While the Great Resignation might have subsided, the Crowe Bank Compensation and Benefits Survey shows that banks continue to struggle to retain younger talent. According to the 2023 edition, nearly 65% of respondents noted it’s been somewhat or very challenging to remain competitive among the younger workforce population. In addition, officer-level turnover increased for the second year in a row – up from three per cent in 2021 to more than six per cent in 2023.
Crowe’s report compiles data from 388 financial service organizations and includes information on benefits, incentives, director compensation and current trends in key human capital management practices, as well as salary and bonus benchmarks for 272 job positions.
“A competitive job market has allowed both new and existing talent to evaluate what’s important,” said John Epperson, managing principal of financial services at Crowe. “Banks aren’t just competing for talent amongst their peers anymore, they’re often going head-to-head with organizations and industries that may offer more entrepreneurial experiences, flexibility and nontraditional accommodations.”
Banks have started addressing these concerns, with 70% allowing one or more days of remote work per week (compared to 52% last year). Nearly 11% indicated a willingness to hire fully remote positions in some areas.
“While keeping their workforce within a specific geographic footprint remains the most desirable for banks, they’re encountering a generation of employees that wants freedom and mobility,” said Stephanie White, financial services consulting senior manager at Crowe. “The adoption of trends like hybrid work shows that this once-traditional industry may finally be open to change.”
Epperson noted macroeconomic trends of industry convergence might also be transforming financial services.
“As banks continue to seek relevance, they’re looking for solutions and business models that provide value for their customers in new ways – often products and services not historically offered by banks. This is creating new roles and opportunities within banks that may help attract younger talent who, until now, looked toward technology-focused organizations and industries when seeking opportunities for innovation,” he said.
According to the Crowe survey, the leading turnover rationales at banks were lack of career development (45%) and inadequate total compensation (42%). Last year, there were significant pay increases across many industries, including financial services. Although still a factor in 2023, data shows those increases are beginning to normalize to pre-pandemic levels in the banking industry. For employees who met performance expectations, the average salary increase in 2023 was 4.5%, compared to 8.5% last year.
Among the roles with highest percentage pay increases from 2022 to 2023 were hourly positions, such as teller (2.4%-9%, varied by level), teller operations supervisor (14%) and item processing (nine per cent). Epperson noted the employees within this salary range have career options outside of financial services organizations that might come with less responsibility and more flexibility.
Other key Crowe survey findings include:
- Top reported human resource management issues included finding and retaining the right people, leader and employee development and performance motivation.
- The median salary of CEOs/presidents in 2023 was over $280,000, a 13% increase since 2021.
- The chief compliance officer saw the second largest one-year salary change among officers, with a 6% increase. According to White, this increase is likely because CCOs are tasked with overseeing an industry that’s under increased regulatory scrutiny, leading to a higher demand for this limited talent pool.
- The teller position remains the most difficult to fill. Since 2021, entry-level teller median salaries increased by 17% to nearly $32,000, and experienced teller median salaries increased by 15% to more than $33,000.
- The highest three-year percentage pay increase among all positions continued to be the top retail banking officer, with a median pay increase of 21% since 2021.
- Although diversity, equity and inclusion (DE&I) has come to the forefront in many industries in recent years, about 53% of survey respondents had not yet acted on DE&I initiatives at their own organizations.
