As talent becomes harder to find locally, financial services companies will increasingly be composed of a global, highly diverse workforce. HR will need to reinvent itself to remain relevant and help navigate a complex and changing global labor market.

Banks and insurers have been marching to the drumbeat of globalization for over 20 years, and managing globalization remains at the top of many c-suite executives’ strategic agendas. Over the course of this series of blogs, I’ll look at how HR organizations in financial services can reinvent themselves to thrive in a globalized era.

At the outset, it’s worth looking at why and how banks and insurers have globalized their businesses. For some, the appeal lies in the market opportunities offered by the growing population and economies in countries like China, India, and Brazil. Even with an economic slowdown in many emerging markets, this trend seems likely to continue.

In addition, financial services companies are increasingly tapping into a global talent pool to reduce operational costs or access new skills pools. For example, many banks and insurers have established operations like call centers in countries where labor costs aren’t as high. More and more organizations are also turning to other countries for labor to find scarce skills and to source the best available talent—wherever that talent may reside.

In part, companies are driven to do so due to the shortage of talent in local markets. In financial services, the supply of talent is no longer where it used to be, and companies must now look globally across all labor pools (e.g., new hires, contingent workers, outsourcing, or partnerships) to fill their talent needs.

What’s more, recent advances in technology now enable people all over the world to work together on a scale never seen before. Cloud computing, new social and collaboration tools, and advances in remote access enable many jobs, such as call centers and software development, to be easily carried out remotely. The digitization of work has also lowered the cost of global communications and business computing, and has led to shared business standards throughout much of the world.

As more financial services organizations push to globalize, they face a far more complex global landscape than they’ve ever encountered before. As more multinationals emerge from every corner of the globe with rapid speed, they face sometimes unpredictable—and far fiercer—competition.

Financial services companies also face significant challenges related to navigating a complex and ever-changing sea of local regulatory environments as well as changing local talent markets and customer needs and preferences. To thrive in this challenging environment, companies must realign their talent strategies with their global footprint.

They must learn how to operate in global virtual teams comprising people who have a deep understanding of cultural nuances. In the next post in this series, I’ll consider the role that HR has to play in helping the enterprise achieve the global awareness, and cross-cultural teaming and collaboration skills in needs to thrive in this world.

Learn more here: Reconfiguring the global talent landscape  

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