How to hire and train for treasury management success

Good help is hard to find. What sounds like a cliché rings truer than ever for financial institutions, where talent woes are putting treasury management’s future at risk. Deluxe recently interviewed treasury executives who expressed unanimous concern about staffing; participants believed attracting, developing and retaining talent will be significant barriers to treasury management’s future success. Here are treasury’s top staffing challenges and how financial institutions can overcome them to hire, retain and train for treasury management success.

Treasury management hiring, retention and training challenges

Factors such as low interest rates and the war for low-cost commercial deposits have FIs turning to treasury management’s ability to generate new deposits and fee-based income as a way to grow revenue. However, a talent shortage threatens treasury’s capabilities. In fact, treasury leaders are concerned that without new, innovative thinking, treasury management relationships – and the future viability of the function – are at risk for financial institutions of all sizes.

Talent woes stem from treasury’s failure to adapt to heavy competition from Fintechs and to establish strategic succession plans. It’s difficult to land the brightest young minds when other opportunities are more attractive.

The Fintech cool factor is (partly) to blame

Recruiting and team development are not keeping pace with the aging of the current workforce. The inability to attract and retain younger talent is beginning to impact banks’ ability to compete with Fintech solutions, deliver product innovations and improve the customer experience. In other words, Fintechs are attracting talent that would normally go to banks.

Fintechs are winning the talent wars by leveraging the cool factor associated with a start-up culture: a relaxed work environment, casual dress codes, flexible schedules and even ping pong tables and craft beer. Perhaps more importantly, many young workers believe Fintechs enable them to make a more immediate impact with their work. By contrast, working 9 to 5 at a financial institution can seem stodgy.

Lack of bench strength and future leadership

Succession planning and future treasury leadership are also in question. As experienced treasury management resources retire, banks are not finding enough people with the right skills, treasury management knowledge or industry experience to fill open positions.

Treasury management suffers from a lack of internal bench strength and a limited number of candidates qualified to take on leadership roles. Part of the problem is losing talent to Fintechs, but a failure to establish a formal succession plan that transfers knowledge to younger staff is also a primary culprit.

Without a formal succession plan, there’s no clear path to career advancement, either. That makes working for financial institutions less attractive to top talent and contributes to the Fintech exodus.

7 high-level tactics to reinvigorate treasury’s appeal to young professionals

High quality talent is essential for treasury management success. Since all FIs (and Fintechs) are competing for the same limited pool of younger workers, it’s critical for treasury to market its positive qualities more aggressively. Here are seven high-level tactics that empower banks to hire, retain and train younger professionals and attract them to careers in treasury management.

1. Cultivate a new, innovative culture

While no one is suggesting banks install a kegerator in the break room, cultivating a new, innovative culture can help attract a younger talent pool. Financial institutions should study Fintechs and identify ways to improve internal culture.

Opportunities for culture change might include flexible hours or a work schedule that suits the Millennial mindset (for example, a four-day work week). Employee recognition programs, team building activities and even staff retreats reinforce the idea that treasury management can be fun and exciting.

An innovative culture can work hand-in-hand with benchmark achievement. For example, banks can set treasury management goals such as new accounts and deposit volumes. Employees who reach those goals can earn recognition and rewards. This type of workplace “gamification” fosters a fun environment that enables employees to make the immediate impact they seek while they simultaneously improve the bank’s bottom line.

2. Launch a mentor program

Formal mentoring programs are another option to attract younger works. These programs provide senior staff an opportunity for knowledge transfer, while simultaneously encouraging a steady pipeline of future leaders. Mentoring can be a marketable advantage among job seekers.

Dedication and consistency are important attributes of a good mentor program. Banks should set guidelines and identify opportunities to work mentorship into staff schedules. The most important knowledge should be prioritized; indeed, a mentor program might mimic formal training, complete with a “curriculum.”

Younger staff might be granted the opportunity to shadow leadership and ask questions as they arise so they can gain not only knowledge, but also the experience and skills needed to take the reigns when the time comes. Financial institutions might also give young employees increased responsibilities or the opportunity to tackle complex programs with mentor guidance.

3. Establish a path to career advancement

A mentor program is a powerful way to attract young talent, but it should be coupled with a clear path to career advancement. While young employees might find mentorship and training attractive, they’re unlikely willing to wait in the wings indefinitely. Thus, career advancement potential is an important part of employee retention.

