Finance Talent Management: Reducing Employee Turnover in Finance
WHAT DEFINES A GOOD LEADER? LOOK FOR THESE SIX QUALITIES
Modern business challenges can require new approaches. Leadership will need to evolve in order to continue to guide organisations in tomorrow's world of work. But what are the characteristics of a good modern leader in the workplace - and how can organisations develop them?
Many studies draw parallels between effective leadership and solid organisational performance. But whether they’re a junior manager or a senior executive, the qualities that leaders need are changing.
Nearly 1,500 HR professionals ranked leadership development as the number one priority for 2025, with managers feeling 'overwhelemed' by the expansion of their responsibilities. In today’s unpredictable world, you must combine traditional leadership skills with new abilities. So, what does an effective modern leader look like?
1. Remember what makes a good leader
Before looking at the new skills future leaders may need, it is worth reflecting on what a leader actually is.
What are the qualities of a good leader? It’s not what you may think.
Being in charge of colleagues does not necessarily make you a ‘leader’. Former Facebook COO Sheryl Sandberg explains: “Leadership is about making others better as a result of your presence and making sure that impact lasts in your absence.”
Retired astronaut Chris Hadfield believes that good leadership is: “Not about glorious crowning acts. It’s about keeping your team focused on a goal and motivated to do their best to achieve it. Especially when the stakes are high and the consequences really matter.”
There may be varying opinions on the strengths and weaknesses of leaders. But overall, most people believe that great leaders motivate their team members to perform their best and achieve common goals.
What traits do you need to achieve this in the modern workplace?
2. Use blended leadership styles for a VUCA world
Stacey Philpot from Deloitte Consulting maintains that the core skills needed historically in leadership roles have remained unchanged.
“These skills allow someone to become a leader faster than their peers. This is even true in today’s volatile, uncertain, complex and ambiguous (VUCA) environment,” she says.
The core skills for leading in a VUCA environment include:
- Pattern recognition
- Motivation
- Agility
- Emotional intelligence
- Ability to understand, control and express emotions
This represents psychological assessments of 23,000 senior leaders globally over the past 25 years.
Consider introducing servant leadership:
Leaders need new styles of leadership to deal with changing cultures. Being comfortable with not having the answer and owning failure can create an environment of trust and openness.
Collectively, these behaviours form ‘servant leadership’. The Chartered Management Institute (CMI) defines servant leadership as emphasising behaviours and values such as:
- Active listening
- Empathy
- Leading by example
These are instead of opting for a more authoritative, ‘command-and-control’ leadership style. Leaders create the conditions for team members to excel by displaying vulnerability. But given the stigma around servant leadership, how can organisations encourage it?
How to combat stigma surrounding servant leadership:
Alsu Polyakova, HR Leader for GE Healthcare, says reducing stigma around servant leadership will take a specific strategy. Most importantly frequent performance appraisals for leaders.
“We give leaders lots of opportunities for self-reflection, so they understand how they behave,” she says. GE Healthcare’s most successful leaders help to encourage behavioural change, Polyakova says. The company measures success by how well employees rate leaders on achieving GE Healthcare’s ‘cultural pillars’. These pillars include inspiring trust and empowering employees.
3. Create a culture of trust in the workplace
Gaining workers’ trust is more important than ever. One way to build trust is for leaders to take action on issues such as climate change. 71 percent of employees consider their CEOs’ social awareness as critically important, according to the Edelman Trust Barometer.
Social awareness may yield rich rewards. The Edelman poll shows that workers who trust their employers are far more engaged and remain more loyal than their more sceptical peers.
Leadership styles are clearly changing. The most effective leaders will need to tailor their styles to suit different scenarios, says Professor Sattar Bawany. “Leaders need a broad repertoire of management styles and the wisdom to know when each style should be used,” he says. “In crisis scenarios like cybersecurity breaches, for example, leadership should be authoritarian because the scenario is unstructured.”
4. Adapt your leadership style for different generations
Managers must also balance leadership styles to suit different generations. Modern workplaces will soon house up to five generations under one roof. Therefore, there will be many people with differing preferences on leadership style.
As of 2023, millennials are the biggest group in the UK workforce, at 35 percent. Modern leaders must mix old and new leadership styles that meet the needs of younger generations. Doing so will future proof organisations. However, new leadership approaches cannot come at the expense of alienating older workers.
5. Commit to lifelong learning
With the workplace evolving so rapidly, leaders cannot rely on past experience alone to get by. Ben Farmer, Head of HR at Amazon UK agrees: “Experience is not always synonymous with wisdom and judgement. And naivety doesn’t always engender novel thinking and openness to change.”
Organisations should look for leaders who understand the future as well as those with experience. “Success comes from the ability to combine understanding of exciting, new trends with the experience required to put that knowledge into action,” says Farmer.
But what is the right balance? There is no one-size-fits-all approach when balancing experience with adaptability. Achieving the right balance will mostly depend on the organisation and the sector it operates in.
6. Be conscious of culture
Organisational culture is an important factor. Risk-averse firms may prefer experience over novel thinking. Leaders may be fearful of a backlash from stakeholders should novel thinking fail. To lower risk, companies should seek leaders who use both scientific evidence and intuition when making decisions.
Ultimately, there’s no single blueprint for an effective modern leader. Each organisation must tailor their approach to leadership development. There must be a focus on organisational culture, industry nuances and employee mix.
But above all, leaders should recognise that today’s reality may be old news tomorrow.
For more expert advice, take a look at the following articles:
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Finance talent management: reducing employee turnover in finance
If you work in finance, you are probably already aware of the heightened rates of employee turnover across the sector. Indeed, across the whole EMEA region, the results of our 2024 Hays Salary Guide surveys showed that 78% of all workers in the BFSI sector across the region changed companies last year alone.
