Financial service organisations in the UK and Ireland are showing a severe lack of confidence in their ability to retain people critical to their success. Only 40% believe they are effective at retaining high value individuals* with specialist skills and only 50% say they’re effective at retaining future leaders. This is in spite of the fact that most invest in development programmes for their key people.
The survey of 200 senior managers** was undertaken by talent and career management consultancy Right Management, part of ManpowerGroup. Mark Hodgson, Practice Leader of Talent Management in Right Management, comments: 'Development practice should be a critical part of how organisations retain their key people. The results suggest a lack of creative thinking in the way development programmes are structured'.
Fifty per cent of financial service organisations say they are effective at retaining their future leaders – but only 2% say they are very effective. Forty per cent believe they are effective at retaining high value individuals – but only 7% say they are very effective. The financial services sector scores lowest on both counts in the Right Management survey that reviewed performance in three key sectors (energy & utilities, pharmaceutical as well as financial services).
'Development practice is an important part of how organisations retain their key people but success is determined by detail. Achieving the right blend of development activity is critical. Worryingly financial services organisations are placing the majority of their investment solely in traditional development programmes instead of blending this with experiential development opportunities such as stretch assignments, secondments, coaching and mentoring. All of which in our experience are far more effective for developing high potential people who learn best by doing', said Hodgson.
Hodgson continues, 'Of all the sectors we surveyed financial services has the biggest problem retaining key talent. At a time where the sector faces such high profile scrutiny the organisations that find the most creative way of keeping people engaged with their organisation will really differentiate themselves from their competitors. When trust is at an all time low in financial service organisation it is the quality of their people that will make the difference between survival or prosper'.
Despite a high level of investment in development programmes, only 38% of senior managers in financial services believed these critical individuals are being developed in such a way that will help their organisation achieve its business objectives.
The survey also shows that across the markets 36% don’t measure their success in retaining high value individuals; 25% don’t measure success with retaining their high potential, future leaders. Where measurement does take place, organisations use retention rates, appraisals and the rate and numbers of promotions. Performance is assumed and not confirmed, says Hodgson
Hodgson also believes that current practices are of particular worry for businesses trying to create leaders with the kind of skill sets required for global challenges. A global Right Management report***, released this month, identified the six intercultural competencies essential for leading multinational organisations. The top three competencies were an ability to adapt socially, to demonstrate creativity and having an even disposition.
'Traditional thinking on how best to develop people will not create leaders with that range of competencies. Companies need to demand that their suppliers and partners are much more creative when helping them develop critical people in a very challenging business environment'.
Another key cause of the lack of confidence in retaining key people is the reduction in the number of job levels across industry. Forty six per cent of financial service organisations believe now have fewer management levels than five years ago. Overall, 90% of respondents believe there are real disadvantages in a flatter structure because of a reduced number of career opportunities. They believe flat structures make it much harder to retain staff.
Hodgson concludes: 'The organisations we spoke to seem aware of the risks of losing talented people but are also determined to continue using the same approaches to develop and retain them even when there is no evidence that their programmes are working'.