When everyone was in the office, the warning signs were easier to spot. Realising you’ve signed multiple ‘Bon Voyage’ cards in one week, seeing a never-ending flow of interview candidates popping in and out, feeling like onboarding is an always-on task.
Now that remote working is the default – for a few more months, at least – it’s important to stay aware of your staff attrition, especially if high turnover is a problem in your sector.
The employee attrition problem in financial services
In finance, there are real attrition issues. One report saw an 18.6% turnover rate, higher than all other industries in that study, after a decade-high attrition rate seen in 2016. With employees in the sector being the most likely to leave their role within 90 days of joining, this should be setting alarm bells ringing for leaders and managers in the industry.
Why? Because the cost of staff loss is so high. Rough estimates pin the price of employee turnover as 200% of salary for senior staff, 125% for mid-tier employees, and 50% for the most junior of hires. Other research suggests the cost can be up to 250% – and beyond employee turnover costs statistics, there’s the client relationships they could take with them.
Millennials: one of the reasons for employee attrition being high?
Referring to those born roughly between 1980 and 2000, millennials are known for taking longer to buy property or marry, less likely to own luxury items like cars, and often bemoaned for their taste for avocado toast. While this is all likely due to them earning 20% less than previous generations at their age, what does that have to do with the high-salaried world of finance?
Surveys have shown that only 10% of millennials in financial services are in it for the long haul – with 48% looking for new roles, and 42% open to them. Couple that with the finding that 1 in 3 job-switchers also change sectors, and this suggests that not only are millennials more a flight risk in your organisation, their departure from the industry could also severely impact your talent pool. And leaders have noticed: 95% said it was challenging to find talented millennial hires.
Could remote work slow personnel turnover?
When it comes to millennials, one of their oft-noted priorities is having a positive impact on the world – in their lives, and by choosing the right businesses to work for or buy from. This means looking for values like sustainability and diversity, but they’re also more aware of their own wellbeing too – with 60% seeking a work-life balance.
Similarly, one survey saw workplace flexibility was the 5th priority for financial services employees – after pay, bonuses, progression, and responsibilities. While the sector traditionally hasn’t been a fan of the home office, the pandemic made remote working a necessity – a reality that might be hard for employees to give up. And since it’s something millennials in particular see as such a perk, employers should consider their next steps carefully.
The pros and cons of remote working in financial services
The pros:
- Remote working, works: 95% of executives saw the same or higher productivity levels from their newly remote workforce, with 75% of employees saying they’re at least at the same levels of output.
- You’ll be in good company: Leading businesses like Deloitte, Barclays, and Lloyds are 6 of the top 10 flexible working employers, with the latter planning to spend £1bn on tech to support remote workers.
- It’s a priority for millennials: with attrition high anyway, due to competitive salaries and long hours, flexible work could be a big tick in your organisation’s box.
The cons:
- Security and data concerns: without the secure networks of the office, or the overview of employee activities that it affords, cyber security and the risk of fraud is a real concern for the sector – though mitigated by continued efforts to advance tech capabiltiies.
- Not everyone is on board: 22% of employees admitted being less productive, with 41% just choosing to work less, 30% struggling with online collaboration, and 30% not being able to access the information they need.
- Wellbeing could be a concern: though not a true depiction of remote working during non-lockdown times, this period has seen employees at risk of mental health issues – with work and home merging in a stressful, unhealthy way.
Employee engagement should lead your decision-making
Employee attrition is a real problem in the financial services. And while workplace flexibility could make millennials more loyal, and seems to be an industry trend that time and money should be invested in, it’s not the only answer.
Only 29% of millennials are said to be engaged, and that’s a problem. Although various research sees fairly positive engagement rates in the financial services sector, letting it slip – especially for millennials – could be highly damaging:
- Disengaged staff make 100x more mistakes – not an option in a high-risk industry
- Finance businesses with low engagement see just 9.1% total shareholder return
- Engagement dips during off-market years anyway, so starting high is important
The best bet for the industry, as we look to the next few months? Bear in mind the preference for remote working but, most importantly, be aware of your employee engagement levels – that’s one way to make sure you can survive any crisis.