2024 human capital trends in financial services

When people thrive, business thrives

Human sustainability reflects the degree to which an organization creates value for people as human beings, leaving them with greater health and well-being, stronger skills, greater employability, opportunities for advancement, progress toward equity, increased belonging, and heightened connection to purpose. Yet, survey results show action lags behind ideals in the financial services industry.

For true human sustainability, financial services organizations need to create value for all people connected to them. To do so, organizations should demonstrate the bottom-line value of human sustainability—improved productivity and enhanced delivery—and integrate human sustainability governance into the board and C-suite. Prioritizing human sustainability could also look like engaging current and future workers to define metrics that measure human outcomes and enabling managers to own and advance human sustainability initiatives through growth opportunities, incentives, and rewards.

Could less transparency be more when it comes to trust?

Technology can make almost everything and everyone in an organization transparent based on data from sensors, software, and systems. 83% of financial services respondents say that the more transparent the organization is, the greater the workforce trust. But it’s not that simple.

Leaders should bring workers together in conversations about what and why information should be made transparent, to whom, and how. When defining an approach for transparent information sharing, leaders should address the following questions: What will be made transparent? Why is it important to make transparent? Who will provide the information and who will receive it? How will the information be made transparent?

Play and experimentation in digital playgrounds can drive human performance

Digital playgrounds offer a unique mindset and approach in which technologies are curated with intention and opportunities to use them are democratized; a safe space for workers to build confidence, learn new skills, and hone their human capabilities. Some examples of digital playgrounds include Generative AI, digital twins, digital doppelgangers, augmented and virtual reality, and more.

While 52% of respondents from financial services acknowledge the importance of reimagining work through digital playgrounds, only 26% are making efforts to ensure human imagination and curiosity keep pace with tech innovation. To take action, organizations should ensure equal access to digital tools, thus fostering inclusion and empowerment among all employees. Cultivating a culture of curiosity and experimentation is key by encouraging workers to explore digital tools and integrate their use into everyday tasks. This approach fuels innovation, enhances skills, and aids problem-solving. Cross-functional collaboration and knowledge exchange should be encouraged to harness diverse expertise and perspectives. Digital playground initiatives should align with human sustainability goals, bolstering not only technical skills but also mental, emotional, and social resilience amidst rapid technological changes. Lastly, establishing clear data usage protocols is crucial to guarantee privacy, autonomy, and active worker participation in decision-making.

One size does not fit all

Microcultures are subtle variations in how work gets done in different teams, functions, and geographies while aligning to global values. It is generally agreed that microcultures in the workplace are important. 41% of financial services respondents report that a moderate level of diversity in how work is done boosts organizational success, a sentiment that’s 8% less prevalent compared to other industries. While 46% of financial services respondents consider there should be organization-wide, standard practices for each team to follow with some flexibility, a perception shared by 38% in other industries, only 13% believe that each team should have its own ways of working.

To foster workplace microcultures, organizations should define microcultures based on how work is conducted, enabling targeted interventions in line with organizational objectives. It is also key to incorporate microcultures into the talent lifecycle and to empower leaders to be “modular” when navigating diverse microcultures. A final way to address this is to provide teams with tools for continuous monitoring of culture, enabling proactive interventions to maintain alignment with organizational goals.

From function to discipline

Boundaryless HR is the shift of HR from a specialized function that owns most workforce responsibility to a boundaryless discipline, cocreated and integrated with the people, business, and community it serves. In financial services, major changes in human capital have shifted the focus from compliance and deliverables to cross-disciplinary strategy.

Organizations can action towards boundaryless HR by redefining managers as “people leaders”. They should develop new metrics and analytics shared across functions and democratize people practices and data with AI and digital tools, establishing science-based processes that enhance performance. The creation of cross-functional teams or “integrator” roles can address business and people issues while workers should be encouraged to become producers of people practices, not just consumers. Lastly, collaborations and partnerships with external entities can further support this transformation.

How can leaders embrace and drive this new way of working that is both high tech and human-driven?

Digital transformation is shaping the evolving demands of workers, and leaders recognize that uniquely human outcomes drive business results enabled by technology. Financial services leaders must start tapping into the potential business outcomes by responding to and interacting with the cross-functional needs of their workforce. These include focusing on human sustainability and outcomes, nurturing trust and collaboration, fostering microcultures conducive to experimentation, and cocreating strategies and solutions with their workers.

Because of this disconnect, it is clear there is much work to be done. Leaders should prioritize establishing strategies for responsible use of data and tapping into emerging technologies as an accelerator to developing human capabilities. Organizations should also empower leaders to improve human performance and invite workers to cocreate and ideate alongside leadership.