Walid Youssef, head of financial institutions at Travelers Europe, discusses how clients can protect against struggling to attract and retain talent
In the UK, people are resigning from their jobs at rates not seen before since 2009, but many of these workers aren’t simply moving on to more appealing positions with new employers. According to Sanjay Raja, chief UK economist at Deutsche Bank, elevated levels of workers are leaving the labour market entirely.
Financial institutions are far from alone in having to manage the strains of this “Great Resignation,” which has taken root around the world and across sectors. However, these organisations are feeling the challenges differently than organisations in other sectors might, and are facing different risks.
But financial firms need employees who have specialist skills – however those skills are even more difficult to source and retain now that organisations of all kinds are short-staffed, in addition this there is an increase new flexibility and benefits to attract talent being offered.
This has changed the risk environment for financial institutions.
But, the lack of available skills within an organisation can negatively impact productivity.
With many businesses looking to compete for the same talent, this can lead to unexpected increases in expenditure for hiring and training in order to attract the most skilled individuals. If a financial institution has fewer staff than it should and has a greater demand for its services, it could also experience an increase in negligence claims on top of the other challenges.
To manage these pressures, it is likely that we’ll see more consolidation ahead.
There has been an unprecedented level of mergers and acquisitions (M&A) in the last two years and this is unlikely to stop in 2022. More M&A often leads to increased claims due to breach of warranty or misrepresentation, or incorrect valuations.
We’re keeping an eye on M&A developments in the market, but brokers can help their clients anticipate some of the risks associated with consolidation and minimise their exposures.
As clients navigate the changing workplace, brokers can also be a sounding board for those who are making changes in order to retain and engage staff. While there does seem to be an air of eagerness within financial institutions to return to the office, there is also a need to strike the right balance between that and offering a flexible or hybrid work model.
The thirty UK companies taking part in a six-month trial of a four-day work weekthis year may have some lessons to share about the rewards as well as the risks of the change. We currently insure a bank that has switched to a four-day work week to retain staff – so far the response has been really positive. It will be intriguing to see if this is the start of a new trend for financial institutions.