Guide to Employee Engagement and Retention in Financial Services Industry

by Kylee Stone Jul 5,2023
Engagedly
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Employee engagement is a workplace strategy to strengthen a worker’s commitment and emotional ties to the organization. It includes many initiatives regarding employees’ job roles, placement within the company, interpersonal relationships with fellow employees, and company culture. One of the most important roles of Human Resource professionals is to use employee engagement methods to boost well-being and productivity across all company levels.

Employee engagement programs aim to foster a culture wherein employees are motivated to put their best foot forward daily. The program also aims to inspire employees to contribute to the company’s overall performance by ensuring they are dedicated to its purpose, goals, and values. A highly engaged workforce is directly proportional to lower turnover, higher employee morale, and stronger business outcomes.

Employee Engagement in Finance Industry

The financial service industry forms an important part of a country’s economy and is always evolving and growing. Banks, in particular, have witnessed explosive growth and expansion over the last decade. Rising incomes have further propelled the need for financial services resulting in a great boom in advanced technology and prompt communication systems.

What fuels the finance service industry’s growth is a team of committed employees enhancing the customer experience and making the brand credible. However, the banking industry faces significant challenges in managing its talent. A survey by Gallup concludes that only 23% of employees feel engaged at work. Although the percentage has increased remarkably, not even 1 in every 4 workers is engaged, so there is definite room for improvement.

The banking sector has traditionally struggled with employee engagement. The outcome is a high staff turnover rate and absenteeism in the sector. The banking sector has been facing the highest turnover rates, at 18.6%, according to a Compdata survey.

Also read: How to Recognize the Warning Signs of Employee Disengagement

Importance of Employee Engagement in the Finance Industry

Importance of Employee Engagement in the Finance Industry

Developing and sustaining employee engagement is pivotal to every industry, especially as “the great resignation” has triggered a high competition for talent in organizations across the globe. Implementing employee engagement initiatives in the finance sector can enable employees to influence decisions, perform at their best, and drive business outcomes.

Engaging with their job, company, and colleagues makes employees feel more energized and efficient, and they go beyond what’s expected. Naturally, this nurtures their mental health at work and can positively influence colleagues and customers around them.

At the company level, employee engagement increases overall profitability. According to a Gallup analysis, highly engaged organizations observe 20% higher sales than disengaged ones.

Here are a few more benefits of an effective employee engagement program at the workplace:

  • Engaged employees are likelier to stick with their employer. They feel emotionally connected to the company and commit themselves to the development and success of the company’s bottom line.
  • Engaged employees are emotionally and professionally competent to accept new and challenging tasks.
  • Engaged workers feel responsible and do not hesitate to discuss company-wide issues with their peers and management.
  • An effective employee engagement program transforms the workplace into a vibrant and exciting workplace. 
  • Prioritizing employee engagement helps staff create and deliver enhanced customer experiences that improve the company’s competitive position and increase brand equity.
  • Engaged employees are productive brand ambassadors, allowing banks to attract more talent in today’s competitive labor market.
  • A report on employee retention trends in financial services by PWC states that 53% of finance professionals consider changing jobs within a year of joining. A strong employee engagement program can aid employee retention strategies with the financial service industry facing a great reshuffle.

Key Employee Retention Strategies for Employee engagement in finance industry

key retention strategy

With high turnover and high levels of absenteeism dominating the finance industry, an effective employee engagement strategy can strengthen the relationship between the employer and the employee. Here are the top 4 drivers of employee engagement to keep in mind for optimal results:

Leverage Employee’s Strengths

Employees want a job they find interesting and enjoy. Making the job role challenging can help interest employees. Job roles should be devised to leverage an employee’s strengths. Additionally, a well-drafted job description can help employees understand their organizational roles and responsibilities well. This, in turn, eliminates any ambiguity regarding the workflow.

How to achieve this:

  • The job description and necessary professional qualifications should be explicit throughout the application and interview.
  • Obtain regular feedback from the employee to understand their perceptions.
  • Provide opportunities for employees to put their strengths to use. Have an open communication about career advancement and progression opportunities.
  • Invest in training and development programs. One of the most important components of employee engagement is the opportunity for personal and professional development. In one study, 92% of the employees feel that access to learning and development opportunities would increase their job engagement. Data demonstrates that a more engaged staff provides superior customer service.

