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null Financial Services Industry: How To Make the Most of your Workforce Age Diversity

Financial Services Industry: How To Make the Most of your Workforce Age Diversity

The Organisational Culture in Financial Services report by Allen & Overy found that Financial Services leaders consider managing workers across generations one of the top challenges organisational culture will face in 2024. As traditional finance models shift to Fintech models and insurance models shift to Insurtech, the digital skills of the younger generations are going to grow in demand, but the more senior workers are staying put.

 
Legislative changes pushing back pension ages and greater life expectancies mean Babyboomers will be in the world of work longer than ever before. At the same time, Millennials and Gen Z workers continue to reshape our ways of working, leveraging technology with ease as they enter employment in vast numbers. At present, the vast majority of people working in FinTechs are aged between 22 and 44. However, the balance is shifting, and regardless of baby boomers´ extended presence in the world of work, the year 2025 will see a global workforce made up of 75% Millennials and Gen Z.
 
So, with such contrasting age groups working together, how can you, as a manager, make sure you're getting the most out of your diverse teams? Where do these seemingly opposites meet? Let’s explore what these different generations have in common, and then look at some tips for bridging the differences.
 
 

3 keys to empathetic leadership in the Financial Services sector

 
It all starts with understanding the strengths and weaknesses of each group to create a holistic strategy that addresses their concerns, which are not as distant as you may think. A study by McKinsey found that employees of all ages look for many of the same things at work – and also quit their jobs, or start somewhere new, for similar reasons. Both Gen Zs and Boomers cited lack of career development as the top reason for leaving their current position.
 
However, according to PWC, 69% of Millennials working in Financial Services said that outdated management styles and rigid hierarchies hindered their ability to progress and 52% felt senior managers failed to relate to younger workers. All of this can cause intergenerational tensions in the workplace.
 
As a manager, first you need to detect these threats in your organisation, and then you need to remedy them.
 
Here we share 3 tips for effective multigenerational workforce management, that should help to tackle the aforementioned challenges.
 
 
1. Focus on life stages, not the generational divide
 
Get rid of pre-determined assumptions about generations. Generational tags, although used in this article, do tend to oversimplify diversity despite life no longer being as synchronised as it once was.
 
Rather than focusing on a particular type of culture, organisations should provide an environment that acknowledges and supports a wide range of personal and professional needs.
 
Boomers, for example, are usually said to be reluctant to embrace digitalisation but, while they’re not digital natives, they do acknowledge their need for upskilling & reskilling and can actually bring their +20 years of expertise in the financial services to the table. This way, bank tellers can become digital ambassadors by using analytics to predict customers' needs beyond basic transactions.
 
Jon Mannall, EMEA Managing Director for Enterprise Solutions at Hays added: “Removing stereotypes and biases linked to fixed generational structures has immense value. When we shift from numbers to names, we put people back at the heart of every action and decision an organisation makes."
 
Recruiting, developing, and retaining the right talent requires an understanding of key factors for workers at different stages of their lives, whether these are specific to compensation, career development, flexibility, or purpose.
 
 
2. Create psychologically safe working environments
 
Diverse teams are often linked to innovation and creativity, across all industries, not just Finance and Insurance. However, research has shown that heterogeneous teams often underperform compared to homogeneous ones. This is because people with similar backgrounds share norms and assumptions about behavior, priorities, and workflow. When team members come from different backgrounds, these taken-for-granted habits tend to clash. Here are some ideas to build trust:
 
  • Create room for different perspectives and encourage your team to get comfortable being uncomfortable by creating a safe space to challenge their unconscious biases and explore differing beliefs.
  • Work to understand your employees' preferred communication means and expectations - and respect these decisions.
Challenge your own preconceived ideas. We often assume that younger workforce members prefer ‘digital first’ communications such as instant messaging apps. But in an era of information overload, some may welcome interactions with colleagues via an in-person meeting, which can also become an opportunity for greater collaboration or knowledge exchange.
 
 
3. Foster a culture of knowledge sharing, mentoring and training
 
What do high performing teams in the financial services industry have in common? They all benefit from varied perspectives and information sources. Therefore, it's important to cultivate a culture that encourages knowledge and opinion sharing from all parties.
 
An option could be to set up a mentoring, or even reverse-mentoring programme, in which individuals from different lifecycle stages are paired up and encouraged to support each other by sharing their insights into specific areas of expertise. Whether that’s younger workers helping to teach their older colleagues or vice versa, this could include technical skills around navigating blockchain technology, AI, machine learning or other big data functions, or the ‘softer’ skills needed to succeed in teamwork including adaptability, creativity and problem-solving. Axa pioneered the implementation of this type of programme with an astounding 97% of mentors and mentees recommending the experience.
 
A growing number of Financial Services organisations are turning to more formal learning and development programmes, including the ‘Hire-Train-Deploy' (HTD) model. HTD recruits candidates based on skills, rather than previous work experience. These individuals receive a salary and undergo a structured training and assessment programme, before joining an employer for a predetermined contract period.
 
Although HTD models are usually associated with younger workers, the structure and stability provided has also proven attractive to individuals approaching the end of their career. Barclays are leading the way with the “Bolder Apprenticeship” and “Welcome Back” programmes, two apprenticeships to reenter the workforce and boost employees' confidence to have a more positive outlook on life.
 
As education is at the core of the HTD model, individuals are trained for a defined job function. This guarantees employees' expertise and fit for the company.
 
 

Bringing generations together

 
Companies around the world are experiencing talent shortages and productivity declines, putting increasing pressure on leaders to make the most of their teams.
 
Managing a multigenerational workforce in the Financial Services sector is not an easy task, but it can also be a source of competitive advantage and growth. By following the tips we have shared in this article, you can leverage the diversity and strengths of your team, and create a positive and productive work environment for all. Remember, it all starts with empathy, understanding, and communication.
 
Could age diversity be your competitive advantage in the Financial Services industry? Get in touch for further consultation.

 

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