Google “people are our greatest asset” and you’ll generate 86.9 million results in 0.48 seconds.
While this unoriginal cliché may come across as trite and overused, it’s no longer lip service.
In simple terms, we have more jobs than there are people to fill them. People are no longer a commodity. They are, indeed, valuable assets. And it’s not because people don’t want to work. We just went through the Great Resignation. Baby Boomers are retiring. Fewer prospects are joining the labor force because of the decline in populations entering the job market.
Labor shortage to impact revenue globally
As mentioned in part 1 of this risk-mitigation blog series, a recent Korn Ferry study predicts that by 2023, we’ll experience a global labor shortage of more than 85 million people. That’s more than the entire population of Germany.
Additionally, The World Economic Forum, says there’s a shortfall of nearly 3 million cyber professionals worldwide. The U.S. Bureau of Labor Statistics, meanwhile, predicts a 13% increase in demand for general computer and IT professionals by 2030.
Other startling statistics and facts that underpin why the labor shortage is one of the top risks facing secured finance lenders include:
- Labor shortages mean less productivity, which could impact up to $8.5 trillion in unanswered annual revenues. (Source: Korn Ferry)
- A 13% increase in demand for general computer and IT professionals by 2030. [U.S. Bureau of Labor Statistics]
- A shortfall of nearly 3 million cyber professionals worldwide – see part 5 in this risk mitigation series on how that impacts another top concern. (Source: The World Economic Forum)
- The labor pool drop means less work will get done, fewer sales, and lower profits – leading to stagnant growth, which is detrimental not only to individual businesses but the overall global economy. (Source: Business Insider)
- A lack of human resources will create intense competition not only to attract employees but to retain talent.
To combat that labor shortage and demand, you either need more people, or you need to work more productively.
Since the first is unlikely, SaaS is one of the best solutions to mitigate the labor scarcity risk through automation and self-service.
So what can we do to mitigate these looming risks associated with labor shortages?
And the right technology. Solifi’s Open Finance Platform is the best solution to mitigate the labor scarcity risk by enabling automation and self-service processes to become more efficient with fewer employees available.
Will technology displace people’s jobs?
While there are claims and even studies from reputable research groups, such as Pew Research Center, stating that robots and other technology will displace human jobs, there is no cause for immediate alarm.
- We don’t have enough people to fill all the jobs.
- This automated world of technology will actually create different jobs.
- Technology eliminates the need for excess human resources in areas where you don’t need them.
- Been on a video call recently where technology wasn’t working and a human had to fix it?
To tackle the labor shortage and demand, businesses need to find ways to work more productively. This doesn’t mean that you ask your employees to work longer hours until the job gets done. That is not sustainable. And in the labor-shortage market, you want to create a culture where employees feel valued and are making a difference – and have a work-life balance. Otherwise, they will go where the grass is greener.
So this is where technology comes in. Or at least the idea of it.
Invest in an enterprise-wide digital transformation strategy to combat the labor shortage
It’s recommended that you don’t jump right into deploying technology on day one without a plan. You need to do an enterprisewide assessment and create a digital strategy to ensure a successful transformation throughout all areas of your lending institution.
Failure to take this first step will most likely create another risk of spending money in the wrong areas. With capital spending a high priority among finance lenders, along with the precarious economy, it’s important that you make mindful decisions on your investments.
Here are some key takeaways that support that thinking from the recent US Bank CFO Insights report – and which could be detrimental in navigating the pending human resource crisis.
- While acknowledging its importance, 40% of respondents say they lack an enterprise-wide digital transformation strategy.
- 39% say resistance to change is a barrier to digital transformation
- 37% are unaware of new technology and its benefits
- 31% lack the skills or talent required to deploy and use new technology
- Lack of budget affects 31% of respondents
- 25% fear technology is too disruptive and will interrupt business continuity
Partner with the right fintech provider with the right technology to mitigate risk
Let’s unpack some of those fears and areas of resistance.
The good news is that you don’t need to go down the technology path alone. It’s an easier road if you choose the right fintech partner (like Solifi) and the right technology, such as our Open Finance Platform.
Our customer advocates will work alongside you to better understand your challenges and where you want to grow. That’s because technology is not a one-size-fits-all solution. We want to make sure that you deploy technology – especially automation – in areas that will help you and your limited resources work more productively in light of labor shortages. And we provide easy-to-understand onboarding to ensure your employees are trained and comfortable with any new technology.
And we truly do understand because many of our employees have been where you are. They come from banks, wholesale dealers, factoring firms, etc., as users of financial technology. So they know what keeps you up at night. And with that empathy comes understanding and the best recommendations and steps to create and implement a successful digital transformation strategy enterprisewide.
The advantage of Solifi’s SaaS technology is that it’s cost-effective because it’s consumption-based. That means you only pay for what you use – alleviating budget concerns. And when it comes to business continuity, Solifi’s SaaS Open Finance Platform eliminates business disruption.
It’s a fast implementation to deploy our SaaS via the Open Finance Platform. And then afterward, evergreen IT updates are done behind the scenes – usually while you’re sleeping. Evergreen IT means that your technology is always current with frequent and smaller upgrades. Low-impact and regular upgrades after hours are especially valuable when you have limited resources due to the labor shortage.
SaaS will also help you accommodate flexible working arrangements – which is a high priority and a huge benefit to attracting and retaining top talent. With SaaS; you can work anywhere as long as you have an internet connection.
Does too much technology pose a risk of losing the personal touch with customers?
And that view was supported by a Tier 1 bank executive who recently participated in our panel discussion about mitigating risk and ensuring compliance through automation. The technology eliminates the need for excess capital in repetitive places. And allows you to invest in that people element to focus on the customer. That’s where you need to spend your money.
One of our recent webinar panelists said partnering with a fintech provider, like Solifi, mitigates risk because you can trust we will find and fix any cracks in the system faster than any lender can. We’ve seen this movie before. Our professionals know what to look for, and they can do it quickly. With a trusted fintech software provider that offers SaaS-based solutions, you’re in a perpetual upgrade cycle that you never have to think about.
Technology is not replacing people. SaaS technology helps you become more productive in areas where you need that human element. Automation replaces manual, repetitive tasks so your employees can spend more time on more meaningful touchpoints to enhance the finance customers’ experience.
In fact, AI enhances the effectiveness of people. You can create filters and flags in your technology that tells your team members that something needs attention. Automation takes care of the easier, mundane tasks while your talent addresses those that need personal attention to mitigate risk and drive business growth.