Long term initiatives are developing future talent.
Low rates of employee engagement, higher demands for workplace flexibility and the volatility of the job market, paired with a new generation of individuals who look for and expect more personal, customised and intuitive brand experiences. All these trends are putting new pressure on organisations worldwide, forcing them to rethink their talent acquisition and management processes. The investment management industry is no exception.
At last year's Milken Institute global conference, titled “Mega-Trends Shaping Asset Management”, senior executives at some of the most successful asset managers, including Goldman Sachs AM and Blackstone, admitted to having a talent retention problem – especially as a result of the pandemic.
In our conversations with marketing personnel in investment management, we have been hearing the very same concerns. More recently, we've also started to see a great deal of resources and time being committed to discussing and implementing new ways in which firms can attract the best talent, then provide a stand-out experience for employees. Competition is fierce, and the ability to demonstrate a mission-driven and collaborative corporate culture in a fact-driven and authentic way is key.
The war for talent starts at school. Several asset managers are already working closely with universities and graduate schools in developing programmes and group projects that consist not only of educational initiatives built around asset management and investing, but also technical and soft skills, along with networking sessions. They are also developing internships and volunteering programmes that offer individuals the opportunity to learn first-hand and work closely with investment professionals.
The promise of a secure and well-paid job is not enough any more. Asset managers are taking a more expansive view of how they compete for talent: key considerations now include what they stand for as a business, their brand story and how it is articulated, their ability to share a vision and demonstrate opportunities for ambitious talent, how “human-centred” the business is, and the ability to create an environment in which employees want to work and can be their best. In a word: culture.
The same concept is valid for employee retention. According to a 2022 Workhuman* and Gallup study that spanned the UK, US and Ireland, only one in four employees strongly agrees that they feel connected to their culture, while only one in three strongly agrees that they belong at their organisation. These statements were realised by the Great Resignation in 2020/2021, the underlying causes of which make for fascinating reading. According to the Work Institute report, the three main factors driving US employees to leave their companies in 2021 were, in order of importance, career (opportunities for growth, achievement, promotion), job (stress, resources, training, empowerment), and health and family/work-life balance (childcare, health issues, commuting).
Astonishingly, what we do not hear about is how much that cost to employers. According to the same report, in 2021 the costs of turnover to employers exceeded $700 billion, and these costs have more than doubled since 2009.
Investment firms have taken the situation into account and are responding by strengthening internal engagement through multiple initiatives, which often place a heavy emphasis on culture: regular communications, townhalls and social events, ad hoc learning sessions and customised career development programmes, peer coaching initiatives and mentoring, investment in the workspace and inclusion activities all played a part in their talent strategies.
The issue of huge salary pressures undoubtedly remains. However, often it's not about paying more than the next person but the articulation of a fair compensation process and transparency in compensation, so talent stays. Ultimately, it’s about making people feel valued and fairly recognised for their contributions.
If you missed last week's Investment Marketing Scoop, then be sure to click here.
Sources:
From Praise to Profits: The Business Case for Strategic Recognition, Gallup & Workhuman* report
Mega-Trends Shaping Asset Management, Milken Institute 2022 global conference
A Better Way to Develop and Retain Top Talent by Margaret Rogers, Harvard Business Review