Its 2010 and your workforce is now stripped bare...

Over the last 18 months Financial Services institutions have seen a dramatic change in the size of the workforce. Of course what the crisis has really bought into stark focus is the relatively high cost of the North American and European FS workforces when compared with their Asian and South American colleagues. When it comes to the workforce global thinking is back in. Being "location agnostic" is the new black and it looks like the time is right.

Caution remains with either complete recruitment freezes or targeted recruitment to develop new growth strategies. Change has occurred at all levels of the organization and now, as the dust settles, leaders are asking some fundamental questions of their workforce which we outline below.

1. How do I develop my talent?

Its ugly out there at the moment. Holding onto to your job has been the main issue for FS workers in 2009 but now leading organisations are turning on themselves to try and dig out the gems in their organisations to lead them forward. The trouble is no one seems to be clear about who/what is talent and how do you identify it? Two UK banks we spoke to had very differing ideas on who or what talent management is - one recognised everyone as talent; the other only saw the top 200. Both had very different approaches to Talent strategy and proposition, though the results were still the same i.e., the talent programme faltered, employees were disengaged. Each had failed to focus on outcomes marrying what the business and what the employees needed. At the heart of both these programmes were stable processes and measures - but these were simply poorly supported, mis-understood and out of kilter to what the business needed.

For 2010 FS companies need to get closer to the talent problem. As the market gradually improves, talent will start to move away from firms which have been long on promise and short on delivery. For more information on how you might address this in 2010, email will.davies@capgemini.com

2. Can I squeeze any more cost out of operations?

Of course you can! The hot topic here is whether financial services firms are being innovative enough in their approach to front and back office operations. Shared Services and other sourcing strategies have been effective in gaining economies of scale and efficiencies but this has left the question of the retained function and how further savings can be achieved.

Leading firms are tackling this question with introducing practices which create both an efficient workforce and a happier one. SMART working is a typical example which Capgemini has developed in partnership with the CIPD. Lets face it we could all work smarter and organisations have the potential to increase productivity, reduce business, IT and employee costs through a simple, stratighforward approach which addresses key aspects of management strategy , performance management, physical environments and technology leverage. A paradigm shift can occur - to read more on SMART working, then download our point of view here.

3. Do we need an army of people?

Ok, so you have your HR SAP or PeopleSoft solution with its whiz bang sledgehammer self service solutions cranking out all sorts of MI (some of it useful!) but really is it working? Is it cost effective?

We know FS organisations (like others) have never really got to grips with the Ulrich model and many have never really achieved the utopia of a fully strategic business partner model (if you have HR Business Partners, ask them how much time they are stuck in the weeds!). So what can be done? In 2010 FS organisations will need to begin asking some tough questions of its back office - such as Why do you exist at all? Many leading organisations have decided enough is enough and are exploring new options whereby either they look to outsource it all or bring in niche technology providers to provide a better, cheaper, scalable service (which doesn't cost millions per year in upgrades and maintenance) - have a look, they are out there and you'll be surprised which blue-chip companies are using them.

We have some very hot views on this and also how to make back office departments develop into mature, strategic functions. For example, don't think for one instant that HR outsourcing is immature - there are some business and technology excellent solutions out there with some innovative commercial deals to be had (e.g. cloud and Software as a Service). What these leave behind is a workforce which needs to grab innovation and get smarter on what and how to source. For an HR Business partner this means becoming smart on two counts - service ownership and procurement.

Finally, its going to happen. Banks are going to have to work together across the value chain. Utility banking is coming and the start maybe in bringing together back office functions to serve the industry wide. Basic support requirements are already fairly homogeneous so it is not inconceivable to think there might be an opportunity for someone to take the lead and build this capability. If you want to read more on this subject, then download our New Model No Army Point of View here.

Talent Management

As the war for top talent hots up, effective talent management is a key weapon in an organisation's armoury. Talent management is much more than effective recruitment or having a fast track stream, it's about managing and retaining top talent over a full career lifecycle.

Capgemini's latest research in conjunction with CIPD, provides the employee's view of what good talent management practices should look like:

• Talent management needs to be linked to business strategy
• Without the CEO's sponsorship it will not work
• A coaching approach to talent management will facilitate the most effective performance, fulfilment, engagement and development
• Talented people know their market value and they are more mobile than ever before. If they are not satisfied they vote with their feet
• The most powerful contribution HR can make is to provide leaders and managers with the coaching, inspirational, motivational and leadership skills needed to convert talent potential into leadership performance

To read more about what it takes for successful talent management programmes, download our latest research with the CIPD - The Talent Perspective