By Melissa J. Anderson

Relatively poor employment and advancement prospects in the financial services may be driving down employee engagement in the industry.

A new study by eFinancialCareers shows that almost seven in ten (68%) of finance professionals don’t “love” their job. Not only that, but about half  (53%) of the survey’s respondents believe their lives might be better if they were not in the industry.

What does this mean for an industry that relies on innovative and engaged workers to gain the competitive edge? James Bennett, Global Managing Director of eFinancialCareers says firms need to work – now – to get the magic back.

“The results set alarm bells ringing over employee engagement,” he said. “The issue is not about finding out where the love has gone or when the spark died, but about restoring employees’ engagement.”

According to eFinancialCareers, companies with the lowest employee engagement are more likely to experience the biggest attrition shocks when the markets return. That’s why, they say, companies need to work on engagement and retention even during uncertain markets.

Hiring Numbers Also Low

But engagement isn’t the only metric that looks grim. Even in the past two years, writes eFinancialCareers’ Sarah Butcher, financial services companies have been hiring for than they laid off. This year has not been quite so good, with big firms like Goldman, UBS, and Credit Suisse cutting staff. Not only that, she writes, but recruitment firms’ business is also down:

“However, it took Michael Page’s second quarter results, out this week, to underscore just how bad things have become. In the first half of 2012, Michael Page, which places people in financial, accounting and legal jobs in 35 countries, said revenue in its UK operation, which accounts for 22 percent of the group’s operating profit, fell more than 10 percent. Within the UK operation, the recruiter’s banking business plunged 50 percent.”

Interestingly, Butcher continues, according to Michael Page chief executive Steve Ingram, bankers aren’t looking for new jobs either. In fact, in a recent Financial Times piece, he is quoted saying that financial uncertainty has left both hiring managers and employees fearing change. The end result is an unhappy, uncertain status quo. Hey explains, “The eurozone uncertainty has impacted the confidence of clients who wish to hire and the confidence of those who want to switch jobs. Clearly that’s impacting customer sentiment.”

Breaking the Cycle

What’s the impact of low engagement, low hiring, and low attrition in the long term? According to Gallup, employee engagement is a key indicator of business performance.  If low engagement is a result of uncertainty or underperformance in the financial markets, a vicious cycle could emerge in which low engagement depresses corporate performance, and likewise, corporate performance depresses employee engagement.

Gallup believes managers have an important role to play in building employee engagement. How could engagement-focused management break the cycle? In a recent report, Gallup Senior Consultant David Helvadjian suggests that holding management accountable and coaching them on emotional engagement may be they key. He writes:

“This requires more than a manager’s boss. It takes a dedicated team with real coaching talent that can partner with managers to build action plans and hold them accountable, track their progress, and ensure they continuously focus on emotional engagement.”

Additionally, he continues, a company must be prepared to monitor and coach engagement behaviors for the long term, identifying “engagement champions” who can lead the way.

“These champions are specifically trained on emotional engagement – how to measure it; how to fully understand and interpret survey results; and how to build, execute, and follow up on action plans for building employee and customer engagement. This team of champions becomes an organization’s internal engagement support, maintaining the expertise needed to keep the company focused on what’s important.”

He adds, “They also ensure that emotional engagement becomes a widespread cultural trait in the organization.”

By ensuring that employee engagement becomes an integral part of corporate culture, banks can attempt to break through the current cycle of low engagement, low hiring, low attrition, and low performance. In doing so, they will be better positioned to retain key employees when companies begin hiring again.