Almost a third (31%) of respondents said retaining younger talent had become harder than five years ago
Around one in four Gen Z employees have left financial services firms in the past year, with almost half of financial services leaders reporting an increase in these employees leaving their organisations, according to KPMG’s latest UK Financial Services Sentiment Survey.
The poll of more than 150 senior figures across the sector found that 49% had seen higher turnover among workers under 30 in the past 12 months. The problem was most pronounced in banking, where 54% of leaders said departures among younger staff had risen.
Almost a third (31%) of financial service leaders said retaining younger talent had become harder than five years ago, signalling concerns about the industry’s future skills pipeline.
Leaders identified several factors behind the trend, including a preference among younger workers for start-up environments (42%), better opportunities in other industries (36%), and a desire for self-employment (35%). Other reasons cited included the cost of living or relocation pressures (34%), the wish for greater flexibility (34%), and mental health and wellbeing considerations (24%).
Almost all respondents (96%) said their firms were taking steps to improve retention. Common measures included flexible working policies such as term-time contracts or staggered hours (52%), improved feedback and engagement initiatives (49%), enhanced wellbeing support (47%), and mentorship programmes (47%).
Firms were also expanding early career training (46%) and introducing purpose-driven or environmental, social and governance (ESG) projects (38%). A third said they were revising office attendance policies.
Karim Haji, global and UK head of financial services at KPMG, said: “The fact that almost half of FS leaders are seeing more young talent walk away from the sector presents a real competitive challenge for financial services. The sector needs young talent to bring diversity of skills, experience and thinking. Gen Z employees are clearly signalling a desire for more autonomy, variety and entrepreneurial experiences.”
He added: “While financial services firms are investing in retention strategies, our data shows a disconnect between what Gen Z wants – an entrepreneurial environment – and where firms’ efforts are focused – flexible working and wellbeing.
“Office presenteeism gets a lot of airtime, but most FS firms have already made strides in offering flexibility that goes far beyond remote working. Alongside that, they must keep pace with the changing values and expectations of young talent.”
Writes Accountancy Today