There are more redundancies and fewer vacancies in Asian and Pacific financial services than a year ago as many institutions strive to slash costs in an uncertain global economic environment.
But this isn’t an excuse for employers to stop focusing on retaining their staff. Whether it’s motivated by saving costs, targeting high performers, pre-empting future attrition, or stopping defection to the corporate sector, retention still matters.
Reasons for retention
The cost of rehiring is always a driver of retention, and firms are even more loath to replace staff in a cost-conscious climate. Retention strategies are often targeted at high performers whose skills need to be kept in-house, particularly when the firm is battling a downturn.
Although there aren’t too many financial services opportunities available in the short term, the desire to move roles is still fairly strong.
In Singapore and Hong Kong respectively, 66% and 63% of finance professionals intend to jump ship this year, according a recent survey carried out by my company. Yet they are realistic about their chances, with more than 70% of respondents in both centres expecting it to be hard or very hard to find a new position.
The potential danger for employers is that pent-up demand to leave their ranks will grow, resulting in too many staff quitting when markets pick up – just the time when firms want to expand, not lose talent.
Another retention problem is already underway. HR professionals in Asia have told me that compared with a year ago more people are considering opportunities in other industries. In an era of lower bonuses and leaner teams, some employees are questioning whether working long hours is still worth the effort, especially when many corporate employers seem less vulnerable to retrenchments. People with sector-transferable skills, such as those in accounting, risk and technology, pose the greatest retention danger.
Heavy workloads help to explain why having flexible hours is an important non-monetary benefit. Our survey reveals that 84% and 79% of active job seekers in Singapore and Hong Kong respectively consider it to be crucial, yet only about half currently enjoy it. This supports remarks from recruiters that people are leaving financial services partly to gain better work-life balance elsewhere.
Flexible working in the finance sector – while historically poor and still inappropriate for some jobs – is growing in importance. Although initiatives are often company wide, some organisations allow managers to authorise reasonable requests from staff without HR approval. Programmes can also be targeted at particular groups, such as women returning from maternity leave. And importantly, employers should provide proper technical support to those who work from home, and establish ground rules to ensure they are not tied to their mobile devices late at night.
What staff are seeking
Retention does not always come down to bidding wars because employees are now increasingly looking for a mapped-out internal path that will put them in a stronger position in the future. Our survey indicates that a lack of career progression beats compensation as the top motivating issue for those looking for a job.
A lack of recognition for accomplishments is the third key factor, and this poses a challenge to managers, especially when many staff feel under pressure following downsizing. In a downbeat market, it’s important to recognise people’s efforts and keep them energised. The hardest candidates to headhunt are those who like their job and have a good relationship with their boss.
The way in which firms handle the aftermath of lay-offs is also essential to keeping the remaining workforce loyal in the longer term. Line managers should meet employees and clearly explain the business case behind their colleagues’ redundancies. Having plans to redeploy, or offer career advice to, retrenched staff also helps to improve morale among the survivors.
Retention matters right now thanks to factors including the high cost of replacing staff and potential attrition when markets recover. It is up to senior management, line managers and HR to work together to boost retention rates, concentrating on the issues most relevant in the post-GFC financial world – career progression, recognition and flexible working chief among them.
George McFerran, Managing Director, eFinancialCareers Asia-Pacific
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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George McFerran is the Managing Director at eFinancialCareers Asia-Pacific.