Patrick Luther, Industry Principal, Financial Services at Ceridian, makes three predictions for how the COVID-19 pandemic will affect the financial services workforce, along with solutions to help organizations build a more adaptable workforce.
Prior to the pandemic, the financial services sector was still largely holding onto the traditional work model, with employees coming to physical locations for a nine-to-five workday. Then everything changed overnight, and financial services organizations did what they’ve always done when outside forces disrupted the status quo – they adapted. Now the question on everyone’s mind is whether things will go back to the old way, or if these changes are here to stay.
While the pandemic has created many challenges for financial services companies, it’s also a great opportunity for leaders to rethink how things have always been done. The pace of change is accelerating, so companies will need to become much more agile than in the past to thrive in the post-COVID-19 era.
Here are three predictions on how the pandemic will affect the financial services workforce, and how organizations can address them through investing in technology.
1. A shape-shifting skills gap
The financial services sector was already struggling with a shortage of skilled labor prior to the pandemic. According to a 2019 Ceridian research study, 93% of financial services executives surveyed said their organizations were experiencing some degree of skills gap . This was partly due to increased adoption of advanced technologies, such as robotic process automation (RPA), to build efficiencies and keep up with fintech, causing a decoupling of roles and tasks. But it was also in part due to the rate at which technology is changing the world and the skills needed to thrive in it .
While significant job losses as a result of the pandemic may seem like a solution to the shortage of skilled labor, the reality is more complicated. First, the available candidates may not match the specialized skills financial services organizations are looking for. And second, the pace of change is accelerating with the pandemic, driven by changing behaviors and expectations from customers, and other external factors. That means understanding which skills are needed and how to acquire them is now a moving target.
A big driving force of change for financial services organizations – both before and during the pandemic – is their clients. This sector is in a unique position to support the public during this crisis. There is an expectation that organizations will be part of the solution, offering flexibility and support to customers. But the rules have changed for what makes a great client experience, and keeping up with this moving goalpost will require constant pivoting by the workforce. The skills needed today are once again evolving, and will continue to do so.
The pandemic has also shifted the need for digitization into overdrive. While there was already a push to increase web and mobile capabilities prior to the crisis alongside changing consumer behaviors, the overnight switch to remote working has driven home the importance of having a digital-first workforce. Companies that were ahead of the curve before the pandemic hit are now seeing the fruits of that investment, while laggards are paying the price for waiting. This fundamental switch to digital will in and of itself require a significant skills pivot for the workforce.
Financial services organizations will need to become much more agile to thrive in the post-COVID-19 era. While reskilling will continue to be high priority, it can’t be a “one and done” approach. Technology can play a key role in helping organizations tackle skill-building initiatives in an agile way. Learning platforms can be personalized by role to increase its value to employees, leading to a higher adoption rate and a better return on investment. Learning can also be embedded into work to make it hyper-relevant to employees, and platforms allow for social learning and collaboration across organizations.
2. A decentralized workforce
The pandemic has challenged the financial services sector’s longstanding belief that trading, serving clients, and closing deals need to happen in a traditional office setting. Instead, organizations have found that productive remote working is possible. Bank of Montreal (BMO) estimates that as much as 80% of its global workforce will permanently adopt blended working arrangements after the pandemic ends . The bank was able to sustain business continuity across the organization, and its investment bankers had success with virtual pitching. Similarly, one international bank saw virtual selling as a competitive advantage and began upskilling its sales reps to maximize the format .
The pandemic poses an opportunity to take stock of lessons learned, for financial services firms with retail operations and extensive real estate in particular. Understanding if and how reduced staffing and branch hours affect revenue can help organizations determine if it makes sense to consolidate certain products or services into regional, specialized offices – or online. While these changes can potentially lighten the real estate footprint and headcount, they will also affect how people work. Organizations should not only embrace changes that support operational efficiency and cost savings, but also consider developing training and change management strategies to help transition the workforce.
Adopting flexible or hybrid working models has many benefits for organizations. For one, it can free up cash to invest in other parts of the business – McKinsey estimates that the costs associated with renting, management, and maintenance of office space can amount to 10-20% of total people costs . That being said, for companies that have always operated with close physical proximity, maintaining culture, compliance, and operational efficiency can be challenging in a decentralized workforce. While business continuity may be strong during the pandemic, organizations need to think ahead to the post-COVID-19 era and consider how new ways of working will impact reaching their long-term goals.
