The power to perform: Human capital 2020 and beyond - Financial services is being transformed. How can you optimise your human capital today ...
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Financial services is being transformed. How can you optimise your human
capital today, while building for tomorrow?
The power to perform:
Human capital 2020
and beyond
www.pwc.com/hc2020
Contents
3 Foreword
4 Overview
8 The issues reshaping FS sectors and their human capital
implications
12 The way forward: Priorities for action
30 Conclusion: Leading from the front
32 Contacts
Foreword
In the face of political upheaval, fast-shifting customer expectations, and
technological and regulatory disruption, the question is no longer whether
financial services (FS) is being transformed, but how quickly, how to keep
pace, and how to deliver strong business results in this new environment.
In an earlier paper, we analysed the impact of these transformational developments
on operational and organisational models in FS, including capabilities, decision
making and reporting relationships1. In The power to perform: Human capital 2020
and beyond, we focus on how these developments are shaping a new people agenda,
and set out how FS organisations can proactively manage human capital to ensure
they remain relevant and competitive.
The challenge of disruption
Financial services is facing huge disruptions – political, regulatory and technological.
And with this comes the need for ...
• New skills
• An innovative and agile mind-set
• And new ways of attracting, motivating and organising your people
How can you ensure you have the – human capital – you need to succeed?
1 Equipped for the future: Re-inventing your organisation (http://www.pwc.com/gx/en/industries/financial-
services/publications/equipped-to-compete.html)
Human capital 2020 & beyond | PwC 3
Priority one
Rebuild trust and redefine employer brand to
attract and retain tomorrow’s workforce
Overview
2020 trend • F S industry reputation continues to suffer
across a broad range of stakeholders,
including talent, clients, regulators and the
general public
• E mployee preferences are evolving (e.g.
desire to work for socially-conscious
organisations), and the lines between
personal and professional life continue to blur
Financial services is being
• T alent will readily switch to another
transformed, and with it the talent organisation that better aligns to their values,
FS organisations need to succeed, or if their experience of working for the
where they come from and what they organisation does not line up to the initial
promise
want from their careers.
By 2020, the make-up of the workforce
and how it’s recruited, organised and
rewarded will look very different from
today. In turn, the role and function of
HR will have been overhauled. How
can FS organisations make sure their
workforce strategies, and how they are
executed, are fit for the future?
Human capital • R
evitalise organisational purpose and
Drawing on our examination of employer brand to align with evolving
competitive developments within FS,
strategy stakeholder expectations in key areas
including career paths, diversity, flexibility and
we’ve identified seven key priorities for
delivering value to society
optimising talent – or human capital –
• Implement programmes and embed
today, while building for the future: behaviours that reinforce the redefined
culture, employer brand and sense of purpose
uild an effective risk culture to help re-
• B
establish trust with customers and talent, and
meet changing regulatory requirements
4 PwC | Human capital 2020 & beyond
Priority two Priority three Priority four
Develop dynamic workforce supply/demand Maximise the potential of digital ‘talent Influence redesign of academic curricula and
models to prepare for the workforce of the exchanges’ to promote a better match modernise corporate learning & development
future between talent ‘buyers’ and ‘sellers’ to build an adaptive workforce
• L abour arbitrage and industry disruption • Increasingly competitive market for top • C
oncerns over the lack of people with key
will forge a workforce that is increasingly talent will shift the job selection power to the skills and the right combination of capabilities
versatile, mobile, digital and automated employee • R
eturn on investment from some university
• B
usiness strategies will shift to take • S ocial media and job rating sites are education continues to be challenged
advantage of changing market dynamics. expanding access to information about • A cademic institutions need to transform
Speed of deployment, ability to flex workforce prospective employers and influencing learning curricula to meet new workforce
plans, and adaptability of talent will be critical decisions on whether to apply for and take up skills and mind-set requirements
for organisations to keep pace and compete roles
• O
rganisations will be challenged to create
• F S organisations will increasingly tap into • G
rowing demand for employer/employee meaningful development opportunities for
alternative sources of talent (e.g. contingent transparency and information sharing staff all through their careers
workers) to help drive workforce flexibility throughout the recruitment process
• A review and rethink of traditional learning &
• O
rganisations will need to provide candidates development (L&D) models needed to create
with greater access to information about the a more immersive learning environment, and
business, its aims and what the role really drive employee skills development through
involves to compete for the best candidates the course of their careers
• Increased transparency will empower both
employers and employees in the selection
process, and foster a closer cultural fit
• Implement strategic workforce planning to • E ngage in transparent, technology-enabled • B
uild capabilities to perform and lead in the
better anticipate and plan for a variety of talent marketplaces where two-way new marketplace including technological
scenarios and changes to strategy employee/employer feedback is provided skills, capacity for innovation, emotional
• E nhance dynamic workforce modelling (e.g. former employees provide reviews, intelligence and the ability to adapt to
capabilities to enable proactive redeployment employers rate employees) different cultures, constant change and
of talent and better connect business needs • D
evelop talent communities to connect with an environment of volatility, uncertainty,
with the required talent candidates and keep them up-to-date with complexity and ambiguity (VUCA)
• A lign business and workforce strategy by company news, events and opportunities • F ocus on building ‘multi-hatted’ talent with
