Career paths across the financial services sector have historically been mostly linear. New hires might start at the lowest rung, like teller, clerk, or assistant, and then work their way up into management and executive ranks. But the industry and its workforce are rapidly changing, and those siloed career paths aren’t addressing the needs of either.
To stay relevant, credit unions need to reevaluate the efficacy of their career paths to attract and retain employees. This means viewing career paths less like a train track to a single destination, and more as a flexible, multi-pronged pathway that allows for many possibilities, shifting with the ever-changing needs of the industry and its employees.
Jump to 3 Steps to Develop Career Paths
Why Career Paths Matter More Than Ever
The digital banking revolution and rise of AI have accelerated monumental changes in the financial services industry, from virtual tellers to higher customer expectations, forcing credit unions to compete with fintechs, and humans to compete with machines. Here's what these shifts mean for employers.
Firms need to adapt to give people a broader set of experiences and continue to develop them.
1. Technology Disruption
A 2024 report from Accenture found that 73% of time spent by bank employees has a high potential to be impacted by generative AI.
As technology automates more responsibilities, requirements for talent are shifting from “basic cognitive skills'' to “socio-emotional and technological skills," a report from McKinsey & Company said.
“When you start your career [now] in just about any kind of financial services firm, you really need to hit the ground running,” said Steve McIntosh, CEO and founder of career coaching firm CareerPoint. But that acceleration to being responsible for more strategic tasks early on in a career reduces the number of steps it takes to reach an executive leadership position. Promotions may come quickly in the early stages of a career, but less frequently as employees move into middle management.
“You’re going to be stuck at the same level for a period of 5-10 years,” McIntosh said. “People want more change and variety than that. Firms need to adapt to give people a broader set of experiences and continue to develop them.”
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2. Competition for Workers
Fintechs and startups are hungry for candidates with finance skills, and provide an alternative to the buttoned-up corporate culture of traditional financial services firms. After the pandemic accelerated opportunities for remote work, consulting is now an appealing choice for some top talent in the sector, said Kim-Adele Randall, CEO of consultancy Authentic Achievements and a business consultant who has spent most of her career in financial services.
“You could end up losing your talent today to pay them tomorrow [as a consultant] to tell you what they could have told you in your organization,” Randall cautioned.
Additionally, financial services firms are struggling to fill open positions amidst growth. Over 911,000 openings are estimated annually by the US Bureau of Labor Statistics (BLS).
“If you’re talented and you’re not getting [satisfaction] from your [work at your current] employer, you’re going to start to look for it somewhere else,” said Randall.
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3. Changing Employee Expectations
High-paying jobs may have lured people to the financial services sector for decades, but a growing number of employees, especially younger workers, say money is no longer their only concern. A 2022 survey by Pew Research Center found that 63% of workers said no opportunities for advancement played a role, big or small, in why they left their job the year before.
So what do employees need now? A 2023 survey by Lattice and YouGov found that employees want more trust, clarity, and recognition in order to reach the next level of their career:
“If you, as a company, don’t want your employees to be talking to a recruitment consultant to get those opportunities, then you need to be talking to them about their career development opportunities,” McIntosh said. “It’s that simple.”
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How Career Paths Drive Better Business Outcomes
All the upheaval of the current climate should prompt credit unions to rethink the career paths they lay out for their employees. Without meaningful career tracks, banks and credit unions are at risk of losing employees to companies that are already investing in retention strategies.
They’re also at risk of losing happy customers. “When we develop people, we make them happy and engaged, so when they're interacting with our members, they're going to be happy and the members are going to see that,” said Jennifer Robertson, VP of human resources and talent management for Vantage West Credit Union, whose team uses Lattice Grow to implement career paths.
“This is the differentiator for companies,” said Sandra Holzgen, Chief Human Resources Officer (CHRO) for PSECU, the largest credit union in Pennsylvania. “I wholeheartedly believe that if you have the right talent in the right jobs, you get exceptional results. It’s worth it for leaders [and] employees to invest in your career pathing and all of your talent management process.”
3 Steps to Develop Career Paths
To turn traditional, straight-line career paths into ones with more flexibility, breadth, and depth requires HR to take the lead, shifting from “enforcing workforce policies” to “re-architecting work across the enterprise,” according to Deloitte’s 2021 report on human capital trends in financial services.
“HR needs to move into a strategic role [of being] responsible for the people,” said executive coach Berta Aldrich, former CHRO of financial advisory firm Private Advisor Group and author of Winning the Talent Shift: 3 Steps to Unleashing the New High-Performance Workplace. “[Human Resources is] involved in selecting the right people [and should] become completely involved in training, promotions, and coaching and development.”
Here’s how to rethink career paths in the credit union sector.
1. Make it flexible.
Job architecture provides a framework for how positions are categorized within an organization; it guides decisions about compensation, promotions, career pathways, and job leveling. Job architecture was once rigid — laying out a straight-line roadmap from junior-level employee to senior executive, with little room for horizontal movement within an organization.
