The Executive Summary reported by Bank Director’s VP of Research, Emily McCormick, describes the 2020 Bank Director Compensation Survey:
Throughout the Covid-19 pandemic, banks have relied on their employees to counsel customers and process billions of dollars of Paycheck Protection Program loans — not to mention working behind the scenes as they adapt to a virtual work environment.
The crisis reinforces the old adage that good talent is hard to find. “Hire right,” investor Ray Dalio once wrote. “The penalties of hiring wrong are huge.”
Bank Director’s 2020 Compensation Survey, sponsored by Compensation Advisors, confirms that talent can be difficult to find in key areas. More than 70% of directors, CEOs, human resources officers and other senior executives responding to the survey point to skills that are particularly difficult to hire and retain, such as information security, technology, lending and risk.
But hiring less-skilled staff also proves challenging: Half indicate that it’s “somewhat” or “very” difficult to attract and retain entry-level employees who fit into the organization’s culture. What’s more, concerns around recruiting younger talent have risen slightly in the past three years: 30% cite this as a top-three challenge this year, compared to 21% in 2017.
Yet, 79% believe their bank offers an effective compensation package that helps attract and retain top talent.
This apparent disconnect could stem from the generation gap between bank leadership and younger staff. Two-thirds of survey respondents are over 55, while more than half of their bank’s workforce is 45 or younger. One can infer that these employees, mostly Gen Z and millennials, primarily occupy entry and mid-level positions.
The survey was distributed in March and April, as the coronavirus forced banks to rapidly shift operations to work-from-home arrangements and adjust branch procedures. Ninety-two percent of respondents indicate their bank instituted or expanded remote work, and 80% introduced or expanded flexible scheduling in response to Covid-19. As the industry emerges from this crisis, how will this impact corporate culture moving forward, as well as expectations from prospective employees?