promoting integration between HR and other • P rovide meaningful and immersive pre- combined business, technical and regulatory
areas of the business (e.g. Finance and IT) employment visualisation and experience acumen to enhance cross-functional
through gamification, virtual reality, execution capability and credibility
• R
ecruit and develop talent with multiple skill
sets, which can adapt to a variety of business shadowing, and short-term trials (i.e. ‘day in • C
hallenge traditional L&D models and begin
scenarios the life’ preview) employee development earlier through more
• M
aximise potential of gamification and immersive programmes ahead of graduation:
• E stablish internal mobility processes enabled
by technology (e.g. talent marketplaces) psychometric testing to better understand – A pprenticeships within companies for
candidate skill sets, attributes and cultural fit students
• Implement compliant contingent workforce
management processes • D
evelop programmes and processes for – Influence curriculum design via
outplacement to strengthen cultural fit partnerships with universities, including the
development of customised programming
to match company needs
– P romote lifelong learning and adaptability
through regular re-skilling to meet changes
in market events or business model
• R
each out to non-traditional sources of
talent such as more people taking vocational
courses rather than full degrees
• R
evisit corporate training programmes, and
augment with open online courses and other
externally available content
• V igilant tracking and transparency around
L&D, supported by real-time feedback and
technology-enablement
• D
esign and implement career paths outside
the organisation to provide new experiences
(e.g. one-year rotation in a FinTech business
and back into the FS organisation)
Priority five Priority six
Digitise the workplace to fuel increased Integrate human capital data analytics in
workforce productivity priority business decisions
2020 trend • R
obotics and artificial intelligence are • M
any FS organisations lack the robust
replacing repeatable, transactional tasks, both analytical capabilities needed to make
those facing the customer and the employee meaningful use of workforce data
• A utomation of work is commonplace; • Increasing volumes of workforce data and
business process management solutions and integrated technology platforms will enable
cloud-based HR technologies are automating major advances in workforce analytics,
formerly manual tasks (on-boarding, including:
recruitment, workload management, – P redictive analytics to identify skills and
performance reviews), driving self-service experiences that are indicative of success
delivery and freeing up capacity to focus on at an organisation
more strategic, high value activities
– Biometric data from wearables
– L abour market analytics to inform new
market entry
– S urveillance data to monitor potential
misconduct
Human capital • A nalyse impacts of new technologies (e.g. • E nsure investments in HR technology include
robo-advice or robotic process automation robust data analytics and visualisation
strategy for repeatable tasks) on job roles, capabilities (either acquired externally or
accountabilities, skills and mind-set developed internally)
• R
edesign job framework (capabilities, job • R
ecruit and develop HR talent with
families, roles and pay) based on the new quantitative data modelling skill set, as well
business models and disruptive automation as the ability to interpret data and understand
technology its business implications
• M
ake use of efficiency gains from increased • M
ake it clear to employees how workforce
HR self-service to refocus HR on strategic data is used
projects that have direct impact on business • P rovide the value from employee data
strategy (e.g. talent strategy development, that will encourage them to provide more
workforce planning and employer brand information
promotion)
• P artner with the business to identify how
• D
evelop programmes that enable workers human capital descriptive, predictive and
displaced by technology to be re-skilled/ prescriptive analytics can inform strategic
redeployed internally decision making
• R
evamp HR operating model with a focus
on new capabilities, effective governance,
best fit technology and clear metrics to
demonstrate how HR contributes to business
value
6 PwC | Human capital 2020 & beyond
Priority seven
Redesign jobs and compensation models to
reward contribution to business value
Definitions
• D
ownward pressure on compensation in
FS coming from regulatory changes, public
scrutiny and investments in technology
What we mean by
• C
urrent pay structures are not sustainable
– FS organisations will need to move away ‘employer brand’
from traditional pay models that reward
tenure and focus on contribution to business The employer brand is the image of
value your organisation among current
edefinition of required capabilities,
• R and prospective employees, along
redesign of job, redefinition of internal/ with people who might influence
external sourcing models based on access them, such as their family, friends
to talent and links to dynamic market-based or social networks. A compelling
compensation/rewards are required employer brand can boost your
ability to attract, engage and retain
a high-performance workforce.
What we mean by
• D
esign new compensation structures and
‘employee value proposition’
ensure that high performance and delivery of
strategic business objectives are rewarded (EVP)
• R
evise processes to release lower performers The employee value proposition is
to make way for fresh new talent
why people would want to work
• R
edefine job frameworks and organisational
for your organisation – what you
hierarchies to align to new compensation
structures offer them (‘give’) and what you
expect in return (‘get’). The ‘give’
• E stablish robust value metrics and
measurement techniques to ensure that new brings together every aspect of
organisational roles are fairly compensated the employment experience, from
for the value they provide your organisational purpose and
• A nticipate and embed regulatory culture through to pay, working
requirements in compensation plan design, environment and development
performance management and rewards opportunities. The ‘get’ encompasses
process
what you want from employees
including skills, behaviour,
performance and attitude to work.
Human capital 2020 & beyond | PwC 7The issues reshaping FS
sectors and their human
capital implications
Through our Project Blue 2.0 framework2 and 2020 and beyond series3,
we’ve been exploring the issues reshaping insurance, asset management
and banking and capital markets, the risks that could undermine existing
business models and how organisations can take advantage of the changes
ahead.
