March 17, 2023
Recruiting in financial services in 2023
March 3, 2023
What does the future hold for recruitment in the financial services (FinServ) industry? Well, we know a few things. We know that in order for financial services companies to keep pace with digital transformation and meet cybersecurity requirements, they need to find the right talent… but they’re up against big tech companies to win this talent over. We know that recruiting teams in the financial services sector struggle with talents’ negative perception of the industry: FinServ companies are perceived to lack diversity, offer less flexibility, and have antiquated practices and “stuffy” cultures. Changing brand perceptions is critical for talent acquisition to thrive.
We know that diversity remains a top priority for FinServ: over the last decade, companies have been making efforts to increase representation; and with recent laws and regulations it’s now mandatory for publicly-traded companies to disclose their diversity statistics. We know that financial services is a highly-regulated industry, and companies in it need to ensure they’re being compliant. This impacts the recruiting tech they can implement.
But we wanted to know more. That’s why we surveyed nearly 100 talent acquisition professionals in financial services as 2022 came to a close: to get a collective sense of pain points, priorities, expectations, and goals, along with a shared sense of what 2023 might have in store. We asked about everything from tech stacks, to headcount plans, to diversity hiring, to employee benefits, to recruiting KPIs. We also segmented responses by company size, recognizing that recruiting teams in smaller organizations (1-999 FTEs) and larger organizations (1000+ FTEs) may be having different experiences right now. Here are some things we learned:
In the last half of 2022, 28% of recruiting organizations at financial services companies saw reductions in force, regardless of company size. Yet ⅖ of smaller organizations (40%) and over ⅓ of larger organizations (36%) saw recruiting team growth. And the outlook for 2023 is cautiously optimistic: while 17% of FinServ respondents expect their recruiting teams to shrink this year, nearly ¾ (72%) of respondents say they expect Recruiting will either stay the same size or grow in 2023.
What’s more, 57% of talent acquisition professionals at financial services organizations say they expect company-wide headcount increases—whether slight or significant—in 2023.
Recruiting teams’ top 3 downturn priorities in this market are building their talent pipelines (66% of smaller orgs and 48% of larger orgs are doing this), data cleanup (45% of smaller orgs and 55% of larger orgs are doing this), and evaluating their DEI initiatives (34% of smaller orgs and 52% of larger orgs are doing this).
Building and/or strengthening their employee value proposition (EVP) is also high on the list of downturn priorities: 31% and 42% of teams respectively say they’re engaging in EVP activities. Meanwhile, 25% of financial services companies—31% of smaller orgs and 18% of larger orgs—say they’re not experiencing downtime.
While ¼ of financial services companies aren’t experiencing downtime, those that are seem to be using this time wisely—which explains why 85% of teams believe they’ll be prepared for a hiring market rebound. (And if you want to know how top talent leaders spend hiring slowdowns, we’ve got a resource for you.)
Nearly half (46%) of smaller financial services organizations and 90% of larger ones say they have formal diversity hiring initiatives or diversity goals in place. 21% of respondents say they’re meeting their diversity goals—meaning 79% of teams see at least some struggle in meeting them. The biggest barrier for FinServ organizations when it comes to diversity is finding underrepresented talent to begin with (52%), followed by moving underrepresented candidates through the hiring funnel (24%) and getting those candidates to accept their offers (21%).
The top 3 KPIs financial services recruiting teams tracked in 2022 were time to hire (80% of teams tracked this), offer accept rate (72% of teams tracked this), and source of hire (72% of teams tracked this). For the most part, larger organizations were more likely to track most KPIs than smaller orgs were. Two exceptions were offer rejection reasons (77% v. 50%) and time in stage (42% v. 29%)—smaller organizations were more likely to track these metrics.
In 2023, the top use cases for data will be: to report on time-to-hire and cost-per-hire (63%), to track diversity hiring (61%), and to uncover best sources of hire (58%).
When we asked how important data will be in 2023 on a scale of 1-10, recruiting professionals in financial services gave it a 7.9 out of 10.
“At Affirm, our ATS is deeply integrated with Gem. So I can track everything—top, middle, bottom of the funnel, you name it. Whatever I need to know—pipeline conversion by department, by sourcer, time-in-stage, time to fill—it’s there. It’s a complete game-changer.”
- Emily Stellick, Head of Global Sourcing @ Affirm
The ATS is the #1 technology recruiting teams in the financial services space will invest budget in this year. (Sourcing tools and tech are #2; recruitment marketing tools and platforms are #3.) Smaller companies are nearly 2x more likely to say they’re investing in an ATS in 2023 (50% v. 26%), while larger companies are maturing their tech stacks with candidate relationship management (CRM) platforms (30% v. 5%) and recruitment marketing tools (37% v. 23%).
Diversity hiring is the #1 activity respondents said recruiting teams should be focusing on in 2023, followed by talent sourcing. Talent professionals at smaller organizations also emphasized internal mobility, recruitment automation, and re-engaging past applicants and former silver medalists; while those at larger organizations emphasized pay transparency and fully embracing remote or hybrid work.
Regardless of company size, the top recruiting and hiring challenge talent acquisition professionals anticipate in 2023 is difficulty finding qualified candidates (57% of smaller orgs and 52% of larger orgs anticipate this challenge). In aggregate, uncompetitive offers (35%) and nurturing passive talent over the long term (29%) come in at challenge #2 and #3, respectively.
Smaller FinServ organizations are more likely to foresee lack of hiring manager involvement, lack of headcount, and undefined employer brand as challenges; while larger organizations are more likely to foresee struggling with inefficient interview processes, recruiting process delays, and uncompetitive offers.
There are many more insights in our 2023 recruiting trends in financial services report. We hope this resource helps you better understand the broader financial services recruiting landscape, assess your company’s place in that landscape, and anticipate what may lie ahead. It’s as important as ever to keep a finger on the pulse of the industry.
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