Finding, hiring, and retaining the right people continues to present major challenges for the banking industry. The cause, at least in part, is the disconnect between the traditional nature of this industry and evolving employee expectations.
One way HR teams at regional and community banks can combat hiring and retention issues is by revamping company culture so it’s more attractive to top talent. Whether that’s creating remote work policies, showing the business’s impact on local communities, embracing new technology, or adjusting employee benefits packages, these changes show employees that your company’s core values align with their own.
Unfortunately, company leaders may not see the value of investing in culture change initiatives. But without their support, it can be hard — or even impossible — for HR to create meaningful change. Traditional industries, like banking, are notoriously resistant to change, especially if the return on their investment isn’t clear. But getting leaders on board with culture change is possible. Here’s what the experts recommend.
Why Banks Should Embrace Culture Change
Culture change is inevitable. Once upon a time, employees commuted to the office, collected their wages, and often stayed with one company for decades. But these days, “top talent — now more than ever — expects more than just a paycheck,” explained Rachel Barrett Cooke, founder of Lead Above Noise, a consultancy that specializes in retaining, engaging, and developing talent. “People want purpose, connection, workplace flexibility, balance, and much more.”
But Cooke noted that “more ‘traditional’ banking cultures didn’t necessarily prioritize these things.” The problem is, if employees don’t get that sense of purpose, they might walk away. This can impact retention and recruitment, particularly with younger generations for whom meaningful work is a priority. The 2023 Crowe Bank Compensation and Benefits Survey found that, for 64.9% of respondents in the financial industry, retaining young talent is “somewhat challenging” or “very challenging.”
When considering how to resolve these challenges of hiring and retention, cultural transformation is a crucial component of wider organizational changes. In fact, Gallup research has shown that when employees feel strongly connected with their organization’s culture, they’re four times as likely to be engaged at work, 62% less likely to feel burned out often or always, and 43% less likely to be looking for another job.
For HR teams looking to enact culture changes, the first step is to get leaders on board. “Leaders represent the most critical lever for culture change; unless leaders throughout the business embrace and role-model the mindsets and behaviors of the desired culture, it won’t work,” said Edmond Mellina, president and cofounder of organizational change consultancy ORCHANGO. “HR has no choice but to get leaders genuinely on board — and then work with and through them on shifting the culture.”
When leaders listen to their employees and embrace the kinds of cultural changes that better meet their needs, it makes it easier for regional and community banks to demonstrate their commitment to their people. In turn, this can have a positive impact on retention. “When employees feel trusted, supported, invested in, listened to, [and] empowered…they want to stay and grow with the company that made them feel this way,” said Cooke.
Sometimes, the best way to inspire change is to see what it looks like in practice. Here’s how leaders of regional and community banks are embracing culture change as they look to recruit and retain the next generation of bankers.
Embracing Culture Change: What it Looks Like in Practice
Each year, the Conference of State Bank Supervisors (CSBS) surveys community bankers across various topics. In the 2023 CSBS Annual Survey of Community Banks, the leaders below shared their thoughts on how financial institutions can adapt and evolve, as they look to attract new talent.
- Orvin Kimbrough, chairman and CEO of Midwest BankCentre noted in the survey that the hiring process starts before you even receive applications for open roles. “The next generation of bankers is looking for companies that are interested in more than making money; they want to know they’re making a difference in the world and that their work has purpose.” To communicate this purpose, Midwest BankCentre developed a social media strategy that includes a partnership between HR and marketing.
- At Pioneer Bank & Trust, leaders recognize that one of their largest responsibilities is creating a culture that speaks to their employees. “We are constantly reviewing, innovating, and surveying the market and our benefits package,” explained president and CEO Dylan Clarkson in the CSBS survey. This has led to the creation of a unique blend of benefits, like childcare assistance, designed to retain certain employee demographics. Community outreach at local events and functions also demonstrates their presence and helps recruitment efforts.
- Gregory Hayes, president and CEO of Kish Bank, recognizes that the current job market means his organization has had to adjust how they hire, retain, and develop their employees. After a period of increased employee turnover, Hayes and his team decided to provide additional clarity around the responsibilities of each role, and how potential new hires can develop their careers. “We are also elevating our training and development to ensure that those who are new to banking really feel prepared for the role; that they get gratification of performance and growth, as well as seeing progression in their responsibilities,” said Hayes in the CSBS survey.
To stay competitive in today’s market, embracing culture changes — as the leaders above recognize — is a must for regional and community banks. Here’s how HR can show their leadership teams and stakeholders just how important these company-wide change efforts are, and get the buy-in they need to make them happen.
5 Tips for Getting Executive Buy-In for Culture Changes
1. Lead with data.
Leadership teams, especially in the finance industry, tend to think in terms of numbers, data, and strategy. If you want to gain executive buy-in for any culture change management, presenting it in a way that makes sense to leadership can help “build the business case for change,” advised Mellina.