All of these issues have significant implications for human capital and are likely to
require a decisive rethink in how it is managed:
2 http://www.pwc.com/gx/en/industries/financial-
services/projectblue.html
3 http://www.pwc.com/gx/en/industries/financial-
services.html
8 PwC | Human capital 2020 & beyondPriority one Priority two
Rebuild trust and redefine employer brand to Develop dynamic workforce supply/demand
attract and retain tomorrow’s workforce models to prepare for the workforce of the
future
Insurance Industry image seen as unappealing to many • Implement workforce planning to combat
millennials and Generation Z4. Important to: both immediate and longer term talent
• H
ighlight the ‘social contribution’ that insurers gaps (e.g. tackling scarcity of underwriters,
make in helping businesses and individuals actuaries and people with innovation and
manage risk (both personal and event driven) regulation capabilities, while addressing long-
term impact of ageing workforce)
• D
efine purpose, vision and values to foster
innovation and desired culture and behaviour • Integrated business and workforce scenario
planning – model impacts of competitor
• F ocus on ways to attract candidates who are
or market shifts (e.g. auto-insurance and
working for technology businesses or looking
driverless cars, disintermediation of broker
for careers in technology5
channels, changes in client life expectancy,
• C
reate new career paths that give employees reinsurance of new and emerging risks such
a variety of opportunities, such as rotational as cyber, terrorism, etc.) on the required
programmes between business and control capabilities and talent sourcing
functions or business and ‘incubation labs’/
• F ormalise governance of contingent
4 ‘Female millennials in financial services: InsurTech partners
Strategies for a new era of talent’, PwC, May workers to anticipate and respond to changes
2015 (https://www.pwc.com/gx/en/financial- in workforce preferences and manage risk,
services/publications/assets/pwc-female- regulatory and legal demands
millennial-report-v2.pdf)
5 ‘LinkedIn Top Attractors 2016: Where
professionals want to work’ (https://lists.
linkedin.com/2016/top-attractors/en/us)
Banking and Capital eputation is rebounding, albeit slowly, but more
R • S cenario planning around workforce needs to
work needed to re-establish trust. Important to: anticipate marketplace shifts and prepare for
Markets • S trengthen trust by promoting the disruptive scenarios (e.g. need to keep pace
organisation as a source of finance, a store with tech-driven customer expectations or
of value, and facilitator of transactions, respond to possible restructuring in the wake
including focus on links to purpose and of the EU referendum in the UK)
social responsibility such as microfinancing, • N
eed for customer-centric operating models,
infrastructure financing in developing markets new skills and capabilities to quickly adapt to
• E mphasise privacy and security to increase and respond to changing customer behaviour
trust among customers, as well as future patterns – such as digital, cultural, innovation,
employees and tech-savviness
• A ttract and deploy globally mobile talent • A s organisations acquire or forge partnerships
that is rotated across major global financial with FinTech players, decisions are required
centres in how cultures are integrated, how much
workforce data should be shared and level of
• P romote and foster collaboration, and develop
customisation needed in talent programmes
a culture of rapid product innovation and
such as hiring, incentives and rewards
prototyping in order to solve big, challenging
problems
• F orge a robust risk culture to comply with
regulations – embed risk behaviours in
performance and incentives
Asset and Wealth • A sset and wealth management still seen as • N
eed for new skills in areas such as tech-
reputable and rewarding destination for top driven investment or tax planning to support
Management talent. Less capital restrictions and regulatory generational transfer
scrutiny have attracted banking talent to • Increased passporting raises need for global
work in standalone asset managers or hedge deployment and expertise in multiple markets
funds. However, regulatory headwinds (e.g.
• N
eed to increase diversity of talent to reflect
new US rules on retirement investment
changing demographics and patterns of
advice) are raising the bar for regulatory
wealth
compliance and will reshape the employee
value proposition for financial advisors.6 • F ounder-led fund managers, wealth
Important to: manager and hedge funds will need to plan
6 ‘Ten key points from the DOL’s Fiduciary Duty for succession and determine degree of
• C
learly define the organisation’s purpose
Rule’, PwC, April 2016 (https://www.pwc.com/ operational formalisation required7
us/en/financial-services/regulatory-services/ and how asset and wealth managers provide
publications/dol-fiduciary-duty-rule-april-2016. financial stability and support for investors
html)
• Invest in relevant social responsibility
7 http://www.pwc.com/us/en/financial-services/ programmes such as financial education
publications/viewpoints/hedge-fund-growth-
investors-owners.html
and pension awareness to enhance external Human capital 2020 & beyond | PwC 9
reputation and employer brandPriority three Priority four
Maximise the potential of digital ‘talent Influence redesign of academic curricula and
exchanges’ to promote a better match modernise corporate learning & development
between talent ‘buyers’ and ‘sellers’ to build an adaptive workforce
Insurance • S hift to proactive talent sourcing from • T alent gaps and the potential need to provide
reactive recruiting – create relationships reskilling of transactional roles, such as
with candidates, nurture them over time, and customer service, claims, and operations, will
continually engage them through networking require more creative solutions – including
meetings, talent marketplaces, company new channels for talent, partnerships with
news, etc. local colleges and apprenticeships
• S hortage of critical skills will force rapid • A lternative training programmes making use
adoption of alternative sourcing mechanisms of open online courses/external content will
– using diversity programmes to broaden broaden and enrich curricula while lowering
talent pool, reaching out to candidates from costs
other industries (e.g. consumer products for • N
eed for investments in management
marketing or tech sector for IT) and tapping development training, including how to drive
into talent marketplaces with two-way innovation, manage uncertainty, anticipate
employee/ employer reviews new risks and manage an increasingly
• P roactively manage reputation on job rating multi-location, multi-sourced and diverse
and social media sites to ensure candidates workforces
understand the rewarding variety of
experiences available in insurance
• F ocus on increasing diversity – gender,
generational, ethnicity and diversity of
experience/industry. Ensuring diversity is
seen as critical to the business through
8 We explore the value of diversity and how to measurement, coaching and steps to tackle
realise in the potential in ‘Making diversity a unconscious bias8
reality’, PwC, September 2015 (http://www.
