Look around your office. How many young professionals do you see? If you’re like most banks and credit unions, the majority of your employees are over the age of 40. Accenture estimates that industry-wide, 60% and 65% of all bank employees are older than 40. But by 2025, Millennials will make up 72% of the global workforce, according to E&Y. Understanding how Millennials think and then making the necessary changes to your organization’s culture will be critical.
Look Beyond the Millennial Customer
An aging workforce is a problem that has been growing for almost a decade, yet one that’s received little attention. While age often comes with wisdom, an older workforce can hamper your institution’s growth and its ability to compete with other banking providers (not to mention those scrappy fintech firms that offer innovative banking solutions that tend to really resonate with younger consumers).
There’s a lot of discussion in the banking industry about how banks and credit unions can attract the next generation of customers — Millennials and Gen Z — but a lot less talk about the importance of younger employees in this strategy.
Reality Check: If you want to appeal to a specific demographic group, it makes sense to include that demographic segment on your payroll.
Who better to understand what Millennials want than a Millennial? And who better to advocate for the products and services that Millennials desire (think: peer-to-peer payments, mobile banking, and digital wallets) than Millennials? It probably isn’t going to be someone who spent their 30-year career working in silos and protecting sacred cows. It takes healthy quantities of optimism and energy to find and develop innovative ways to engage today’s digital consumers.
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The Search for Youth
1 out of 10 Millennials say they wouldn’t work in banking because the industry has a negative image.
Unfortunately, young talent is hard to find… at least in banking industry. Between 2008 and 2014, 50% less of students who graduated from MBA programs at Wharton School and Columbia chose a career in banking. By comparison, during that same period, the percentage of MBA graduates pursing careers in the technology field tripled — much more sexy.
The 2016 Compensation Survey from Bank Director found that one-third (33%) of banks say that although they are actively trying to recruit more Millennial employees, they are coming up short.
When you look at the responses by asset size, it’s clear that the playing field isn’t even. The smaller the institution, the harder it is for them to attract younger employees: 43% of those from community banks with less than $250 million in assets complain that they are having a tough time recruiting talented Millennials.
Key Fact: One-third of banks say that hiring Millennials is not a focus area for their bank.
Only one-third of retail financial institutions say that they have a recruiting plan in place to attract Millennials and are satisfied with their results. But again, size matters. The smaller the institution, the less satisfied they are, with only 28% of the smallest banking providers saying that their recruiting efforts are paying off.
Are Too Boring For Millennials?
Among financial industry executives who say they are satisfied with their Millennial recruiting efforts, the majority (71%) attribute their success to creating a culture that makes Millennials feel comfortable and welcome. And for those banks and credit unions that struggle, the top reason given is that Millennials simply “aren’t interested in working for a bank” (60%). More than half (54%) say it’s because the bank’s culture is “too traditional.”
There may be other reasons gnawing at the Millennial worker’s soul. In light of the Great Recession triggered by the financial crisis after the housing bubble popped, banks don’t have a stellar reputation. As the crisis unfolded, Millennials were — in their youth — very vulnerable and impressionable. The greed and indifference banks exhibited left a dark, lasting stain on the financial industry, one that Millennials won’t soon forget. How many Millennials want to be part of a system that willfully destroyed families and brought the world to its knees?
Millennials have different goals and different work styles than the Gen X and the Baby Boomer employees who make up the majority of your current workforce. What gets Millennials most excited (besides salary and bonuses that everyone loves)? They want opportunities for advancement, a challenging work environment and flexible schedules.
5 Strategies to Attract Retain Millennial Employees
1. Mimic What’s Best About Start-ups. Millennials are interested in working for companies that are agile, and they want to gain experience in a variety of responsibilities. You can’t remake your organization into a tech startup with a flat corporate structure, but you can offer Millennials the ability to work on a wide variety of projects. Forget a career ladder in which you move vertically up through the organization, and instead create a “career network” that exposes younger employees to multiple aspects of the bank.
2. Stand Up for What You Value. As a generation, Millennials care about social causes and will even evaluate your bank or credit union based on its level of social responsibility. Prove you are worthy of Millennials by highlighting the social causes your organization supports and how you help the communities in which you do business. For smaller banks and credit unions that have a harder time attracting Millennials, highlighting your community roots is especially important.
3. Compensation Goes Beyond Money. Yes, offer competitive salary and bonuses (especially important to a generation that feels saddled with a heavy student debt burden), but Millennials look at the entire compensation package. Flexible work schedules, telecommuting, time off for volunteering, peer recognition and incentive awards can help Millennials feel valued beyond the dollar amount on their paycheck.
4. Showcase Up-to-Date Technology. Millennials are digital natives who consider mobile devices as indispensible appendages — just as important as their arms and legs. They won’t be happy working on platforms that were developed before they were born. Equip Millennials with smartphones and tablets, and make sure your employee and customer-facing technology looks more 2017 than 1997.
5. Get to the Point. Millennials were raised in a time of fast food, immediate gratification and instant downloads. As a result, they are notoriously impatient. Ditch the long, drawn-out meetings and hold short, standup meetings only as needed. Or, if you can, just put the information in an email. (Gen X and baby boomers may be saying a silent ‘thank you’ as well.)
Bottom Line: Banks need to attract younger customers to survive. But don’t just focus your efforts externally. Think about how you will cultivate the brand and create the culture you need to attract and retain the younger employees as well.