Rather than focusing on how culture changes within the work environment make employees happier or more engaged, focus on the bottom line. “Curate and present hard data to the leadership team around the business risks and costs associated with talent attrition, as well as lost opportunity due to inefficiency and lack of collaboration and innovation — impacts associated with employee disengagement,” Cooke said. “This drives executive buy-in.”
To keep conversations anchored in logic and data, use Lattice’s HR Metrics Slide Deck Template. With over 50 editable charts covering key HR metrics like turnover, engagement, and revenue per employee, this template contains everything needed to present a strong case for how culture changes can create better business outcomes and a strong return on investment.
2. Target the right leaders.
When trying to get financial leaders on board with changing an organization’s existing culture, how you approach them is important. But so is who you approach.
“Leadership teams are comprised of individuals — each of whom is likely to hold a different view around culture change,” said Cooke. “HR should begin by understanding which leaders are furthest along on the change curve, and harness the power and partnership of those more open in bringing their peers along on the journey.”
Look at your current leadership team and assess how open you think each of them would be to discussions around culture change. For example, if the CEO has been with the company for 40 years and is known for being traditional, they’re probably not the person to approach first.
But if your COO has been an enthusiastic supporter of past HR initiatives, is an early adopter of new technology, or comes from a progressive, non-finance background, they might be a better choice. Targeting the right leader helps HR create an ally for conversations with harder-to-sway executives.
3. Take baby steps.
HR leaders and team members likely have big goals around changing the workplace culture. But if you’re dealing with a hesitant leadership team, you might not want to overwhelm them with all those ideas at once. Instead, start small.
“Culture change can feel overwhelming in its enormity,” Cooke said. “So define an [aspirational] vision, but set small, achievable goals early. Give people the chance to experience victory without too much effort. Then highlight it, celebrate it, and set the next milestone.”
For example, if one of your company goals is to create a strong culture with feedback at its heart, you might start with the aim of improving the quality of your employee engagement surveys. This could involve designing more effective survey questions and allowing employees to leave written comments.
Measure the results over time and share these with leadership. Have the number of respondents increased? Are engagement levels increasing? Use these results as a stepping stone to roll out additional changes, like adding pulse, onboarding, and offboarding surveys.
By breaking down large-scale culture changes into smaller, more manageable steps, you can show leaders in real time how these steps drive tangible, measurable results. “Winning begets winning,” said Cooke. “Give leaders a chance to taste it.” Once leaders get a taste of those positive results, they’re much more likely to support larger, ongoing changes.
4. Give leaders a sense of ownership.
HR professionals might be responsible for implementing organizational culture changes — but leadership still needs to feel a sense of ownership and involvement.
“Don’t think about HR as the leader of the culture shift,” advised Mellina. “Instead, HR’s role must be one of stewardship.”
As he defined it, “Stewardship means bringing leaders on board and letting them lead, with top business executives overseeing specific aspects of the culture shift, providing effective guidance and support, and ensuring the overall effort is moving in the right direction.” Mellina continued, “In essence, this is a ‘cocreation’ approach. By acting as the steward, HR sets the stage for cocreation with the leadership.”
Perhaps one of the culture changes you’re proposing is the move toward hybrid work, where employees have the option to work from home. In this situation, your CTO might oversee the initiative, cocreating the policies, procedures, and best practices to ensure the shift aligns with their IT strategy.
By partnering with leadership to cocreate a new culture — instead of just getting their approval — you give them a sense of ownership that ultimately keeps them committed to these changes, long-term. “The culture shift will become the leadership’s baby, so to speak, [instead of] HR’s baby,” said Mellina.
5. Got pushback? Get curious.
Sometimes, no matter how you frame changes to your current culture, leaders may be reluctant to get on board right away. If you find yourself facing pushback, the best thing you can do is “be curious and willing to pivot,” advised Cooke. “Where you’re experiencing resistance, ask why.”
Get curious about why your leadership team may be resistant to corporate culture change. Maybe a top executive had a negative experience with culture change at a previous organization? Perhaps they’re concerned about the cost? Or are they having a hard time connecting cultural changes to tangible business outcomes?
Once you have a better idea of why you’re getting pushback, it’s easier to rethink your strategy. Changing your approach to address leaders’ concerns directly will increase the likelihood of getting them on board.
“Overcoming resistance is not about trying harder,” explained Cooke. It’s about “stepping back, understanding what’s behind the resistance, and being willing to [adjust] your approach to meet leaders where they are.”
Changing Company Culture to Create the Next Generation of Regional and Community Banks
HR professionals recognize the positive impact that the right culture changes can have on a company’s success. But for these changes to have a transformative effect on hiring, engagement, and retention, they need the full support of leadership.
By tailoring your case in a way that speaks to your leadership team, you can present a strong argument for creating a workplace that not only embraces the next generation of bankers but also shows them their hard work is valued and supported.
Ready to discover a range of bulletproof strategies that can form part of the cultural shift at your organization? For everything you need to know, download Lattice’s Driving Engagement and Retention in the Financial Services Industry ebook.