pwc.com/gx/en/industries/financial-services/
publications/making-diversity-reality.html)
Banking and Capital • C
loser focus on character, risk appetite and • Investments in customised education (e.g.
ethical compass as well as performance financial literacy and digital proficiency
Markets and capabilities to ensure right fit between via open online courses) to provide talent
employer and contingent employee development opportunities and develop
• F ocus on increasing diversity – gender, greater awareness among customers
generational, ethnicity and diversity of • C
ontinued investments in management and
experience/industry. Ensuring diversity is staff training to embed risk culture in daily
seen as critical to the business through decision making,
measurement, coaching and steps to tackle • C
apitalising on the potential of simulation and
unconscious bias gamification tools to increase take-up of L&D
opportunities and awareness of how to apply
them in real-life work
Asset and Wealth • T he pace of technological innovation and • W
hile universities will remain the primary
industry consolidation will reshape hiring pipeline for talent, there will be increasing
Management practices. Larger organisations will apply numbers of people coming into the industry
creative recruitment techniques, including through apprenticeships and vocational
social media employer branding, and courses
candidate psychometric testing to ensure a • T ighter risk and regulatory environment
closer cultural fit drives increased focus on culture and
• Invest in predictive analytics – applied in behaviour (e.g. new US Financial Industry
candidate selection and screening to identify Regulatory authority guidance in the US)
and prioritise qualities that predict success • S maller asset and wealth managers continue
• F ocus on increasing diversity – gender, to work across a number of functions/roles as
generational, ethnicity and diversity of part of their ‘on the job’ learning programmes
experience/industry. Ensuring diversity is
seen as critical to the business through
measurement, coaching and steps to tackle
unconscious bias
10 PwC | Human capital 2020 & beyondPriority five Priority six Priority seven
Digitise the workplace to fuel increased Integrate human capital data analytics in Redesign jobs and compensation models to
workforce productivity priority business decisions reward contribution to business value
• R
eskill talent being displaced by robotics Integrate human capital data analytics in • C
ost and margin pressures will make it
(e.g. automated underwriting, drone priority business decisions even more important to retain critical top
technology and telematics sensors). • W
ith the majority of insurers’ investments performers – value-based compensation
This would also help to address the looming in integrated human capital management model will maximise the reward for top
talent gap being created in insurance platforms complete, organisations will focus performers and help to weed out poor
by underwriters who are approaching on embedding predictive analytics into their performers
retirement age talent processes • N
ew reward models will be required in
• W
ith wearables already disrupting the health products/service innovation units
insurance sector, life insurance and other • T raditional tenure-based compensation
financial insurance products will look at how models will be create inter-generational
to further capitalise on data from wearables workforce opportunities and threats
• C
reate a ‘clean sheet’ of new capabilities,
broad-based roles and compensation
targets embedded into new cloud-based HR
technology systems
• E ncourage self-service for routine matters • S urveillance data tracking will be the norm; • T he overall drive to decrease costs, as well
and refocus branch/call centre staff on higher employees will accept monitoring of their as downward pressure on returns, will drive
value-added activities such as relationship professional communications and some compensation changes
building and sales elements of their social media presence as • V alue-based compensation model will
• R
eskill talent being displaced by robotics part of the job maximise the reward for top performers and
(e.g. bank tellers displaced by ATMs being • Important to provide employees with help to weed out poor performers, while
retrained as customer service representatives transparency and assurance over how fostering a leaner operating model
or people who can help customers conduct their data is being used (similar to how • N
ewly established job framework will reflect
their own online research) organisations manage and explain customer need to identify and report on ‘material
data usage) risk takers’ and meet growing regulatory
demands for total reward reporting and
an auditable link between rewards and
performance
• R
eskill talent being displaced by robotics • A sset and wealth managers are investing • F ees earned by asset and wealth managers
(e.g. robo-advisors) in predictive analytics, not only around will be under continued pressure amid the
• D
igital disruption and new competition from customers, but also employees, including ongoing push for greater transparency from
social media firms and payments specialists factors that gauge fit in the organisation and investors, policymakers and regulators,
will drive new distribution channels, putting likely performance driving the use of alternative compensation
further pressure on fees by providing lower • Increasing regulatory scrutiny means models to reward talent – including value-
cost alternatives business decisions will require consideration based compensation models
of talent risks – such as new market entry • Investors and regulators will seek more
and availability of skilled talent supply to transparency on how advisors are
deliver work compensated and equity of pay between
genders
Human capital 2020 & beyond | PwC 11The way forward:
Priorities for action
How can FS organisations
Drawing on our projections for 2020 and beyond, we’ve defined seven respond?
key human capital priorities that will enable FS organisations to position
Actively define and articulate the
themselves for success in the future.
employer brand
Many FS organisations don’t have a clear
Priority one or compelling view of why an employee
should work at their organisation rather
Rebuild trust and redefine than a competitor – whether that be
employer brand to attract and for reputation, higher pay, a specific
retain tomorrow’s workforce opportunity, leadership development or
some combination of these.
