Hiring managers are facing significant challenges; all sectors are struggling with recruitment, but let’s take the investment management industry as a case study.
Rapidly changing technologies are leading to an explosion of new products and services requiring a variety of new skills, some of which are in short supply, particularly in investment management.
In response, HR teams are focusing on two key strategies: a) developing their staff from within, i.e. allowing their employees the opportunity to build their own future through targeted skill development opportunities and b) rethinking the necessary competencies for success and considering new candidates with more diverse skillsets.
Both strategies require a leap of faith for employers and rely on a robust talent development strategy for success.
The talent factors
There are three primary components that hiring managers sourcing talent must value: grit, skills, and experience.
This framework is particularly relevant for the investment management sector, and it can be used to predict success for both traditional and non-traditional candidates.
Grit demonstrates commitment
One of the most challenging aspects of talent acquisition is figuring out how to measure impact, drive, and dedication. Many HR professionals today use grit as a lens to determine how candidates will grow and develop within their organization.
Grit has become a popular term in the business world of late largely due to the success of Angela Duckworth’s book of the same name.
Duckworth defines grit as “a combination of passion and perseverance for a singularly important goal”, and what grit really demonstrates is the ability to commit.
Commitment is the deciding factor in whether a project is completed, and it can indicate whether someone will choose to grow and learn within an organization or be quick to chase the next external opportunity.
If hiring managers can identify candidates who exhibit that commitment through their professional experience and education, it can meaningfully impact the success of the organization and the bottom line.
Although the primary means to demonstrate grit as a professional is through the achievement of a credential, certification, degree, or a demonstration of success in a major project, grit can also manifest itself through overcoming difficult personal circumstances.
The pursuit of continuous learning—on-the-job and beyond—is beneficial for both candidates and hiring organizations. People who are committed to developing themselves and work for companies that support their development, are more likely to be committed to their company.
Skills demonstrate credibility
Technical skills form the baseline for industry participation— taking the investment management sector as an example, employees must have the foundational competencies needed to be a practitioner in the field, such as portfolio management and financial analysis.
Soft skills are necessary in every profession; they include strong communication skills, the ability to influence and persuade, and emotional intelligence.
Leadership skills—ensuring good governance, instilling an ethical culture, and the ability to articulate mission and vision—are especially important as the industry increases in complexity and manages through times of market volatility.
Those with T-shaped skills have a combination of deep subject matter expertise in a single domain and a broad knowledge of other disciplines, plus the ability to connect them.
These skill categories are not of equal importance across one’s career. Technical skills are most important on a relative basis for early career professionals who must establish their credibility.
In contrast, soft skills and leadership skills become increasingly important as one’s career develops. The ability to persuade colleagues, build solid relationships, and create an effective culture increases with experience.
Likewise, T-shaped skills increase in importance later in careers when professionals have a greater wealth of experience from which to draw.
Importance of skills in career progression
A recent paper titled The Future of Work in Investment Management: Skills and Learning, found that demand for skill development in investment management is high—91% of professionals said it is important for them to actively develop new skills to further their careers.
The biggest areas of focus for skill development within the industry are the technical skills of sustainability, artificial intelligence (AI) and machine learning (ML), plus soft skills.
Unfortunately, the largest current skills gaps are in similar areas: AI, ML, sustainability, decentralized finance and blockchain tech.
Experience demonstrates application of knowledge
As careers progress and professionals are exposed to many scenarios, situations, and outcomes, their ability to address challenges with the appropriate solution will inevitably grow.
Understanding how to apply deep, technical expertise across a variety of disciplines is the basis of T-shaped skills, and therefore these skills are often linked with experience.
Experience and T-shaped skills are about the application of accumulated knowledge, and this skillset is in high demand.
T-shaped skills were the most in-demand skillset in a 2019 CFA Institute survey. 49% of investment industry leaders said T-shaped skills were the most important kind—even more important than technical, leadership, or soft skills.
In addition to direct, on-the-job experience, there are other ways to develop one’s T-shaped skills.
First, maintaining a diverse professional network is helpful to gain exposure to a variety of viewpoints and mechanisms for professional success.
Second, expanding your sources of media (books, newspapers, blogs, etc.) increases the ability to apply non-traditional perspectives within your area of expertise.
Finally, a focus on continuous learning is also important in developing a broad spectrum of skills—it improves the ability to track best practices, drives new insights, and expands upon the foundational knowledge necessary to develop your career.
Hiring for tomorrow
Finding the perfect candidate for every role will always be an aspirational goal.
In an era of increased flexibility, competitive compensation packages, and the disruption of emerging technologies, that goal is increasingly complicated.
The talent factors outlined here can help clarify the needs of a hiring manager and define where candidates will need support to develop into all-star employees. Necessity is causing companies to “build” rather than “buy” their talent.
Understanding how skills, grit, and experience intersect enables trade-off decisions such as: When can grit be a substitute for skills or experience? Is the broader ability to apply T-shaped understanding necessary in a role or can internal skill development serve as a substitute? When are technical skills critical as a bare minimum for competency within a role?
Hiring today for the organization of tomorrow is challenging, but stepping back to understand these talent factors in the decision-making process will increase the likelihood of long-term success.
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