Recently Kelly released its report on the prevalence of the gig economy across the Australian employment landscape and whilst the trend is present in many areas of our economy it has not become widespread across the Banking & Financial Services sector.
There are many differing factors that have resulted in a reluctance to incorporate the ‘free agent’ trend into the highly competitive B&FS world and they are generally based around a talent shortage and banks wanting to retain top talent - the best talent will always seek a permanent role.
Yes there are areas of Banking where we have witnessed a growth of the gig economy, but this has generally been in project areas focused on aspects such as transformation incorporating technology, process improvement or outsourcing.
All major banks have, at some point over the last 3-5 years, initiated large-scale change management and technology projects, and the best people in these spaces have seen an opportunity to take on short/medium term contracts at inflated remuneration rates, mitigating the risk vs reward of taking on contract work.
Another reason why we have seen some increase in contract-based roles in the major banks is because they allow hiring managers to circumvent the widespread hiring freezes that have affected the market in recent years. In my experience these roles have been brought on short term until the freeze subsides and the employee is then made permanent at the first opportunity.
Across technical finance functions within the B&FS world there has always been a common contracting culture and this is mostly down to a “try before you buy” attitude to make sure the candidate can cope with the stresses of their new surroundings and is technically proficient in their role. This is a common theme across the wider Finance/Accountancy markets. Contract roles are also typical for maternity leave cover as well as during peak times, such as end of financial year.
The gig economy approach isn’t generally common across front office Banking and the fee/income earning and relationship management roles where, in my opinion there is the biggest shortage of top level talent. These are the areas that primarily need continuity and there is a fulltime fight to retain the best talent within the organisation.
These roles also have access to privileged information and intellectual property that needs to be protected. For this reason there are several clauses built in to any fulltime contracts to protect banks from having this information leaked to competitors. These areas often have highly niche skill sets and, from a pure revenue point of view, are vital to banks.
Whilst the fee/income earning and relationship management area of B&FS is weighted heavily to a fulltime employee base, the banks have sought to combat the gig economy by bringing in more flexibility to the workplace – flexible working hours and the ability to work remotely are prime examples of this with the major domestic banks. I wrote about negotiating for flexibility in Banking & Finance in my previous blog – read it here.
The one area where I don’t see the gig economy taking off anytime soon is across the $200k+ salary level in front office banking, these employees are generally seen as pivotal to the organization and are usually in people management positions. The investment in these employees means the banks won’t risk losing them at the end of a contract and also shows a long term commitment to these areas.
Do you agree?
If you want to take a closer look at the gig economy in the Banking & Financial Services and Accounting & Finance sectors in Australia and New Zealand, download Kelly’s Workforce Insights report.
Author: Liam Parker is a Principal Consultant at Kelly Executive.