The employer brand within many
FS organisations has been marred A strong EVP enables organisations to be
by reputational damage. In turn, the competitive in the talent marketplace,
Employee Value Proposition, which in increases retention, and ultimately,
the past has often been associated with enables the business to execute its
By 2020, 60% of financial services CEOs strategy. To appeal to today’s talent,
believe that top talent will want to work high earnings and social prestige, has
been eroded. forward-thinking organisations are:
for organisations with social values that
are aligned to their own9. As FS organisations compete for • Reviewing their EVP and making
But financial services is the least trusted talent with industries that are seen as changes to enhance the employee
sector in the Edelman Trust Barometer10. more cutting-edge and more socially- experience. This includes social
conscious, a huge amount of work is impact opportunities, creating
So how can your organisation rebuild trust
needed to strengthen both the employer rotational programmes, clear paths
and reassert its value to society?
brand and underlying EVP. for progression and opportunities to
develop leadership potential.
As employee expectations continue
to evolve in the lead up to 2020 and • Establishing more flexible working
9 Shifting demands, competing priorities: Adjusting
to the new talent realities in financial services, Key beyond, a key focus of the revamp of the as part of the corporate culture, and
talent findings in the financial services industry,
EVP and employer brand should be how reducing overall hours worked. In
PwC 19th Annual Global CEO Survey, February
2016 (http://www.pwc.com/gx/en/financial- to align the purpose with candidates’ some markets, we’re already seeing
services/publications/assets/key-talent-findings-in-
and employees’ changing preferences moves to limit weekend working and
the-financial-services-industry-feb-2016.pdf)
and social ideals. curb out of hours communication as
10 Edelman Trust Barometer 2016 (https://www.
scribd.com/doc/295815519/2016-Edelman-Trust- part of a drive to improve employee
Barometer-Executive-Summary) health and well-being.
12 PwC | Human capital 2020 & beyond• Revamping offices to create more
versatile and visually appealing
workspaces, which promote
innovation and collaboration and are The one to choose:
able to match what many recruits
see as the more attractive working
Strengthening talent appeal
environment within the technology The challenges of attracting and retaining top talent in the face of an ageing
industry. As people’s personal and workforce and the changing expectations of people coming into the market
professional lives become more spurred a major insurer to rethink how it could sustain its position as an
blurred, they want to work remotely employer of choice.
when they choose, and have access
to the data and social collaboration To address the challenges, the group decided to launch a new employer
tools that make their lives easier and branding campaign built around a refreshed EVP. The group drew on
more productive. As such, access to employee feedback, leadership interviews and input from an employer
sophisticated technology will be a key branding consultancy to assess the strengths and weaknesses of its talent
element of an attractive EVP. appeal. From these insights, it was able to identify the key attractions of
the organisation and develop and test the core language and messages to
Align employer and employee values effectively promote the group among prospective talent. Crucially, the group
The brands customers and employees also identified and enlisted a network of brand ambassadors to champion the
want to be associated with are revamped EVP across the organisation.
conscious of their social impact
and responsibilities, underlining The result is a much clearer and more relevant exposition of why this is a
the importance of projecting the great company to work for. The initiative has also strengthened pride and
organisation as a force for good. engagement within the organisation, which can be shared internally and
communicated externally through social media and professional networks.
Adapt global human capital strategies
to regional and local realities
In an increasingly global and mobile
world, there should be one consistent
global brand, culture, and set of
systems, processes and policies –
core requirements for a truly global
organisation.
Human capital 2020 & beyond | PwC 13Data scientist is the most sought after job for millennials in a 2015 survey by Forbes, with financial planner being the only FS post to
make the top ten11
However, there is no one-size-fits-all. Roles and responsibilities in
It’s important to allow for local nuances implementing change
in legislation, regulation and culture,
while having the core components of Business’ role
the organisation’s operating model set
• Embrace purpose-driven culture
at the global level. For example, the
and lead activities that reinforce
kind of direct feedback that would be
these goals. In championing the
the norm in North America may be
organisational purpose, managers
deemed insensitive and demeaning
should talk to employees about their
in some Far Eastern markets. In turn,
individual aspirations and how they
regulations and trade union pressure
align with those of the company.
create enduring barriers to change. In
Brazil, for example, working regulations • Define the EVP and commit to
on clocking in and out at the place of ensuring it is a reality. It’s also
work make remote and flexible working important to lead desired behaviour
difficult to introduce. by example and ensure that breaches
are appropriately addressed.
• Participate in the definition of
desired global culture, values,
behaviours and processes. Embody
the global behaviours and values
and reinforce them in messaging to
teams, candidates, and other internal/
external stakeholders. Provide input
into local requirements and nuances
11 Best jobs for millennials, Forbes, 17 in the customisation of processes at
July 2015 (http://www.forbes.com/sites/ the regional level.
susanadams/2015/06/17/the-best-jobs-for-
millennials/#266a66216203)
14 PwC | Human capital 2020 & beyond14%
Penalties for misconduct have cost
leading FS groups the equivalent of 14%
of their equity capital since 200812
HR’s role • Facilitate the definition of the global
culture and supporting values.
• Work with leadership to define the Embed the culture, associated
organisation’s purpose, embed it behaviours and values in talent
into talent processes and measure processes.
progress in how effectively it’s
instilled into day-to-day operations. • Develop global workforce plans
that are integrated, but which are
• Drive the formal definition of the also tailored to individual market
employer brand and identify where preferences and nuances (e.g.
changes are needed to attract the regulatory requirements, talent
type of talent the organisation wants market availability, etc.)
in key areas. 39% of FS CEOs say they have changed
• Define global talent processes their organisational purpose over the
• Promote changes in culture where they don’t already exist.
and behaviour. One example is past three years or are considering
Customise talent processes for local doing so to take account of their impact
giving women opportunities in needs, applying regional legal and
traditionally male-dominated fields. on society13
compliance expertise.
