FS&I faces significant challenges in recruiting talent and has some of the lengthiest recruitment times across sectors. And with FS&I roles set to grow by 5% through to 2029, the sector is “becoming increasingly competitive as companies of all sizes race to recruit the best talent to ensure long-term growth”, according to Hanover. FS&I also faces challenges in recruiting a diverse workforce, and retaining older and more experienced staff. Artificial Intelligence (AI) can help overcome these challenges: with the growth in AI-based HR systems that promise faster recruitment, pluck the best candidates from the talent pool, and ensure that they remain loyal. Yet, while the FS&I sector is no stranger to using AI, it remains to be seen whether it will trust AI to recruit its staff.
People are willing to embrace AI in the workplace. Some 43% of managers, HR leaders, and other employees said they’re excited about how AI will affect the future of work, according to a report by Oracle. In recruitment, 99% of Fortune 500 companies report using applicant tracking systems (ATS) – software that helps screen large volumes of applicants, often using AI to gather insights. Yet, McKinsey argues that financial institutions underestimate the value of a rigorous hiring process, “one in which the characteristics being selected for have been determined in a scientific manner and are evaluated using a formal data-driven process.” Using technology may seem at odds with the psychological underpinnings of human resources and therefore threaten to undermine the human in HR.
The human touch
Human beings are fallible, and recruitment carries the risk that people bring unconscious bias to the process that precludes hiring a diverse workforce. The FS&I sector lacks diversity at the senior and executive levels. In American banks, Blacks and Latinos comprise 4% or less of executive and senior level employees, and fewer than 6% of first/mid-level leadership employees, says research by the US House Committee on Financial Services. In the insurance industry, just 23% of executives and officers at the large insurers trading on the NYSE or Nasdaq are women, according to S&P global intelligence.
Unconscious bias is where people think better of someone because they believe they’re alike and potentially less of others because of differences, which might include race, religion, sexual orientation, gender identity and age. It stems from a prehistoric, psychological need to put people into groups, which sees the ‘other’ as threatening. By comparison, AI recruitment systems screen candidates using algorithms to combine data points and predict the best fit for a role. It’s also possible to program AI to ignore demographic information. American Banker claims some are turning to artificial intelligence to “help broaden their applicant pools and identify the candidates who display the passion, the aptitude and the leadership skills they are looking for.”
AI can also speed up the hiring process, which is particularly slow in FS&I and can take as long as 44.7 days, the longest time among the sectors reviewed by Workable. AI can quicken recruitment by sourcing candidates and sifting resumes more quickly, comparing candidates’ skills to those in a job profile. By comparison, manually screening candidates can take, on average, 23 hours per hire.
There are also applications for AI in retaining existing staff, and reports find that 80% of executives believe AI can improve productivity and performance. Deloitte Insights says that banking has largely “been immune to the turnover tsunami disrupting workforce dynamics.” However, it notes older workers are leaving the workforce in record numbers. To retain staff, FS&I organizations will need to learn more about employees’ motivations, values, and goals.
Yet, it’s unlikely that AI will replace HR professionals completely. Potential employees prefer the human touch; a survey by Ranstad found that while 91% of job seekers believe that technology has made job searching more efficient, 87% believe it has made the search process more impersonal. Plus, while AI can screen resumes, it is less well-equipped for the softer side of HR, which includes problem-solving through creativity, using business acumen and influencing managers and potential candidates.
Achieving the right balance
It’s more likely that we’ll see organizations shift to an augmented model, where HR managers in FS&I use AI insights to inform their decision making. “Augmented intelligence” relates to the belief that you cannot fully replace human capabilities with technology. Instead, augmented intelligence suggests we should look to create technology to enhance human aptitude and efficiency. So, while AI can sift resumes faster than humans, it’s unlikely we’ll see AI chatbots replace people in the interviewing process anytime soon.
Likewise, there is skepticism about using AI to manage the workforce. Studies show that while many employees are concerned about how employers use workplace data, the vast majority (92%) don’t mind employers using data so long as they feel confident that the goal is to help them.
Beamery’s talent management platform augments the skills of an HR leader and can help FS&I organizations find, develop and retain the talent they need. For example, it can enable HR leaders to make fairer hiring decisions without collecting personally identifiable information – so it’s fair to potential employees, too. Recruitment is more efficient through a “total skills context” that focuses on the needs of your organization and industry. Beamery matches candidates on job title, industry context and skills relevance, and offers complete transparency, so you’ll see the data behind recommended decisions.
With the FS&I sector facing skills shortages in key areas, especially digital skills, a data-driven platform that can help find and retain workers with the skills that an FS&I organization needs the most, can have a hugely positive impact on a business and the industry as a whole.
Additionally, adopting the right talent management platform will allow HR teams to combine that data-driven insight with their incumbent knowledge and experience. With Beamery, HR teams can adopt an augmented intelligence approach and overcome the talent challenges that FS is facing.