Run a Reward and Recognition Program

An effective staff reward and recognition program is a fantastic approach to giving constructive criticism and encouraging both small-scale and large-scale progress. A study found a significant link between appreciating employees’ efforts and happy workers. 83% of workers employed by a firm with a recognition program expressed satisfaction with their positions. A valuable tool for attracting and keeping the top personnel, a reward and recognition program promotes a respectful work atmosphere.

There is a very subtle difference between employee recognition and reward. Acknowledging your team’s efforts and accomplishments is known as employee recognition. However, rewards (monetary or non-monetary) may be utilized as a motivator to increase performance.

What components to choose when recognizing and rewarding employees:

  • Private and public recognition
  • A raise or promotion
  • A company-wide awards function
  • Monetary rewards or coupons
  • A company or team-wide email appreciating the individual
  • Extra time-offs
  • Paid vacation days for the employee’s family
  • Recognizing both team and individual efforts
Also read: 10 Ways to make your Employee Recognition Program a Success

Listen to Your Employees

Active listening

One way to make employees feel valued is to hear their concerns, opinions, and grievances. Leaders should welcome employees’ input. Active listening helps organizations cultivate a culture where employees do not fear voicing their opinions and are open to receiving and giving feedback.

How to facilitate active listening:

  • Implement an open-door policy and take continuous feedback from employees.
  • Surveys and feedback systems are great tools for facilitating active listening. These forms can communicate collective concerns, issues, and feedback accurately and anonymously. It allows employers to be more informed about their team’s sentiments.
  • Avoid taking feedback personally.
  • Draft a plan or strategy to act on the feedback received.
  • Follow up and inform your employees about your plan of action.
  • Encourage employee feedback and communicate your appreciation.

Ensure Transparent Communication

A study reveals that organizations that readily share information with employees and encourage them to participate in company processes manage to develop a favorable reputation among employees and beyond. Transparent communication is one of the prime factors contributing to employee happiness.

Transparent communication also helps employees better cope with change. A study found that building trust based on transparent communication allows employees to better accept and cope with organizational changes. For instance, a change in the company’s management due to mergers and acquisitions might substantially affect an employee’s daily work life. Providing employees with real-time updates can help them prepare for changes to occur in the future.

How to promote transparent communication in the workplace:

  • Maintain a balance between expressing empathy and respecting privacy.
  • Use different channels of communication depending on their effectiveness and applicability.
  • Be clear about your values.
  • Avoid jargon; use words everyone can understand.
  • Share real-time updates.
  • Explain why certain information cannot be shared.
Also read: Why Does Workplace Communication Matter?

While the financial service sector has been navigating high turnover rates, prioritizing and improving employee engagement can help. Implement an employee retention strategy guide that supports employees and creates a top-performing workforce. 

Wrapping Up

When done with good intent, employee engagement can cultivate a positive work culture, resulting in more devoted employees and growth for the organization. Since absenteeism and turnover are major concerns in the industry, an effective employee engagement strategy is what the finance industry needs right now.

A robust employee engagement platform can help streamline your initiatives to build trust, facilitate communication, and introduce recognition programs. Engagedly is a multi-faceted platform that aims at improving the employee experience. Our cloud-based performance management software focuses on increasing employee engagement and helps HR professionals manage employee productivity and progress efficiently. Visit our website today!



Frequently Asked Questions

Q1. How can a business identify actively engaged employees?

Ans. Actively engaged employees are invested in their job roles and the company. They take initiative, possess good leadership and interpersonal skills, and have a positive outlook on the company’s future and strong work ethics.

Q2. What are some of the HR metrics to measure employee engagement?

Ans. The following HR metrics can be used to measure employee engagement:

Q3. What is the relation between employee engagement and KPIs?

Ans. KPIs or key performance indicators help increase employee engagement by providing accurate and insightful data to measure employee engagement levels. Additionally, it helps identify the causes of high turnover and absenteeism rates.

 


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Kylee Stone

Kylee Stone supports the professional services team as a CX intern and psychology SME. She leverages her innate creativity with extensive background in psychology to support client experience and organizational functions. Kylee is completing her master’s degree in Industrial-Organizational psychology at the University of Missouri Science and Technology emphasizing in Applied workplace psychology and Statistical Methods.

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