European Banks Facing Looming Talent Shortage
As if things weren’t bad enough already, a new survey by McKinsey finds that European banks are facing a looming talent shortage.
In the next five years, some large institutions will face difficulties filling positions crucial to the execution of their evolving strategies, McKinsey says. The research finds that European financial institutions have made little progress in managing talent effectively and may have to forgo important growth opportunities.
McKinsey interviewed top HR executives at 13 large European universal banks,1 10 of which are among the top 30 in the region by market capitalization, in eight countries. Most bank executives said they don’t have enough qualified people inside the organization to fill critical positions. Within three years, McKinsey estimate, the talent gap will expand, leaving most banks unable to use top internal talent to fill 25 to 40 percent of their senior-executive positions and other roles with economic or strategic significance.
McKinsey found that in the next three to five years, banks may be desperate for capable people to work in specific areas that are vital to the banks’ evolving business plans.
In retail banking, for example, we estimate that almost half of most banks’ critical functions will be deprived of talent.
Bank functions such as cross-border integration, turnaround management, push marketing, third-party-channel development (for mortgages and consumer lending, for example), and underwriting and monitoring retail credit all will require skills that are in relatively short supply.
Several trends are behind the growing need for more sophisticated skills in these areas. One is the banks’ rapid growth in emerging markets, which frequently involves M&A. Others include the increasing sophistication and declining loyalty of customers, heightened competition for deposits, and the effects of the subprime-lending crisis, McKinsey says.
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