Staff attrition: How can the banking and asset management COO community address the exponential crisis facing the industry
by Maurice Evlyn-Bufton, CEO of Armstrong Wolfe
In this discussion paper we position human capital risk as an element of non-financial risk (NFR) and a point of serious consideration in context to operational resilience. Staff attrition, as an aspect of human capital risk, is therefore a NFR and can be viewed as a factor that can erode operational resilience. Developing a fresh perspective on how best to lead, manage and develop your people will be needed to address staff attrition, enhance retention, and drive productivity.
With 2021 attrition rates above pre-pandemic levels, this challenge and business imperative will be a key point of consideration and focus for the COO throughout 2022.
This document will find agreement with some, questions from others, where a Markets’ COO noted upon reading its draft
“Whilst I agree that as it stands, the industry is seeing attrition at the junior levels, I think we can anticipate that at some point in the future there will be more of a groundswell of individuals leaving at the more senior levels. As is pointed out in the document, they are at the moment tethered to organisations through compensation but over time, senior individuals are figuring out ways to manage their bills with less, we are seeing more and more senior individuals thinking about setting up on their own (I have a colleague who is a business coach for start-ups and scale ups and his client intake has gone up 40% in the last year with ex full time employees setting up on their own) and there is a palpable increase on social media of senior individuals talking about leaving ‘traditional’ firms. Because they have more at stake these conversations are happening more discreetly so will be less visible but just because it’s less visible, doesn’t mean it’s not there.”
“Organisations are acutely aware of the need to change their working practises to better suit employees needs and wants and therefore reduce attrition, we are still seeing a lot of organisations failing to understand just how fed up, stressed and tired their employees are. There is a growing backlash towards this idea of the ‘Great Resignation’ which tends to suggest employees are pulling away from large firms because of an ideology of better quality of life and desire to give back to society in favour of the simple recognition that employees are tired, stressed and fed up of being asked to do more with less. It’s all very well firms thinking about working from home practises but if they are allowing employees to work from home 3 days a week whilst at the same time, asking them to double hat/treble hat or caretake or handhold additional responsibilities, it won’t solve the problem. The reality is, until firms recognise that their people cost base has to go up because they cannot continue to do more with less and they radically change their approach, the backlash will grow.”
There are of course multiple influences on talent management, each playing their role and to differing levels in each sector, region or at company level. An Asset Management COO commented a topic he felt warranted greater importance, “The issue I expected to be more referenced is the ‘diverse talent premium’ / ‘the war for diverse talent’. We are seeing evidence that senior diverse talent (female talent in particular) are being aggressively headhunted at the moment. I think this poses a number of interesting questions related to:
- Compensation – are you proactively rewarding diverse talent and/or addressing compensation discrepancies?
- Progress towards DE&I targets – how can firms avoid all the good work they are doing on recruitment, L&D, promotions etc. to get diverse talent into senior roles taking a hit if these individuals are being actively sought out and targeted?
- The impact of external initiatives / frameworks – as more firms commit to industry targets and/or have to provide richer DE&I info to clients in RFPs/DDQs this war for diverse talent is only going to intensify?
All valid points and contributions, although notedly and since the initial draft was completed, Armstrong Wolfe held a Markets COO roundtable dinner in London to discuss the challenges this community will face in 2022 and within this myriad of challenges, what will be the priorities. The majority stated NFR, all noted workforce challenges, whilst the whole stated purpose, “We have largely paid lip service to purpose within the industry, not really understanding what it is, how to take it from well-intended words and principles, to being embedded in an organization’s DNA” one attendee remarked, where making the commercial case for purposefulness and good conduct remains the principal hurdle to progress. However, perhaps prompted by the pandemic, purpose has been promoted to being of significant importance for all if the industry is going to remain competitive within the re-emerged war for talent.