Bankers Needed: An Expensive Problem

Bankers Needed: An Expensive Problem

If you’ve been following the news lately, you’ve likely encountered stories about the strong demand for skilled workers in industries like manufacturing, healthcare, construction, and logistics. But did you know finance is also near the top of the list of industries with this problem?

The Federal Reserve reported that finance was one of six industries with the highest worker demand. Also, a study published at the end of last year by international management consulting firm Korn Ferry calculated the projected labor deficit by 2020 to be roughly 2.9 million workers nationally. By 2025, it’s projected to be 5.5 million workers, and by 2030 could reach a whopping 10.7 million.

To make things worse, this lack of skilled workers is projected to be expensive.

“The United States’ financial services sector will suffer the most [of all industries] from stunted growth due to lack of talent, with $435.69 billion in projected unrealized economic output, equal to about 1.5% of the country’s entire economy, by 2030,” the Korn Ferry study’s authors said.

In order to prevent the output losses from happening, financial institutions have been working on ways to attract more people and develop new workers. In Indiana, banks have been working together under the direction of the Indiana Bankers Association (IBA) to kick off several new initiatives and collaborations.

 

First-of-its-Kind Path of Study

Members of the IBA worked with Purdue University Northwest (PNW) officials for nearly a year to develop a new financial focus for students, one that will be the first of its kind in Indiana. Together as partners, the two organizations have launched a new banking concentration in the College of Business for undergraduate students majoring in finance.

“Of the 23 institutions in Indiana that offer a bachelor’s degree in finance, none provide students with the option to study banking through a major concentration or a minor. Purdue Northwest will be the first,” said College of Business Dean Jane Mutchler.

Employment projections for banking professionals statewide is forecast to grow by 10.7 percent from 2016 to 2026, faster than the average growth rate for all occupations in Indiana, according to PNW.

Curriculum for the concentration was developed with input from the Indiana banking community. It will encompass courses in risk management, bank management, financial reporting and compliance, along with an internship requirement. The concentration will help students identify post-graduate career paths while benefiting the banking community in attracting future talent.

“The new program is another visible example of our ongoing cultivation of a responsive talent pipeline to meet the needs of critical industries and employers in the regional economy,” said Matt Wells, executive director of career management in the College of Business.

The IBA provided a $135,000 donation to support the three-year startup of the concentration, beginning this fall. After that, PNW projects the concentration will be self-sustained.

 

Next-Gen Bankers

The IBA’s current strategic plan established several additional talent development initiatives under the organization’s “Next-Gen Bankers” pillar designed to help banks both onboard new workers and provide education/training to emerging leaders. Programs include topics such as:

  • Expanding internship connections – The IBA acts as a liaison between banks and Indiana colleges/universities to facilitate and develop meaningful internship opportunities.
  • Supporting future leaders – The association has several programs aimed at increasing skills and providing support networks for future banking leaders. Emerging bank leaders have access to various educational, networking, and volunteer opportunities, including intense programming aimed at sharpening leadership skills to develop team-building and problem-solving abilities.
  • Partnerships with multi-state organizations – The IBA is partnered with BankTalentHQ a bank-specific career resource center that is also partnered with bankers associations from several other states.
  • Online video highlights – The Next-Gen Bankers video series is an ongoing series of online videos that showcase younger professionals who share why they have chosen banking as a career.

 

Only Round One

Programs like these in Indiana represent great initial steps, but they’re likely the first round of what is foreseeably a prolonged fight against the growing talent shortage in the financial sector. It’s an expensive problem, not just for Indiana but the whole country. A combined approach involving stakeholders on virtually every level will be necessary to prevent such a large loss projection. One can certainly expect to see more talent recruitment/development programs emerging in finance over the coming years.