Financial institutions might create formal promotion “steps” based on experience or accolades. Improved wages, benefits packages and professional titles are part of the equation, but so are opportunities to take on more meaningful roles within the organization. Management and leadership are important to many career-minded employees, as is the ability to play a role in the strategic decision-making process.

Banks that wish to retain top talent can identify and establish ways to foster consistent career advancement within the existing organizational structure. In other words, one employee’s promotion shouldn’t be solely predicated on another employee’s retirement. It’s a challenge, especially when working with limited budgets, but it’s one innovative banks will overcome to keep the best talent in-house.

4. Develop a dedicated treasury product management group

Dedicated treasury product management groups are responsible for product development and pricing. Developing a dedicated treasury product management group enables banks to empower employees to tackle strategic initiatives, develop innovative new technology products and have a direct impact on the bank’s bottom line.

The benefits are multiple. First, a dedicated treasury product management group can identify new opportunities to compete against Fintech disruptors and other marketplace threats. They can enhance the customer experience and create new offerings that ultimately yield greater banking profits. Second, a dedicated treasury product management group satisfies the need for employees to make an immediate and meaningful impact. Retention is easier when work is fulfilling.

Finally, a dedicated treasury product management group creates opportunities for career advancement within the current organizational structure. Young employees do not need to wait for an experienced employee to retire to move up the ladder and get involved with strategic decisions.

5. Elevate treasury’s stature

A self-sustaining, strategic and highly visible treasury holds greater appeal to ambitious young professionals. As treasury transforms from a back-office administrative support function into a revenue driver for financial institutions, working within the department carries greater perceived signifcance. Treasury employees are no longer considered resources at the disposal of other departments, but as true leaders in the financial industry.

Elevating treasury’s stature involves educating executive leadership about treasury’s role as a revenue engine in a new digital frontier. Treasury must earn a seat at the table for strategic corporate decisions, and it must illustrate how it can drive greater profits through innovative technology products and partnerships, an enhanced customer experience, higher deposit volume and more fee-based income.

The bottom line is treasury needs to prove its value to the organization; when executive leadership perceives treasury as a high-value function, it can justify allocating resources for treasury growth. That, in turn, makes it easier to attract and retain top talent.

6. Evaluate strengths

Treasury management should proactively work with human resources and senior leaders to shore up opportunity areas and create more competitive offers. That starts by taking a hard look at every function’s strengths and weaknesses from the perspective of prospective candidates.

Banks should not be afraid to compare themselves to Fintechs; rather, they should recognize the opportunity to identify distinct advantages of working for financial institutions. For example, where Fintech start-ups are sexy, they’re also potentially unstable – in contrast, banks offer strength, stability and job security built on decades of success.

Mentorship programs, career advancement paths and product development groups are also strengths for banks that establish them. Where Fintechs are often lean organizations that cherry-pick the most profitable portions of treasury management – therefore self-limiting their service offerings – banks can offer a wider breadth of services and handle all aspects of client financial needs. That presents greater opportunities to profit, advance and specialize within a single organization; and that can be an attractive pitch to prospective candidates.

7. Market aggressively

Once banks have taken stock of their strengths, they should aggressively market those strengths to job candidates. Financial institutions must appeal to the next generation of talent, and that means going well beyond a banner hung at career days.

Employment benefits – including mentorship, career advancement and work experience – should be included on job postings, both online and off. Treasury should work with the marketing department to produce posters, brochures and digital assets that clearly communicate why working at a given financial institution is an outstanding and potentially lucrative career opportunity.

Treasury should also work with human resources and senior leaders to ensure employment benefits are communicated during the hiring process, from interviewing to onboarding. Marketing doesn’t stop with hiring, either; banks need to continually communicate internal opportunities for training and advancement to retain top talent for life. Employees must be considered long-term investments, and banks that take a vested interest in employees’ lives position themselves to attract and retain the most talented young minds.

For FIs large and small, treasury leaders must make hiring, training and retaining key positions a top priority. As much as technology will influence the direction for an FI’s treasury management business, experienced professionals still need to make decisions about strategy, priorities, investments and relationships. Cultivating a new, innovative culture, establishing mentorship and career advancement programs, fostering leadership roles in product development, elevating treasury’s stature and aggressively marketing its strengths are critical to attracting and retaining the talent needed to compete in today’s financial landscape.

The information provided in this blog does not, and is not intended to, constitute legal or financial advice.