Financial and Insurance Activities
Finance’s Tightening Labor Market
What the Data Says About the Financial and Insurance Industry’s Outlook
The finance and insurance industry urgently needs younger workers skilled in compliance as employees in these roles retire, and to compete with the tech sector for disruptive skills. Immigration, globalization, and automation are viable levers in some roles, but this industry’s specialization requires upskilling and retention strategies among rapid regulatory and technology shifts.
Risk Factors
2.7
Labor Supply
Retirements of workers with regulatory experience, coupled with a need to attract younger, tech-savvy workers to keep pace with rapidly evolving innovation, drives a substantial shortage of qualified professionals. AI and automation can help supplement labor shortages in some roles, but the demographic-skills mismatch is tightening the market.
3.7
Labor Demand
Digital banking, online insurance, and fintech drive demand for tech-oriented roles. Complex financial laws and data privacy requirements increase demand for workers specialized in compliance, risk management, and regulatory tech, while consumers expect seamless, personalized experiences, driving demand for data analysts who can improve products.
3.5
Unemployment Rate
In regions where major financial centers are located, the competition for talent is even tighter. While this industry does benefit from remote or overseas workers to expand locations, skills remain specialized and regulatory in nature, limiting the availability from the general labor pool and closely competing with the tech sector.
3.4
Disruptive Skills
Finance and insurance companies have made strides in adopting new technologies, like AI, blockchain, and machine learning, but this tech is also reshaping the skills landscape. Cybersecurity skills to meet regulatory demands, along with data analytics specifically applied to financial interpretations are both in high demand.
Methodology
Lightcast has conducted an in-depth analysis of 627 of Fortune 1000 companies across the globe to grade the threat that the shrinking labor force wil have across various industries. To note, the grades are not based upon anything that companies are doing wrong, but instead to demonstrate the external factors impacting the ability of industries to maintain a future-ready workforce in an Increasingly disruptive landscape.
Grading Definitions:
Workforce Readiness Outlook
Labor Supply Grade
The overall score for the top 15 (or fewer) markets. A high grade means that the markets have high volumes of workers, a low grade means that the markets have a comparatively low labor supply.
Demand Grade
Combination of the two scores for working age population and Fortune 1000 job postings and Key Competitor presence. A high grade means that, comparatively, the company is not in markets with a lot of other major consumers of talent.
Unemployment Rate Grade
The overall score for the top 15 (or fewer) markets. A high grade means that the markets have higher unemployment rates which will allow longer periods of hiring into the future without enormous pressure on wages. A low grade shows that the unemployment rate is already tight and cannot handle further hiring going forward.
Disruptive Skills
The balance of skills companies are exposed to that are both hard to tind and expensive to acquire. An imbalanced exposure means having either too many skills everyone wants to hire, or too lew skills that organizations will need to catch up to competitors tor.
Solving Financial and Insurance Activities Workforce Management
Talent Analyst
Effectively Bridging Skills Gaps
To deliver on both technology demands and regulatory requirements, leaders need to address the skills mismatch in fintech, data science, and cybersecurity, as well as compliance, risk management, and regulatory technology. Detailed role and skill profiles within the context of the broader market enable upskilling strategies both for critical tech and regulatory roles, while aligning learning paths to pace ahead of competition in disruptive skills. Competitive benchmarking of compensation and skill demand in both this industry and adjacent industries better target, attract, and retain talent.
Use Skills to Fortify the Employee Lifecycle
A leading financial services enterprise is using Talent Transform to identify and solve skills gaps across the employee lifecycle. By aligning its internal talent data with Lightcast’s skills taxonomy, leveraging integration with Workday, the company has built skill profiles to create career pathways, incorporate upskilling plans into its learning and development platform, and accelerate internal mobility. An external view of talent pools, compensation trends, and competitor insights unlocked benchmarking against the broader market, advancing skills-based hiring and lowering recruiting costs.
Talent Transform
Expanding Regional Market Reach
To tackle labor shortages, increased service demand, and regional talent competition, finance and insurance companies need to broaden sourcing strategies, especially when competing for tech talent. Real-time data on regions with skills from adjacent industries, higher unemployment rates, or graduates from schools in applicable fields expand sourcing pools and guide both remote work strategies and options for regional offices. Benchmarking compensation against these markets ensures attractive offers, while also alleviating wage pressures.
Use Data to Target Untapped Talent
A global insurance company uses Talent Analyst to structure its job architecture and skills taxonomy to map to the markets in which it operates to inform talent sourcing and location strategy. Global labor market data has pinpointed lower-competition areas, as well as competitor pay bands across geographies. By using College Analyst, it has identified top schools that produce graduates in skills-aligned fields for early-career recruiting. Standardized roles, skill paths, and pay transparency has unlocked the enterprise’s ability to source talent more broadly and upskill more strategically.