But modern job architecture allows for a more flexible approach. An organization might have fewer rungs up the ladder to senior leadership, but HR can build in more opportunities for top talent to move upward, even if they don’t want to lead people, and encourage lateral moves between departments or teams to keep employees engaged and challenged. This could include things like assigning team-based projects, or helping subject-matter experts who don’t want to manage people become leaders in their field through training and development.
“You’re starting to see that the younger generations, probably one or two generations into the workforce, are expecting to move around laterally,” Aldrich said. “For them, it’s not all about the next promotion. It’s doing work that matters, that’s purpose-driven and where they can make a positive impact.”
2. Reconsider required skills.
In the highly regulated financial services industry, job postings might outline specific certifications or years of working in a particular area, such as mortgages or asset management, as requirements for a position. But these requirements can stymie an existing employee’s career path if that person doesn’t have the exact criteria needed to check every box.
As employers redesign career paths, soft skills may be the attributes that qualify employees for a lateral move or a promotion, rather than strictly technical abilities, said Holzgen. At PSECU, job descriptions include soft skills such as service mindset, initiative, ability to learn, positivity, and emotional intelligence.
This can require a change in mindset, Holzgen acknowledged. She recommended considering the five key job competencies that will make somebody successful in a particular role, and how to teach them to do the rest. If an employee has a passion for learning, it should be fairly easy to teach them the technical skills they need to excel in a new internal role, she noted.
“Companies have to reimagine what they think about talent and not have specific degrees or skill sets [need] to align perfectly with that job posting,” Holzgen said. “Career pathing has to be more about attitude and approach versus competency and skill [from the start].”
3. Support employees’ growth.
Offer opportunities to employees for ongoing learning, career development conversations, competency frameworks, and individual development plans that help employees map out their trajectory from one role to the next.
“Competency frameworks help early- and mid-career employees figure out where they are and where they’re going, and what they need to do to get there on their own,” McIntosh said. “That’s very important to allow them to have a sense of agency in their own career path.”
Providing infrastructure allows employees to assess their own development needs, and keeps managers accountable to having ongoing career conversations throughout the year.
“There's nothing worse than having a review where the manager is trying to remember what that person did in December instead of knowing throughout the year,” Robertson said. She said that implementing Lattice has empowered HR and managers at Vantage West Credit Union to take development seriously, including:
- expecting managers to have regular career conversations
- giving employees the tools to excel in their role
- providing psychological safety employees need to grow
- aligning everyone on the company’s growth strategy and objectives
Conversations about career paths, professional development needs, and interests should come up monthly between managers and their direct reports, perhaps during one-on-ones, advised Randall. Regular, routine conversations like these could reveal an individual’s skills or hobbies that the organization could capitalize on and the employee would enjoy working on.
Removing Barriers for Employee Growth
Financial services organizations can make sweeping changes to their job architecture, bolster their professional development programs, and provide coaching to individual employees. But, Aldrich said, none of this will be enough to tackle the sector’s workforce woes if they don’t address a longtime problem in the industry: Women and people of color have historically had difficulty moving up the ranks within financial services organizations.
Women represented just 18% of C-suite positions in financial services firms, according to Deloitte’s 2023 data. And without significant effort, Deloitte predicts that number won’t even reach 25% by 2031. While people of color represent about 40% of entry-level workers in financial services firms, this falls to only 10% at the C-suite level, found McKinsey.
Removing the barriers — from retaliation for reporting bullying or abuse to unconscious bias — that are keeping underrepresented people from the industry is critical to ensuring everybody has opportunities for career paths within it, noted Aldrich. “There has to be a foundational shift,” she said.
Investing in diversity, equity, inclusion, and belonging (DEIB) requires organizations to prioritize it during the hiring process, stay accountable to DEIB goals, and train management to uphold DEIB values each day. So if job descriptions and career paths aren’t written equitably,
A culture of DEIB isn’t a nice-to-have, it’s crucial for developing strong teams, meaningful employee experiences, talent attraction and retention, and sustained business outcomes.
Design Career Paths Seamlessly With Lattice
Redesigning career paths — and developing new ones — in the financial services industry will require big-picture changes for organizations, and a reframing of what jobs require and who will do the best work. Companies with HR teams that can lead the charge will come out on top, said Aldrich.
“More and more, [HR is] going to be looked to as the one central place that is going to manage the company’s greatest asset, which is their people,” Aldrich said. HR’s “job is changing. And the companies that can make that shift and look at HR as a central department to manage the greatest asset, are going to win.”
Ready to set your employees up for breakthrough growth? Download Lattice’s Individual Development Plan Template, or request a demo to see how Lattice can be customized for your financial services organization.
Takeaway: Reshaping career paths can ensure mid-career talent have the opportunity to build their skills and grow in their careers — without needing to leave for a new employer or industry to do so.
Takeaway: Redesigned career paths can be more responsive to the needs, skills, and aspirations of individual workers, giving them a reason to stay.
Takeaway: Updated career paths that address career development and ensure workers feel valued for their unique skills and contributions can keep them motivated, engaged, and on your payroll.
