It’s difficult to believe in such a highly regulated industry, but financial services are amongst the top three sectors reporting high levels of skills gaps. According to research conducted by the DfES (the UK Government’s Department for Education and Skills) and Warwick Institute for Employment Research, too many employees in the financial services sector are under-performing. Organisations, the research suggests, are failing to provide them with adequate support, which in turn would help grow the business.
It appears that companies are not investing their training and development budgets effectively. One in four businesses in the sector claim its employees are not fully equipped to do their job, although they are spending more on people development than other sectors. The Financial Services Sector Business Survey (Surrey, 2002) backed up this claim by identifying the top human resources (HR) issue as staff development (52 per cent).
The survey also revealed that companies find difficulties with organising training because they cannot find a relevant course to suit their needs. Of those questioned, 39 per cent said that if employees were away on courses or given study leave they had trouble finding appropriate cover to ensure the work was still done. And almost half couldn’t justify the time employees had to spend away from the office on training courses.
Skills Shortages
These findings must not be ignored, because skill shortages hinder individual performance and career prospects; and the problem becomes exacerbated because, as people struggle to cope, motivation and energy decrease.
Indeed the 2004 Business Energy Survey carried out by the Chartered Management Institute and Adecco found that finance managers were running on empty as workloads spiral. Over one in five managers in financial services work an extra 14 hours more than they’re paid for, effectively equating to a seven-day-week. And fifty per cent feel that they are overloaded with work.
According to this research, one in three employees has received no training at all in the past 12 months. This is made worse by the fact that over half of managers are aware of their training budgets. So why is the money not being spent? Maybe it’s because they still need convincing about the importance of training and continuing professional development.
If training is effective and appropriate, the development of people will contribute to the achievement of an organisation’s goals and objectives. So it’s not a case of just booking people onto any training course they may be interested in. Tailored training – meeting your specific needs – is one way to impact on productivity. Informal methods such as work-shadowing, coaching or job rotation should also be considered depending on the development need. After all, managers have a responsibility to encourage and support their employees in identifying and meeting their job-related development needs.
Commitment to Staff
The provision of development opportunities also demonstrates commitment to staff and this is a strong motivator for most employees. According to the Business Energy research, only half of employees in the financial services sector have high levels of morale and motivation. Perhaps worse, only 66 per cent believe that their CEO encourages change and innovation, and allows people to learn from experience. This suggests that managers are not making best use of training opportunities. If they can use budgets to improve this statistic, they are sure to raise morale and show how changes being made are for the improvement of the whole team.
The research showed that motivation is clearly far more driven by intrinsic factors, such as helping others in the organisation develop and grow, than elements such as performance-related rewards and competitiveness. This indicates a strong relationship between people investment and an increase in productivity. If people are more motivated by their continuing development, they are more likely to reward businesses with their knowledge, skills, enthusiasm and loyalty. And if this is achieved, the financial services sector, as a whole, is more likely to retain high calibre employees who enjoy the challenges they face.
Many managers also reported that there was a negative management style operating in their organisation. Nineteen per cent believed the prevailing management style is bureaucratic and 20 per cent believe it is reactive. Despite the time and effort spent by organisations in trying to develop effective communications strategies, less than one-third of respondents expressed satisfaction with organisational communications.
A Change in Attitude
It is easy to see why such frustrations exist. The pace of change and a desire to reduce costs have had major implications for working patterns in many organisations, but all too often these are not communicated effectively and they take their toll through longer working hours and a drained workforce. Part of the problem can lie in senior management believing one thing about morale, when those close to the coal-face have vastly different experiences. It’s only when people begin to feel a close and meaningful involvement with their organisation that they bring energy, enthusiasm and passion to their work. And when that happens the end result is often seen in greater drive, productivity and results.
This is shown to be the case in the Institute’s latest research ‘Management development works: the evidence’ (January 2004) which indicates that management and leadership development improves organisational performance. However, this improvement can only be achieved if the development programme has a clear organisational priority, with employers taking responsibility, and is linked to business strategy with established processes and frameworks. It must also be designed to build relevant competence and behaviours and should be focused on the long-term tenure of employees.
Out of all these factors, the most critical for employees is the extent to which employers take responsibility for management and leadership development. Where managers rated this highly in 2000, four years later theirs were the companies that reported significantly higher organisational performance. The research also highlights this point in revealing two other factors to have had a significant impact on businesses’ performance since 2000. The first is where people development was driven strategically within organisations, with Board-level support and strong links to organisational business objectives, and the second is where tailored development programmes were designed to address managers’ abilities, motivations and potential to meet business needs.
Tailor-made Courses
Businesses should clearly find the opportunity to tailor courses to their own needs, and may focus on topics such as developing positive impact and influence, team leadership and communication management. It is important that any investment in management development is aligned to the organisation’s objectives as well as those of an individual, so that both parties receive the benefits. An example of this is the “Modular Development” scheme that has been introduced at Lloyds TSB, which provides flexible programmes that can be completed in a timeframe to suit both employees and their organisations. Managers who undertake the development programme work in a variety of roles and are selected for the programme on the basis of their job requirements and learning needs. Richard Hall, HR Manager (Accredited Programmes) at Lloyds TSB, says: “This scheme links with driving workplace learning, enabling people to do things differently and to actually put in practice what they have learnt.”
It is clear that the financial services sector is beginning to recognise the need to improve competency levels, but for this to work effectively organisations need practical and flexible development which may include – but does not require – formal qualifications. If an organisational learning culture is created where the benefits of development activities that take place in the workplace are recognised and shared, then the financial services sector may be able to go some way towards reversing its status as one of the top three under-skilled sectors.