• Champion changes in the employer
brand and measure progress.
12 Financial Times, 27 March 2016
13 Shifting demands, competing priorities: Adjusting
to the new talent realities in financial services, Key
talent findings in the financial services industry,
PwC 19th Annual Global CEO Survey, February
2016 (http://www.pwc.com/gx/en/financial-
services/publications/assets/key-talent-findings-
in-the-financial-services-industry-feb-2016.pdf)
Human capital 2020 & beyond | PwC 15Too often, however, FS organisations systematic way to anticipate what kind
Priority two don’t create the clear strategic workforce of people are needed and where they
plans needed to connect shifts in should be deployed to meet business
Develop dynamic workforce business strategy with recruitment, objectives14.
supply/demand models to prepare training and career development
for the workforce of the future programmes. Optimise, engage and integrate
contingent workers
By 2020, an increasing number of How can FS organisations Consultants, contractors and other
people will be working flexibly or within respond? contingent personnel are set to play
virtual teams spanning many different an increasingly important role in
countries. Strategic workforce planning enabling FS organisations to respond
Workforce planning is the proactive quickly to opportunities, control fixed
For employees, this demands new skills, analysis of talent supply and demand. costs and meet changing workforce
such as a global mind-set capable of It enables organisations to build and expectations. Yet few FS organisations
understanding different cultures and deploy the required skills to ensure have appropriate governance processes
ways of working, along with adaptability they can achieve short- and long-term in place to deal with an increasingly
to adjust to continued disruption. For business objectives. scrutinised and regulated ‘gig economy’.
management, there is the challenge of
how to manage, engage and deploy staff As organisations become more global Purpose-designed platforms can help
appropriately when they are working in and come up against skills gaps and to create a more systematic approach to
new, more flexible ways (e.g. alternative technological disruption, workforce contingent management. This includes
hours or remote working). planning enables them to develop a interactive profiling, screening and
14 A 2014 PwC FS viewpoint, ‘Workforce of the future’ looks in more detail at the role of workforce planning in meeting strategic demands (http://www.pwc.com/us/en/
financial-services/publications/viewpoints/fs-viewpoint-how-strategic-workforce-planning-can-help-financial-institutions-today-tomorrow-and-beyond.jhtml)a
16 PwC | Human capital 2020 & beyondthe tracking of availability, as well
as managing hours, payments and
performance.
Sharper deployment:
It’s also important to include contingent
workers within the workforce planning The people you need, when you need
process so there is a comprehensive view
on how to meet short- and long-term
them and at less cost
talent demands. The IT function of a large global FS group realised that there were a lot of
overlaps and duplication in the deployment of people around the world,
Often, managers will bring in
which were leading to unnecessarily high labour costs.
contingent workers because it’s easier
than hiring a permanent employee – To address the problem, the group has developed a centralised global talent
though, ultimately, this often costs the database to make it clearer what skills are available and where and how they
organisation more. Understanding of the are being deployed.
cost of contingent workers and what they
can deliver that permanent employees The new database covers both permanent employees and contingent staff. It
cannot is therefore vital. can be accessed by teams looking to staff new projects, identify replacement
personnel or evaluate options when considering taking on a project internally
Recent legal disputes have centred or externally. It is supported by a global technical competency model, against
on the blurring of the lines between which staff are assessed.
contingent and permanent personnel.
This raises questions over whether Moving to a global database is expected to improve efficiency and cut
contingent workers are genuinely labour costs by speeding up recruitment, decreasing overlaps in deployment
independent contractors or should have and reducing the fees paid to external vendors. It will also ensure the IT
the same entitlements as permanent organisation has the right people in place when needed and deliver better
employees. It’s important to ensure customer service to its clients.
contractual clarity and avoid treating
contingent personnel like quasi-
employees. It’s also important to define In our experience, there are two
the classification clearly with examples key obstacles that prevent financial
and educate people managers on institutions from offering flexibility16:
the distinction, along with when it is
appropriate to hire contingent staff. 1. Fear of the effects of reduced face-to-
face collaboration
Further priorities include identifying
solutions to capture knowledge built 2. Concerns over co-ordinating and
up by contingent workers before they transitioning work among employees
go elsewhere. This includes developing We therefore believe that beyond
transition plans and handoffs of key policies, it’s important to build a culture
tasks, processes and information prior to of flexibility, which is embraced and
contingent workers leaving. To support championed by the leadership :
this, it’s useful to develop a formal
reviews of contingent activities and build • Move from monitoring hours and 15 ‘Female millennials in financial services:
in knowledge transfer into contracts (e.g. attendance to outcomes-based Strategies for a new era of talent’, PwC, May
2015 (https://www.pwc.com/gx/en/financial-
milestones and requirements including working services/publications/assets/pwc-female-
knowledge transfer that are tied to pay). millennial-report-v2.pdf)
• Give staff greater autonomy over how 16 We outline how to make flexibility a reality in FS
Flexibility matters they meet performance goals organisations in ‘Flex-able future: Integrating
While a growing number of FS flexibility in financial institutions’ (http://www.
pwc.com/us/en/financial-services/publications/
organisations offer some form of flexible • Identify why people think taking viewpoints/workplace-flexibility-integration-
working, our research highlights a advantage of flexibility policies financial-institutions.html)
disconnect between the formal HR could harm their careers and seek to
policies and management support15. address this Human capital 2020 & beyond | PwC 17Roles and responsibilities in HR’s role
implementing change
• Implement workforce planning
Business’ role processes and train HR teams in
how to develop, collaborate and
• Bring workforce planning into the implement them.
annual business planning process.
