By Rob Jones, COO and UK CEO, UpSlide
The investment banking industry is facing a battle for talent. New generations of workers are bringing with them fresh ideas and expectations of workplace practice. Firms have therefore started to consolidate their recruitment and retention strategies, with some banks such as Citi going as far as to offer their junior staff the opportunity to work abroad in an attempt to boost mental health and work-life balance.
When employee wellbeing and ‘banker burnout’ continue to dominate the headlines – and recent industry research reveals that 86% of bankers have felt forced to take time off due to stress – it’s clear that this is what firms need to prioritise.
There are three core focus areas that will help investment banks stay on track.
Adopting an employee-first culture
There’s a big opportunity for investment banks to differentiate themselves by keeping employees at the centre of business priorities.
Worker expectations and demands are changing – financial incentives don’t hold as much weight as they used to, and focus has now shifted to wellbeing efforts.
UpSlide’s research shows that employees fail to use all allocated annual paid time off due to fear of unbearable workloads on return (33%), and fear of falling behind at work (34%). But despite these concerns, over four-fifths of employees feel forced to take sick leave to recover from workplace stress.
The rise of burnout has become so severe in some cases that bankers consider leaving the industry just to avoid it.
However, banks have already started to recognise the changing expectations of prospective and current employees, and support systems are being introduced to reduce the high levels of burnout, and boost employee retention. Some examples include preventing working over the weekends, additional mental health initiatives (which ranked highest in employee priorities), and establishing ways of boosting productivity.
It’s a promising start, as just under half of our survey respondents (43%) say they are very satisfied with existing initiatives. However, only 4% of bankers said they wouldn’t want to see any additional support systems in place – so there’s clearly more to be done.
Revolutionising processes with tech
It’s common practice within many industries to delegate the more manual tasks to junior workers; in the case of investment banking, this includes making repetitive changes from spreadsheets to presentations, going through each with a fine toothcomb to check for accuracy – often taking them into the late hours of the day. This way of working has long been seen as a way for juniors to earn their stripes.
However, we now we have the technological solutions to automate these manual processes, which means junior workers can spend more time on value-add activities.
Currently, nearly one third of bankers spend 31-40 hours a week on manual tasks. When put into context of annual salaries and contracted hours, the amount of time spent on these activities can equate to approximately $2,128 per week for an Analyst.
Further, over 40% of investment bankers feel they would ‘very much benefit’ from a tool to automate tasks in Microsoft Office, and only a mere 1% do not feel such a tool would be of any value. This numbers paint a very clear picture.
Being open to change
A new generation of junior bankers are bringing new ideals and expectations with them into an industry of long-standing practices and traditions. Based on the evolution of the modern workforce, it’s possible that some of these well-established processes need to be re-evaluated.
Above all else, this next step requires a change in mindset. As it stands, workers have made it clear that they want to spend more time working on high value activities, yet 80% feel that the manual, repetitive tasks they currently work on are part of their ‘rite of passage.’ If the senior members of the firm went through this, then so should they.
The ambitious junior employees starting out in the world of investment banking are keen to contribute to the higher value work, including spending more time with clients, getting involved with more creative tasks such as the ideation process, improving their financial modelling skills, and taking part in extra training. However, for those who feel dissatisfied with their current role, attention quickly turns to other industries that could offer a more varied and interesting work agenda. For example, 40% of employees looking for a change are considering moving to the technology sector, while 36% look favourably upon cryptocurrency as a fresh start.
Given that 76% of bankers admit they would consider a lower salary in favour of a better work-life balance, it’s clear that high wages and increasing bonuses are not enough to keep them on side.
Now more than ever, loyalty lies with the firms who demonstrate genuine investment in their workforces.
Well-established practice is not easily cast aside, and it’s not something that will happen quickly. But immediate steps need to be taken to remain competitive in the battle for talent. When only 2% of bankers believe they have a good work-life balance, banks need to turn their attention inwards and review processes and work practices to see what they can do to evolve to meet incoming expectations.
Business-wide evolution requires business-wide buy-in. Getting stakeholders on board with cultural change is arguably the biggest challenge to overcome, but given that improvements to employee practice also benefit day-to-day processes, there is a clear business case for change.
Let the talent battle commence
A final point to consider is that it’s also extremely costly having to replace and retrain workers when members of the team leave. On average, the total cost to replace and re-train someone can equate up to nine months of an employee’s annual salary, taking into account recruitment, retraining, and general productivity loss. Given that the average base salary of an analyst ranges from $100k – $125k, with total compensation as high as $250k, that equates to around $187k per junior banker.
Adopting and maintaining an employee-first mindset, revolutionising processes with technology, and letting go of old practices is how investment banks will gain that competitive edge in the recruitment race.
For example, upgrading legacy tech that can no longer keep up with the demand of the industry with more modern automation tools will boost productivity and general operational efficiency, in addition to improving employees’ day-to-day job satisfaction – contributing directly to the business’ bottom line.
It’s a fight – and a race – to reach the talent pool before competitors, and only the most adaptable will win. However, by demonstrating commitment to innovation and employee satisfaction, investment banks will earn themselves a sizeable head start.