July 01, 2009

Deloatch adds that the crisis actually may spur Fifth Third to ramp up resources and staff in certain areas to help the bank better cope with today’s economic turmoil. “We consider IT resource planning critical at all times, independent of the current macroeconomic situation. However, the state of the economy will drive certain actions or priorities. In today’s case it will drive actions to strengthen the credit risk domain and build a queue for our growth strategies coming out of this credit cycle.”

For consultant Johnson, there’s no better time than the present to cultivate banks’ future leaders. “At least one study shows 60 percent of companies say business performance is suffering because of a failure to prepare people for leadership,” she asserts. “There is more of a variety of generations in the workforce now. Challenging times are when you want to develop your future leaders.”

Still, banks may want to approach their training and internship programs more cost-effectively. For instance, BAI’s Bianucci says, paid internships may be sacrificed in this economic environment. “Both B.A. graduates and M.A. graduates are having trouble finding employment,” she adds, noting that this can be beneficial for banks looking for talent. “There may actually be more people interested in internships, even if they’re not paid, so they can get their foot in the door of a company once hiring picks up.”

Another potential positive of the economic slowdown is that it just may have delayed the long-feared mass retirement of baby boomers from the industry. When boomers do finally retire, their knowledge of many of the antiquated IT systems running in banks will go with them.

“This [problem] will not be solved overnight,” says Fifth Third’s Deloatch. “It will take planning and sustainable execution on the hiring front. In our case this consists of our two-year training program, university board memberships and intern assignments for early identification. For those who have not been addressing this change, yes, it could be a big issue for them.”

BAI’s Bianucci cites one study conducted in early 2008 of the impact of the expected mass retirements in the financial services industry that found that 40 percent of the executives running U.S. banks would retire in just five years. “That’s a huge wave, and it can leave a potential leadership gap on the technology side,” she says. “These are all the people with legacy information in their heads. But then the world changed in late 2008. Maybe retirement is now 10 years off for these people.”

HSBC’s Couture insists the bank’s strong set of business training and succession programs will ensure that there is an effective continuity of business activities when employees retire or leave. “Moreover,” he adds, “I personally think the impact of baby boomer [retirement] is mitigated as more people choose to — or, in some cases, have to — work longer.”

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