At a minimum, this should include • Develop capabilities needed to adapt
taking account of talent availability quickly to changing demands and
when thinking through future customise employee contracts and
business scenarios and as one of the experience. Would need move away
critical inputs to business planning. from uniform tech-focused operating
model towards a more flexible
• Bring HR into business meetings approach, supported by voice of the
so they can develop a clear customer and other regular input and
understanding of the direction of feedback.
the organisation and be better able
to contribute to delivering strategic • Keep fully up-to-date with emerging
goals. business plans and understand where
2 out of 5 people around the world believe the business is heading to influence
that traditional employment won’t be • Understand the difference between scenario planning and predict impact
around in the future. Instead, people will permanent employees and contingent on human capital.
have their own ‘brands’ and sell their skills workers, and when and why each
to those who need them17 would be used, to ensure both are • Embed contingent workers into the
deployed appropriately and manage organisation’s overall business and
business risk. talent strategy, including guidance
on when contingent workers should
• Prioritise permanent employees over be used rather than permanent
contingent workers to help manage employees.
costs and achieve business goals.
• Establish clearly defined processes
• Make the business case for diversity and governance around who owns the
and flexibility, and be seen to be contingent workforce population, and
leading change. how they are managed.
• Develop database of all available
talent, including contingent workers,
and their capabilities, costs, etc.
• Define flexibility and remote
working policies and ensure they are
17 In 2014, PwC interviewed 10,000 people in China,
reinforced across the talent lifecycle.
India, Germany, the UK and US to find out how
they think the workplace will evolve and how
this will affect their employment prospects and
working lives. We also interviewed more than 300
HR professionals about their objectives and how
they’re preparing for the shake-up in the world of
work ahead. The key findings are set out in The
Future of work: A journey to 2022 (http://www.
pwc.com/gx/en/issues/talent/future-of-work/
journey-to-2022.html)
18 398 millennials working in banking and capital
markets, 115 in insurance and 83 in asset and
wealth management were interviewed for PwC’s
female millennial survey (2015)
53% of female millennials (women born between 1980 and 1995) working in FS believe
that taking advantage of flexibility and work-life balance programmes would have
18 PwC | Human capital 2020 & beyond negative consequences for their careers18Priority three
Maximise the potential of digital Gamified talent acquisition
‘talent exchanges’ to promote
a better match between talent How to find the right talent in a world filled with tech-savvy millennials and
‘buyers’ and ‘sellers’ now Generation Z is rapidly evolving. This is a world where there is a growing
demand to be a ‘digital employer’. FS organisations face the particular
In an increasingly competitive job challenge of how to overcome traditional perceptions of black suits and blue
market, FS organisations have to engage ties, and be seen as a technology-immersive and digital leader.
earlier and cast their net wider in the
pursuit of key talent. This includes This is the challenge facing a major financial services group, which is finding
increasing workforce diversity and it increasingly difficult to attract a ‘new workforce’. Traditional recruitment
reaching out to people who haven’t initiatives were yielding the repetitive and conventional results through the
considered a career in the industry. screening of thousands of applicants, with only handful of suitable candidates
at the end. What they needed was a new, innovative and non-traditional
By 2020, technology will be increasingly digital approach to attract and engage the new generation.
critical in the development of talent
communities, enabling organisations An answer lay in a new gamified psychometric screening tool that applies
to engage, profile and target the best game mechanics to a traditional value-based assessment, woven together with
candidates. It will also play a key role in the group’s core values. Candidates access the assessment game via an un-
strengthening transparency, evaluation branded web-based portal. Once agreeing to the terms and conditions, they
and interaction as job rating sites are instantly immersed into a world of rich avatars and value challenges. A
become an ever more important element set of challenges must be completed to fulfil the ultimate quest, continuously
of selection and recruitment. providing tangible and reliable information linked to potential work-based
behaviours, values and culture.
How can FS organisations
respond? Applying game mechanics has the potential to significantly reduce the number
of potential applicants a company needs to evaluate by producing an upfront
Create lifelong talent communities profile of a candidate’s alignment to company values. This profile could
It’s more important than ever to engage include cultural fit as well as behavioural characteristics. The measurable
with potential recruits at school and impact would then be reducing acquisition costs and increasing the success
university as part of the development of rate of finding appropriate candidates
talent communities.
And this is only the beginning. There are opportunities to apply game
Visits and outreach programmes will mechanics to other elements of human capital management. The ultimate
continue to have a role. We’re also likely aim is to create a single gamified world that manages and engages new
to see growing use of gamification, employees, from induction and on-boarding through to performance
virtual office tours and virtual job evaluation, while developing and guiding their learning, career path and
shadowing to position FS as ‘current’ and personal development plans.
give potential recruits an earlier view of
what work will be like.
Gamification and psychometric testing
can not only help to identify candidates
with suitable skills, but also the desired
personality. The results are a closer
match and better outcomes for both
employee and employer.
