What banks need to know about hiring in a highly competitive environment
How can banks and other firms assess intrinsic traits—which can account for big variations in performance—to tap into great talent?
The talent that banks are seeking—people who can help the institution build the digital, automation, and analytical capabilities they need to succeed today—is in high demand. Banks are competing not only against other banks but against all firms seeking a sustainable talent advantage.
Of course, hiring talent is only one side of the talent coin: Banks will not succeed unless they also develop their current employees through reskilling and upskilling programs. But improving the hiring process is a necessity for banks.
When drawing from sources that haven’t previously been used, assessing candidates well becomes more important than ever. And evaluating them based on prior experience isn’t enough. One financial services firm found that for candidates in one of their two primary sales roles, prior sales experience had no impact on performance. For these jobs, which focused on renewals as opposed to new sales, certain personality traits were far more indicative of success. For some roles, who someone innately is can matter more than what’s on a resume.
Furthermore, traditional means of judging a candidate’s readiness for a role should be re-examined in the search for new talent. One branch of a financial services firm—which happened to be located in a city with several colleges and abundant graduates—had made it a practice to focus their search on candidates with college degrees or advanced degrees. But they eventually found that candidates with associates degrees were more motivated and outperformed—and outlasted—those with full degrees.
In that light, it’s worthwhile to revisit the importance of intrinsic traits. Our research suggests these characteristics, coming from within the person, such as personality or motivations—can account for 5 to 20 per cent of the variance in performance. For roles with historically high attrition rates, being aware of this fact can make a big difference.
How can companies assess intrinsic traits? We start by pinpointing what characteristics matter most for high performers by role within the organization. (The answers can be counterintuitive: at a fast-food chain, we found that extroverted sales associates decreased customer satisfaction scores—customers tend to favour speedy and accurate service over extroversion.)
So what’s the first step for a bank considering assessments to tap into unexpected talent sources? Look inward at its mission and values to ensure that new hiring processes align with both. The company should pinpoint what a good employee looks like to better assess applicants for ideal traits, use pilot assessments, track impact and refine over time to continuously improve the candidate evaluation process.
It’s also crucial to foster an inclusive environment that celebrates diversity and varied experiences are key to success. Without such an environment and a recognition of the contributions of applicants with diverse backgrounds, new employees may not feel accepted within the organization. This is even more crucial when focusing on hiring applicants with a history that is often stigmatized in the workforce.
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