A Surprising Hiring Binge in Finance

Why are two large financial services firms hiring en masse while the US economy struggles?

You would assume that any firm planning on adding thousands of employees over the next few months must be a grocer, a pharmacy chain, or Amazon (which is a little of both).

But in the latest example of bold leadership moves in the face of COVID-19, the financial services firms Fidelity Investments and Fifth Third Bank have announced what amount to hiring sprees. Even as organizations around the country—including some of their peers—are laying off people, the two companies say that they need to add more personnel skilled in retail banking, customer service, and other roles to soak up a surge in demand brought on by the COVID-19 outbreak. “It’s about surrounding the customer,” says Eric Pikus, head of Korn Ferry’s Global Financial Services practice in North America.

On the surface, banking wouldn’t seem essential in a pandemic, especially since many customers, fearing the highly contagious coronavirus, aren’t willing to go to the nation’s more than 77,000 bank branches or use ATM machines. And historically, economic downturns, caused by pandemics or otherwise, aren’t great times for banks since many individuals and businesses default on existing loans and fewer companies are willing to borrow money to finance expansion plans.

But experts say there has been a spike in basic banking and lending, triggered both by social-distancing mandates and the $2 trillion federal coronavirus bailout program. Bank call centers are becoming overwhelmed, lenders are processing significantly more loan applications, and investment bankers are working on more corporate restructuring requests. “In large part, the hiring that we are seeing in the financial services sector is dealing with the immediate economic shock,” says Scott Macfarlane, global account lead for Korn Ferry’s Financial Services practice.

To be sure, Fidelity and Fifth Third are exceptions in the financial industry. Most firms have instituted hiring freezes, making some exceptions for executive searches that were underway before the outbreak hit, says Chad Astmann, global cohead of Korn Ferry’s Asset and Wealth Management practice. Indeed, hiring people is expensive, and some industry analysts wonder whether the coronavirus-spurred business will last once the pandemic fades.

In place of more hiring, many financial services firms have moved existing workers who may have seen their workloads diminish into more customer service, processing, and product solutions roles. “They’re shifting surplus capacity to areas that need capacity,” Macfarlane says. Leaders are now cross-training employees, like HR representatives, to handle other parts of the business, such as claims or lending, which have both seen spikes in customer activity, according to experts. Banks also have to rely on technology they’ve used only sparingly before the crisis, such as customer video conferencing and electronic document signing. “The pandemic has really amplified the need and urgency for investment in digital,” says Pikus.

Whether they are hiring new workers or retaining existing ones, banks have to do nearly all of their talent management work while working remotely. Experts say remote work has hampered standard logistics and onboarding procedures. At the same time, many firms have had to provide on-the-fly training and support to interview teams that may be less experienced with virtual technology. References and virtual assessments like psychometric testing have also become more critical to hiring decisions.