In the same studies, 23.44% of all BFSI employers across EMEA named “limited budgets” as the main factor limiting their business growth last year, closely followed by "a shortage of skilled professionals in the market” (22.46%). Sought-after finance professionals know their worth and know the demand, particularly those with the skills needed to support digital transformation. Even in times of economic uncertainty, these people are not afraid to leave for more favourable conditions elsewhere.
Established financial institutions are racing to leverage cutting-edge technologies like AI, blockchain, Machine Learning, and Big Data analytics. When it comes to talent, the issue is that these organisations are competing for the required skills with FinTechs, Neobanks and Crypto exchanges which are more ‘digitally native’ and can appeal more to professionals looking for exciting projects and organisations with innovative reputations.
Organisations looking to retain their sought-after talent could do so by offering salary increases, but when that’s not possible they must look beyond the pay packet to satisfy their prized assets.
So, first, we will look at the potential impacts of talent attrition in the BFSI sphere and then explore what matters most to these professionals in order to keep them satisfied and motivated where they are right now.
The effects of high attrition in finance talent management
In general, high attrition rates have several detrimental effects on the well-being of organisations beyond the loss of knowledge and skills, from increased staffing costs to drops in morale amongst remaining employees.
For BFSI companies in particular, high employee turnover poses two main challenges:
1. Hindering innovation
It is normally assumed that new hires boost innovation as they bring fresh perspectives and ideas to the table. However, experienced employees leaving can dampen this innovation. Exiting employees do not only take with them their specialised skills, but also valuable knowledge about processes and possibilities within the company’s operational set up. The loss of such insights into company processes and operations makes it harder to turn ideas into realities, ultimately hindering an organisation’s ability to innovate, adapt quickly to market changes, and maintain operational efficiency. In the BFSI sector, where there is such competition between intricate and progressive financial products, losing seasoned professionals can significantly impact decision-making as well as companies’ bottom lines.
2. Risk and compliance
In the heavily regulated BFSI sphere, where it’s so critical to properly adhere to multiple regulations, exiting employees may cause their companies compliance issues if the processes are not properly managed. Without proper exit procedures, there’s a risk of data leakage or misuse that can jeopardize client trust and lead to severe legal consequences.
Other compliance and reputational threats can also come from losing essential expertise in areas like the Anti-Money Laundering (AML) and Know your Customer (KYC) fields, which are vital for safeguarding the integrity of financial systems at large.
Finance talent retention - giving them what they want
The EMEA Hays Salary Guide surveys cited earlier gathered key insights from business leaders, hiring managers, employees, and job seekers across the region to elicit what’s most important to finance professionals today. Salary is obviously the number one factor, but the companies that understand the other priorities, wants and needs of their talent hold the keys to Retention.
So, what did our respondents tell us?
1. Flexible work schedules:
42% of EMEA BFSI employees say “flexible working” is the most important non-monetary benefit when choosing an employer. BFSI workers prioritise autonomy and the freedom to build their own schedules. Companies can enhance job satisfaction and employee loyalty by including options for remote work, flexible hours, or even compressed working weeks.
2. Professional development opportunities:
40% of EMEA BFSI workers selected “career development initiatives” as one of the reasons for changing companies last year. Interestingly, 80% of workers reported interest in getting AI training, but just 10% claimed to have received it from their employers. Especially for the more traditional BFSI organisations competing with Neobanks and FinTechs, it could be wise to show commitment to keeping workers ahead of the curve with the latest innovations to avoid losing them to organisations that place innovation at the heart of their employer branding efforts.
3. Competitive compensation and benefits:
Unsurprisingly given the cost of living increases last year, the main reason that EMEA BFSI workers changed jobs last year was to get a higher salary. However, the second reason for 46% of those respondents was the overall “benefits package”. For finance organisations who cannot afford to match the salaries of organisations looking to hire their key professionals, offering attractive non-monetary benefits can really help. In particular, the more established organisations can leverage their connections to build partnerships with other organisations to provide perks like health insurance, wellness programs, meal cards, and substantial discounts for gyms, shops, and travel.
4. Positive company culture:
40% of EMEA BFSI workers who left their companies last year did so for a better “work atmosphere”. It might sound obvious, but companies need to work hard to create environments that people want to work in. This is especially pertinent for workers from different backgrounds, for whom a supportive and inclusive environment is essential. Companies should pay real attention to mental health as well as recognizing and rewarding employee achievements and promoting a healthy work-life balance for all.
Talent retention in the BFSI sector is a multifaceted challenge that requires a comprehensive talent approach. The insights in this blog should prove helpful for your financial services talent retention, but these need to be built into a joined-up strategy to really strengthen your employer value proposition (EVP) and keep your brightest talent on the payroll instead of having to find key finance talent all over again.
ABOUT THE AUTHOR:
Jon Mannall
EMEA Managing Director, Enterprise Solutions at Hays
Jonathan is the EMEA Managing Director for Enterprise Solutions at Hays. Previous roles held at Hays included Service Delivery Director, Head of Sales for the UK and Global Head of Sales, Solutions and Innovation. He is now responsible for leading our teams across 11 countries in EMEA and evolving our approach to engaging, delivering and developing our strategic client relationships across the region.
Prior to joining Hays, and after completing his Masters in Philosophy and Management, Jon worked in the RPO and MSP sector for 10 years with a range of Financial Services, Public Sector, IT & Telecommunications, and Insurance clients in Sales and Operations Director roles.
Prior to joining Hays, and after completing his Masters in Philosophy and Management, Jon worked in the RPO and MSP sector for 10 years with a range of Financial Services, Public Sector, IT & Telecommunications, and Insurance clients in Sales and Operations Director roles.