Has Upskilling Been Effective in Solving Talent Shortage?
by Ammar Khairi & immedia | 21st January 2020
Financial services organisations do not have enough qualified talent to go around. As the competition for hiring continues to intensify due to the limited talent pool, companies in the industry may be better off directing the focus towards upskilling their existing workforce instead.
The Talent Gap in the Financial Services Industry – Just How Dire Is It?
The Asian Institute of Finance (AIF) conducted a survey of 600 employers across the Malaysian financial services industry and discovered a common problem. They all struggle to find skilled talent to fill various job positions.
According to the survey, more than three-quarters (76%) of employers say they experience talent shortages, which poses a major challenge for the industry’s prospects. The report also found that:
- 93% of employees believe that talent shortages were impacting productivity to either a high or medium degree
- 55% of employers say that filling job vacancies over the next few years would be ‘difficult’ or ‘very difficult’
- The talent gap has only seen marginal improvement over the years
This problem is not limited to Malaysia. 70% of CEOs surveyed globally by PricewaterhouseCoopers (PwC) also say the limited availability of skills is a threat to growth.
The Future of Work – Where is the Financial Services Industry Headed?
The financial services industry is rapidly evolving, thanks to the increasing use of technologies such as artificial intelligence and automation. Malaysian banks have already implemented some of these technologies, starting with the use of chatbots. HSBC has Chatbot Amy, RHB has My RHB Easy, and CIMB has the Enhanced Virtual Assistant (EVA).
Change is coming -- Workers know automation will change their jobs, and want to learn new skills to improve their employability. (Source: PwC)
According to the Malaysian Social Security Organisation (SOCSO), most job replacements in 2018 was brought about by various forms of automation. While the most affected sectors were manufacturing and construction, the agency warns that the banking sector is next. In fact, a 2017 McKinsey global report estimates that 43% of all finance and insurance activities can be automated through technology that is already available.
How Will These Technologies Affect the Talent Gap in Financial Services?
These technologies are likely to reduce lower-skilled administrative jobs, but they will only increase the need for skilled employees. A global survey of CFOs by Deloitte revealed that most CFOs believe the focus for employees will shift towards analysis, prediction, and decision support within three years – all of which are skilled roles.
To address this issue, financial services organisations must amplify their efforts in upskilling their current employees to close this talent gap, and seek out the most efficient ways to do so.
The Two Essential Components for Closing the Talent Gap
Effective upskilling cannot happen in a vacuum. Rather, it is an indirect by-product of an organisation’s talent management framework. Since a large part of a successful talent management framework is proper succession planning, organisations cannot afford to ignore this area when considering the larger problem of the talent gap.
Breakdown of Workers in SMBs – with 76% of workers in SMBs now are millennials, and they cover the most coveted skills. (Source: The Star)
The statistics back up this claim. In the aforementioned AIF study, a lack of skilled workers was only the second most cited reason for the talent shortage. The first? A lack of proper succession planning and leadership. Thus, the first component to closing the talent gap is to address this pressing issue
The second component is making the upskilling process more effective and efficient. Too often, financial services organisations waste their time and money by sending employees for training programmes without questioning their effectiveness.
These two components also have a synergistic effect. Effective upskilling leads to better internal talent, which then makes succession planning easier. The bottom line is, if your organisation is suffering from a talent shortage, then you need to take a closer look at these two components.
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