The millennial recruiting problem isn't going away.
Two-thirds of executives in the wealth management, asset management and fintech industries continue to "lack a fundamental understanding of how to attract the next generation of employees," according to an annual survey of top executives by Kathy Freeman Company, a California-based executive search firm.
Financial services companies have a major perception problem when it comes to people between 21 and 37 years old, according to the report, "Late Adopters Finish Last: Why Change is Critical in Today's Talent Market."
"It's a huge problem," says Kathy Freeman, principal of the eponymous firm. "Young people just don't view the industry as a place where they can both earn a nice living and make a positive contribution to society — and that's a dual priority for many."
To counter that, Freeman cited a suggestion by one of the wealth management executive surveyed in the study. When interviewing young people, the executive said, firms should "frame the position as helping clients obtaining their goals, versus making the job about fulfilling the firms' goals."
Lack of diversity also turns millennials off.
While two-thirds of executives surveyed said that their firm is making progress in increasing diversity at their firm, an almost identical percentage said the industry hasn’t done enough. "Firms must address this issue," Freeman says. "It's something that millennials really care about."
In addition to their difficulties attracting millennials, financial service firms are struggling to retain young people currently working in the business. Although 60% of executives surveyed believe their firm is making progress in developing the next generation of executives, 40% say they work for firms that aren’t grooming their talent for more meaningful roles.
That's ominous, the report warns: "In this market, firms that don’t have a master plan for millennials are at risk of losing them."
What can companies do?
For starters, redefine work-life integration, the report says, a conclusion underscored by industry leaders in financial advisory firms.
Indeed, executives interviewed for a recent Financial Planning special report on compensation stressed that in a tight job market, they are making a concerted effort to make their workplaces more attractive by scheduling off-site recreational events and offering employees benefits such as flexible vacation time, bonuses for relocating closer to the office and days off to allow employees to volunteer for their favorite charities.
Reversing the industry's reputation from negative to positive is also critical, the report says.
The report urges firms to work together on a coordinated industry campaign to highlight career opportunities, demonstrate the industry’s commitment to communities through corporate responsibility and philanthropy and communicate the industry’s positive economic impact on society.
Advisory firms and asset management and fintech firms should also begin to build leadership teams pairing emerging talent with seasoned professionals, the report suggests. Some firms are also focusing on internship programs to attract millennials.
Baby boomers can help articulate a firm's cultural values and provide insights, communication skills and internal diplomacy they have fine-tuned over the course of their careers. Millennials can help older advisors navigate the brave new digital world.
"Mentoring with a focus on skills development and laying out a clear career path are critical to attracting and retaining younger talent," the talent survey concludes.