strategies


Bank Director’s compensation survey found that the laws of supply and demand are in full swing right now, with banks paying more to attract scarce talent.


In its survey, 98 percent of respondents said that they increased non-executive pay in 2021, and 85 percent raised executive compensation. Overall, said participants, compensation increased by a median five percent during this time period.


The law of supply and demand also means that pay is being driven higher by competition from big banks. Emily McCormick, Bank Director’s vice president of research, notes that Bank of America recently raised its minimum wage to $22 an hour[4].


Beyond increasing pay, there are a few other tried-and-true ways to manage a talent shortage. One is to initiate internship or education programs to train young people to become bankers (this strategy, admittedly, takes years to pay off). Another is to reskill or upskill existing employees.


Yet another solution is working with software partners. It’s widely known that the right banking-oriented software solution can ease staffing burdens for community banks and credit unions by allowing fewer employees to accomplish more.


Take compliance, for instance. The scarcity of BSA professionals in the financial-services sector has been an open secret for years now. Because each new regulation means a host of additional actions must be taken, compliance professionals are more overburdened than ever. Given talent shortages, many community banks and credit unions are finding that software can free up existing staff to do more in terms of frequency tracking, documentation due diligence, and regular monitoring of key activities.


The talent shortage is likely to be a pressing problem for years to come, so now is the time to get creative and explore some fresh options that might work for your institution.


Join our webinar on "What Bankers Need to Know in Navigating Fintech Compliance" to learn how to vet potential software partners that may help ease your institution’s staffing woes.


 

[1]https://www.bankdirector.com/press-release/bank-compensation-survey-results-findings-released-2/ [2]https://www.ots.treas.gov/news-issuances/news-releases/2022/nr-occ-2022-73.html [3]https://www.cnbc.com/2022/07/20/40percent-of-workers-are-considering-quitting-their-jobs-soon.html [4]https://www.bankdirector.com/press-release/bank-compensation-survey-results-findings-released-2/

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