By Lynne Baldwin
BHMI
As unemployment rates remain low, banks, payment processors and financial services companies face challenges with recruitment and retention. Many are increasing compensation and benefits to attract employees as they compete with each other and fintech companies.
Yet keeping employees takes more than pay. As antiquated legacy systems can hamper productivity and efficiency, financial services companies must also ensure they give employees the requisite tools and technology. Investing in back-office upgrades not only improves efficiency and reduces long-term costs; it also enhances the organization's profile for young talent seeking opportunities.
With unemployment near historical lows and job hopping rising, employers across sectors are working hard to find and retain high-quality talent. The financial services sector has often faced high turnover because of low engagement, lack of flexible work schedules/locations, and limited work-life balance. In 2022, banks experienced a spike in turnover for non-officer employees, reaching the highest level since 2019, according to the Crowe consultancy.
Financial services and payments organizations also face challenges in recruiting younger people vital to operations and innovation. EY noted that Gen Z workers could "make or break" the future of banking and will make up 27 percent of the workforce by 2025. These workers grew up with devices, applications and connectivity, expecting ease and convenience. They lack patience for clunky work processes or out of date technologies.
"The lack of new technology will always hurt attracting the best talent," said Marc Badalucco, managing partner of Impact Payments Recruiting. "Simply put, payment professionals always gravitate to companies that offer innovative services and processes that provide value to their clients."
Even as companies provide fancy office buildings, advanced user applications and competitive compensation, some remain hampered by outdated back-office systems. In addition to compensation and training, motivating employees requires the right technology to help them do their jobs and serve their customers more effectively. For example, a payment processor specialist fielding thousands of customer requests with old technology and manual processes is bound to become frustrated. This degrades employee morale and loyalty, increases the risk of error, and creates a poor user experience.
"Employees using legacy systems take longer to complete their work and have a higher chance of errors," said Kimberly Tibbetts, Principal Industry Consultant at Endava. "Legacy systems are typically slow to respond which can lead to employee frustration and impact performance since things take longer."
Aberdeen Strategy and Research found one in three companies said they spend too much time tracking and interpreting data rather than engaging employees. Additionally, nearly a quarter said the employee experience with analytics systems is not intuitive and that delayed decisions cause employees to become flight risks from unresolved problems.
Payments have undergone tremendous transformation as providers have rolled out new apps, cloud-based solutions and technologies. Despite their front-end innovation, some financial services companies have not upgraded their back-office applications.
That's a problem because the customer experience can only be as good as the employee experience. British business magnate Richard Branson built many successful businesses on the foundation that employees come first, even before customers. "If you take care of your employees, they will take care of your clients," he said.
"Upgraded back-office systems ultimately improve the employee experience by streamlining processes, reducing manual labor, and providing employees with real-time data," said Barry Tooker, principal at TransactionBanker.com. "This empowers employees to make better decisions and frees time to focus on more valuable work. Additionally, modern back-office systems can provide managers with access to analytics and reporting tools, which can help them make better decisions and improve the efficiency of their operations and productivity of their personnel."
Aberdeen noted that modern back-office organizations optimize employee performance and have a nearly 12x annual increase in employee productivity. Rules-based configurations can automate many workflows and optimize manually intensive processes like payment disputes and chargeback reviews. This enhances productivity, reduces operational costs, and improves employee and customer satisfaction. Also, a strong correlation exists between the customer experience and developed back-office systems.
Finally, upgraded back-office systems are easier to operate, manage and maintain, with more vendor support and third-party integrations. Organizations that hang onto legacy systems note it's increasingly difficult to find experts with the knowledge and experience to manage them. "The support needed for legacy platforms will continue to become scarce until the systems are either brought up to date or aged out completely," said Joyce Mehlman, owner of iLEX Consulting Group.
Modern back-office systems enable companies to improve the employee experience by helping them gain more insight and control, reduce manual tasks and better serve their customers. Updated systems also serve to automate complicated processes such as dispute management. This includes making it easy to research transactions and track activities in real time. The result is an efficient organization that enables employees to work smarter and focus on high-value activities. 
Lynne Baldwin is president and co-founder of BHMI, a leading provider of software solutions focused on back-office processing of electronic payments. The company is best known as the creator of the Concourse Financial Software Suite, an integrated collection of back-office products that allow companies to adapt to the rapidly changing world of payments. For more information, please visit www.bhmi.com.
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