Wisconsin is expected to face a shortfall in financial services employees within the next 10 years, according to several reports aggregated by the Wisconsin Economic Development Corp.
In 2010, demand outstripped supply by 9 percent in the accounting and financial analysis cluster, according to the Be Bold 2 study conducted for the state by ManpowerGroup in 2010. If current trends hold, the gap will increase to 20 percent by 2016.
The insurance industry and other financial services firms are also facing gaps.
Compounding the shortage is the expected retirement of 45 percent of the current financial workforce over the next 10 to 20 years, said Lee Swindall, vice president of business and industry development at WEDC.
The WEDC convened a Financial Services Consortium last year to address the challenges. The consortium is made up of about 30 leaders representing 27 banks, credit unions, insurance companies and other financial services firms. It meets quarterly to identify workforce development needs, marketing challenges and educational goals for creating a skilled workforce pipeline going forward, Swindall said. The members recently formed task groups to address each of the main issues.
The consortium is evaluating changing financial business models, which are moving toward mobile platforms and creating a greater need for information technology employees.
“(Financial companies are) competing with other industries that have a like need for those same kinds of people, particularly in the IT space,” Swindall said.
The FSC will also look at the challenge of filling compliance officer positions in the wake of federal Dodd-Frank regulations.
Corey Hoze, senior vice president of government relations at Associated Banc-Corp and a member of the WEDC board, is a member of the consortium. He is based in Milwaukee and has been in the banking industry for about four years. He wants to get the word out to young people about the opportunities that exist in financial services careers.
“Until I started working for a bank, I wasn’t really aware of the career path that exists,” Hoze said. “One of the things that we’re working on is really trying to work with the universities and technical colleges to develop curriculum programs that really try to identify industry skill requirements in the workforce moving forward so that we can work towards that pipeline.” Several banks and financial institutions are making outreach efforts to students through financial literacy programs, he said. The programs will help increase financial literacy in local communities and raise awareness of potential financial careers.
The consortium is taking a multi-faceted approach to the expected shortfall in the workforce.
“It’s not a situation where any one particular bank is saying ‘We just can’t hire enough of one position,'” Hoze said. “It’s the projected shortfall that we’re looking at.”
Mike Croasdaile, senior vice president at GE Capital in Milwaukee, is also a consortium member. The group has been benchmarking off of several other industries, including manufacturing, that have experienced a “brain drain” and skills gap, he said.
If financial services organizations want to identify talent within the state, the first step is determining which educational pathways would prepare someone for an entry level position at their organizations, Croasdaile said.
As a campus recruiting leader for GE Capital at the University of Wisconsin-Madison, Croasdaile has seen firsthand the difficulty of attracting some students to less desirable financial services centers geographically.
It wasn’t the workforce issue alone that was the motivation to convene the Financial Services Consortium, Swindall said. Financial services are a driver industry in the state, making up between 16 and 20 percent of the GDP in a given year, he said. The state also wanted to find a way to help address the competitive challenges the industry faces and further engage the sector.
“There’s no other consortium of this kind in the United States that we’re aware of,” Swindall said. “Progressively, we want this to be more and more industry-led, which is sort of the model we’re following right now.”
Long term, the plan is for the FSC to become a permanent entity that continuously assesses the challenges facing the financial services industry, he said.
The financial services workforce shortage is part of a broader problem that many companies are experiencing nationally. It has also hit the manufacturing industry particularly hard. According to the Be Bold 2 study, 63 percent of Wisconsin’s population was of workforce age in 2010. By 2040, that number is expected to drop to 55 percent as some of the population ages out of the workforce.
The Wisconsin Bankers Association has also gotten involved with the FSC and has been happy with its progress, said Eric Skrum, director of communications for WBA.
“One of the focuses of this group has been to develop ways to attract and retain quality talent for the financial services industry, which in turn will help Wisconsin’s financial economy prosper,” he said.
The diverse range of financial services firms now has the tools they need to attract and retain quality talent, Skrum said.
“There has been quite a bit of talk about educating Wisconsin’s workforce over the last few years. It only makes sense to put that same effort into the workforce that serves as part of the state’s financial services industry,” he said.