Technology can support a decentralized workforce in many ways beyond simply connecting people online or through video conferencing. The right system can help digitize some of the normal activities of the office to facilitate collaboration, mentoring, and social learning. This has the added benefit of capturing knowledge in a digital format for employees across the organization to access, and can also help organizations retain critical information as baby boomers retire in large numbers. Managing learning, development, and performance digitally can also help to align employees’ work to business goals and longer-term plans. This is important for preserving the company’s culture and core values when teams are at home – or spread across the globe.
For financial services companies with retail locations, self-serve tools can also simplify scheduling. With constant change around consumer demand and behavior expected for the foreseeable future, this can help alleviate the administrative burden on managers, while allowing employees more flexibility. For client-facing and back-office employees alike, offering a “consumerized” experience through technology (e.g. requesting vacation or viewing paystubs through a mobile app) is an attractive convenience in today’s world, especially for millennial and Gen Z talent.
3. A wellness pandemic
The effects of the pandemic on people’s mental health will be significant, and lasting. While the financial services sector may not have been as hard hit as other industries when it comes to job loss, many of its employees are working closely with members of the public who are in very challenging financial situations. That will undoubtedly cause stress and strain on the sector’s workforce, and many may also be facing their own financial challenges due to market instability and the high cost of healthcare.
Financial services organizations will need to expand their employee wellness programs to include physical, mental, and financial wellness supports. On the physical health side, organizations can leverage our safety monitoring tool to track where employees are working, their health status, and their contact information, and send real-time notifications based on location. This can help companies protect the health of their employees, and communicate more effectively during times of uncertainty.
Companies should also consider how they can support employees’ mental health. Learning platforms can be used to train people on stress management or to make them aware of the different types of programs available to support them and their families. Wellness programs, such as yoga and meditation, can also be delivered through a learning platform so employees can access them for free. Employee surveys and sentiment analysis tools can also help organizations understand employees’ stress and engagement levels, and measure the impact of any changes or new programs.
One often overlooked area of employee wellness is the financial side. Employees’ financial stress can have a negative impact on your organization, from higher healthcare costs to an increase in sick days and turnover. Financial services companies can help support employee financial wellness through education, expanding and personalizing benefits, and even allowing employees more flexible access to their earned wages.
Looking toward the future
The COVID-19 pandemic has accelerated the process of learning to operate in a world that’s constantly in flux. For financial services organizations, that means building a more agile, adaptable workforce. Organizations should take the opportunity now to rethink traditional working models and reinvent their approach to the workplace and the workforce. Doing that successfully will not only help companies thrive during the acute crisis, but will also set them up to tackle some of the challenges that were already there – the skills gap, difficulty attracting millennial and Gen Z talent, and operational efficiency.
 2020 Future of Work Study, Ceridian and Hanover Research
 Reskilling Revolution Platform, World Economic Forum
 Doug Alexander, BMO Says 80% of Employees May Switch to Blended Home-Office Work, BNN Bloomberg, May 2020
 Aaron De Smet, Sébastien Lacroix, and Angelika Reich, To Emerge Stronger From the COVID-19 Crisis, Companies Should Start Reskilling Their Workforces Now, McKinsey & Company, May 2020
 Brodie Boland, Aaron De Smet, Rob Palter, and Aditya Sanghvi, Reimagining the Office and Work Life After COVID-19, McKinsey & Company, June 2020
The Ceridian Institute provides forward-looking insights that build awareness and advocacy of the trends and challenges facing the workplace. The Institute is composed of industry leaders from Ceridian’s Industry, Value, and Solution advisories, reflecting the team’s research into the future of work and business intelligence.View Collection
Patrick Luther is Vice President and Principal, Financial Services at Ceridian. He has over 10 years of experience in product management and marketing of enterprise software, and 10+ years in consulting for the financial services sector. Patrick is a former U.S. Navy Lieutenant, and has held leadership roles at IBM, Rational, Infosys, Deloitte, and various SaaS startups. Patrick holds a B.S. in Mechanical Engineering from the University of Rochester and an MBA from Yale.View Collection