Bangkok--29 Apr--PwC Thailand
A hybrid skills shortage threatens growth as 78% of CEOs now look for a much broader range of talent, a PwC report says.
Nearly three-quarters (70%) of global chief executives in the financial services sector see the limited availability of key skills as a threat to their growth prospects, which is up from 59% last year, PwC says. Even so, few CEOs have a true grasp of the challenge at hand in dealing with it.
The report, A new take on talent, which is based on interviews with 410 FS executives in 62 countries, showed that the disruptive impact of new technology, more complex regulation, and rising competition is prompting demand for more diverse and hybrid types of talent in the industry.
Sira Intarakumthornchai, Chief Executive Officer for PwC Thailand, said that technology is expected to emerge as the most significant industry that will compete with banking, insurance and asset management businesses in the years ahead.
This change means that FS leaders need to rethink their diversity strategies now in order to attract talent, improve their ability to innovate, and to enhance overall company performance.
“Today’s CEOs can no longer run their business in one rigid dimension,” Sira said. “For the whole industry to stay competitive and survive, business leaders in financial services need to be able to look in different and diverse places for talent.
“A company that continues to recruit only people with the same expertise and same degrees without embracing various other types who have a wide range of skills and multi-industry experience would become irrelevant, and is likely to lag behind those players who are more equipped with hybrid capabilities.”
The PwC report shows that FS companies don’t appear to have the talent they need to succeed. Although more than half of FS business leaders, particularly those in asset management sector, are planning to increase their headcount over the next year, only 5% are confident they can secure all of the necessary skill sets. Concern over the availability of skills has also risen from less than 50% in the survey three years ago.
According to Sira, CEOs have increasingly recognised the need to find new types of talent for their organisations. In fact, 78% of FS leaders are now looking for a broader range of skills when hiring than they did in the past. Some 58% say that they have a strategy in place to promote diversity and inclusiveness, and a further 20% say they plan to adopt one.
With the disruption caused by technology, changing customer behaviour and a new breed of tech-enabled rivals, securing the right people is not an easy task, he said.
Employees with combined digital and industry-specific skills, for instance, are tough to find because the sudden demand for more people in areas such as technology, customer service and risk and compliance has created inevitable shortages.
Even worse, the eroding image of the global FS industry in recent years, together with dwindling funds for rewards and bonus caps, creates pressure. Higher compliance costs have also contributed to the difficulty for leaders to compete with non-FS industries when trying to hire wisely.
As the FS sectors within the emerging markets of South America, Asia, Africa and the Middle East continue to expand, buoyed by continuous fund inflows, CEOs are expected to take more active steps towards cross-cultural diversity.
“With more than half of graduates aged 25-34 likely to be living in lower cost emerging markets by 2020, we expect more industry leaders to increasingly tap into this vast talent pool,” Sira said.
Changing demands within the sector also mean that employees with breadth or all-round expertise rather than depth of knowledge will be most sought by organisations, creating more flexible and customer-centric experiences.
“These people may lack specialist product expertise but their broader skills mean they are better able to move between clients, countries and assignments with flexible technical skills and multi-industry experience,” he said.
Looking ahead, nearly half of FS leaders plan to enter into a joint venture or strategic alliance in the coming year, with almost 40% seeing alliances as a way to access new technology.
The challenge, however, is how CEOs and HR teams make use of technology such as data analytics to obtain better insight into how skills are being deployed within their organisation. Other uses of digital technology include the effective surveillance of illicit behaviour which would also improve the company’s ability to detect fraud and misconduct.