Are talent woes putting treasury management’s future at risk?

Select treasury executives reveal struggles to attract and retain younger workers

One of the unexpected outcomes of our recent interviews with treasury management leaders was the unanimous concern (expressed in an unsolicited manner) about staffing. Participants believe attracting, developing and retaining talent will be a significant barrier to treasury management’s future success.

In fact, there is genuine concern that without new, innovative thinking, treasury management relationships—and the future viability of the function—are at risk for financial institutions (FIs) of all sizes.

“Treasury management is less attractive to younger people than it was in the past,” surmised one treasury leader.

Treasury executives have concerns about bench strength and future leadership

Succession planning and future treasury leadership are also in question.

“We have an aging workforce and concerns regarding the transfer of knowledge,” remarked one participant.

Experienced treasury management resources are retiring, and banks are not finding enough people with the right skills, treasury management knowledge or industry experience to fill open positions. Most FIs interviewed cited a lack of internal bench strength, and a limited number of candidates qualified to take on leadership roles; this was especially true for larger banks.

Is the Fintech cool factor to blame?

According to the treasury executives interviewed, recruiting and team development are not keeping pace with the aging of the current workforce. This inability to attract and retain younger talent is beginning to impact banks’ ability to compete with Fintech solutions, deliver product innovations and improve the customer experience.

But the real culprit to blame for treasury’s talent woes? Fintechs.

“Fintechs are attracting talent that would have normally gone to our bank,” said a participant.

Leaders believed Fintechs are largely winning the talent wars by leveraging the cool factors associated with a start-up culture; including trendy office perks (think ping pong tales and craft beer) relaxed work environment, flexible hours and casual dress codes.

Executives interviewed also perceived that young professionals are drawn to Fintechs because of the perceived ability to get things done faster and they can make a more immediate impact with their work.

By contrast, working 9 to 5 at a financial institution can be regarded as stodgy. The economy and workplace now offer the next generation a wide variety of career choices with organizations perceived as exciting, innovative and more relevant to their lives.

Three high-level tactics to reinvigorate treasury’s appeal to young professionals

High quality talent is essential for treasury management success. Since all FIs (and Fintechs) are competing for the same limited pool of younger workers, it’s critical for treasury to market its positive qualities more aggressively. Here are three high-level tactics to start attracting younger professionals back into your treasury department:

1. Evaluate your strengths. Treasury management should proactively work with human resources and senior leaders to shore up opportunity areas and create more competitive offers. This starts by taking a hard look at every function’s strengths and weaknesses, from the eyes of prospective candidates.
2. Launch a mentor program. Formal mentoring programs are another option to attract younger workers. These programs provide senior staff an opportunity for knowledge transfer, while simultaneously encouraging a steady pipeline of future leaders. Mentoring can be a marketable advantage among job seekers.
3. Improve treasury’s stature. Lastly, elevating the role of the treasury management function is one way to attract and retain talent. An organization that is more self-sustaining, strategic and highly visible within the broader bank will hold greater appeal to ambitious young professionals.

For FIs large and small, treasury leaders must make hiring and retaining key positions a top priority. As much as technology will influence the direction for an FI’s treasury management business, experienced professionals still need to make decisions about strategy, priorities, investments and relationships.

Up next in our treasury management series: Three ways to increase treasury management’s standing (and its impact) within the organization.