Human capital 2020 & beyond | PwC 19Create a transparent view of the role Roles and responsibilities in
In a job market where people are more implementing change
mobile and want responsibility sooner,
it’s important to provide an honest Business’ role
showcase for what kind of environment
• Be open-minded about candidate
and opportunities are on offer.
experience, and abandon prejudices
In 2020 and beyond, FS organisations around full degrees and affinities with
will make use of developments in their own colleges where appropriate.
interactive technology to provide ‘day
• Sponsor future employees through
in the life’ experiences during the
apprenticeships, and invest time in
recruitment process. These will help
their development and apprentice
candidates gain a more realistic view of
experience.
what it’s like to work in the organisation
and answer key questions such as what • Build an online social presence
kind of experience they will gain and to share information about the
how quickly they will be given key organisation and management
responsibilities. (within the organisation’s
communication and social
Beyond just a video, these immersive
media policy) to provide greater
experiences would include going in
transparency to candidates.
New ways of engaging for a day and shadowing someone in
the role. Employee review sites will HR’s role
The ways people seek out jobs and provide an objective rating of what the
judge organisations are being job really entails and whether the way • Define and manage the interaction
transformed by technology. it is presented is authentic. Crucially, between the organisation and external
Your organisation and the jobs you they can also provide valuable pointers websites that provide transparency
offer will have online ratings just like on how posts could be made more into what working in the business is
hotels and restaurants. attractive. really like. Partner with corporate
marketing to manage responses
Gamification and virtual interaction Level the playing field for information and ensure their representation is
will be the primary vehicles for As millennials and Generation Z become accurate.
candidate engagement. a larger part of the workforce, the
expectations around transparency of • Develop and maintain talent
information during recruitment will communities to connect with
change. In the same way that online candidates and keep them up-to-
information exchanges are used to date with company news, events and
inform decision making when selecting opportunities.
restaurants, drivers, etc., the future of
FS recruitment and job selection will • Develop gamification recruitment
be fuelled by technology-enabled talent strategies to engage candidates, and
marketplaces. These provide two-way ensure those programmes test for the
employee/employer feedback on what target attributes – including values
it’s like to work at a company. Online and skills.
job rating sites are coming to the fore,
through which former employees
provide reviews of the organisation and
its management, and employers rate
former employees on their skill sets and
contributions. Employers should actively
manage their reputations on these sites
and respond to negative reviews.
20 PwC | Human capital 2020 & beyondwill involve and a more certain path • Sponsor future employees through
Priority four into employment, without the time and apprenticeships and invest time in
student debt needed to earn a more their development and apprentice
Influence redesign of academic lengthy degree. experience.
curricula and modernise corporate
learning & development to build an The launch pad for a successful career • Foster an environment of vigilant
adaptive workforce While people will switch jobs more often, tracking and transparency around
they will still seek out employers offering coaching and development, with
Skills requirements and career superior training and development. a strong emphasis on real-time
development priorities are evolving fast feedback and technology-enablement.
and by 2020 FS organisations will need Rather than a mapped out career, FS
to deal with a complex mix of workforce organisations can compete for talent on • Assist in designing curricula for
expectations. the basis of their ability to offer targeted university partners that help develop
training or an all-round grounding in real-world skill sets with immediate
They need people with the agile mindset business, which can open doors across application to the job.
to adapt to what is now constant change different sectors, including those outside
within the marketplace. Millennials FS. HR’s role
expect to switch jobs more frequently
Stay close • Define the recruitment strategy and
than previous generations and want
Traditional one-size-fits-all employee reach out to non-traditional sources of
greater autonomy and flexibility19.
engagement models will give way to talent such as apprentice schemes and
As people live and work longer, talent highly customised contracts. community colleges.
planning should also reflect the different
Retention strategies will have to be • Develop and run the apprentice
phases of the modern career, the need
pragmatic, focusing most closely on programmes, changes to recruitment
for earlier and continual updating of
the talent organisations most want and process and the development of
skills and the desire for new challenges.
can realistically expect to stay. It will be greater transparency.
How can FS organisations important to keep others close through
• Design contracts that reflect
respond? the development of alumni networks.
individual aspirations and the
New paths into employment Keep learning need for adaptability and continual
It’s time to challenge traditional learning The need for continual re-skilling will upskilling.
and development (L&D) models and require more innovative and cost-
• Make coaching and development
begin employee L&D earlier (i.e. before effective approaches to L&D. This
more transparent, with a strong
graduation). includes customised and interactive
emphasis on real-time feedback and
digital simulation and virtual learning.
Full three- or four-year degrees aren’t technology-enablement.
As organisations review and rethink their
necessary for some transactional corporate training programmes, there • Design and implement career paths
positions such as claims or customer will be opportunities to supplement outside the organisation to provide
service. We anticipate more partnerships their offerings with massive open online new experiences (e.g. one-year
– formal and informal – between FS courses (MOOCs) and other externally rotation in a FinTech business and
organisations and community colleges, available content. back into the FS organisation).
certification agencies and other third
parties. For instance, an FS organisation Roles and responsibilities in
could partner with a community implementing change
college to define a curriculum that
feeds into a specific role(s), while Business’ role
providing apprenticeship and on-the-job
• Develop career paths that reflect
opportunities to put that learning into
changing expectations and
action immediately. 19 44,000 PwC staff from 18 countries were polled
aspirations, including community for NextGen: A global generational study, 2013
FS organisations gain from work-ready involvement, career breaks and fresh (http://www.pwc.com/gx/en/hr-management-
services/publications/assets/pwc-nextgen.pdf)
and tested recruits. Future recruits gain challenges outside the organisation.
by having a clear view of what the work
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