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Report: U.S. banks, facing staffing needs, should focus on Gen Y

CHARLOTTE, N.C. -- The U.S. banking and securities industry is struggling to develop the young staff needed to replace the legion of workers set to retire in the next decade, according to new research from corporate consultant Deloitte & Touche USA.

"We believe there is a talent crisis arriving at banks, and it's not going to fix itself," said Rekha Sampath, an analyst with Deloitte Research in Boston and author of the 12-page report. "There's going to be a shortage of banking individuals unless the importance of Gen Y is acknowledged."

The report, sent to clients at the beginning of the month, concluded that corporate "brain drain" is arguably the "single most concerning impediment to long-term sustainable growth" in the industry. But so far, the nation's banks are having trouble developing staff from Gen Y -- or those born between 1982 and 1993.

"We don't know anybody who has a really first-class training program," said Frank McLaughlin, chairman of McSearch Personnel Consultants in Dallas. "Where is management going to come from?"

According to a Deloitte Consulting analysis, banks will need to fill almost 1 million teller positions between 2004 and 2014, as well as thousands of additional positions for customer service representatives, loan officers and loan counselors.

It's estimated that Gen Y makes up only about 10 percent of the U.S. labor pool; about 1.4 million more workers from that generation joined the work force last year. While several major securities firms and banks continue to expand their undergraduate hiring -- mainly by recruiting on college campuses -- the Deloitte report concluded they need to look beyond just adding an extra body to the payroll.

Charlotte-based Wachovia Corp. (NYSE: WB) has a six-month program in place that helps newly hired college grads explore different careers in financial services. But the company wants to do more, said Wachovia spokesman Jay Everette.

"We are looking at how to tap into the experience and knowledge of some of our older employees before they retire," Everette said. "Gen Y is the future. We need them as customers and as employees."

The report gives specific examples of ways companies can meet the needs of Gen Y workers, including how to manage work-life flexibility, create a tech-savvy work environment and develop long-term career goals.

It also outlines some challenges. For example, branch retail banking isn't often an attractive career option for a young worker.

"You don't have Gen Y saying, 'Wow, I'll get in there and have a routine job, and maybe if I do really well, I'll aspire to be a teller,'" said Garth Andrus, principal at Deloitte's human capital practice in Atlanta. "I'm amazed that there aren't career paths developed. You've got to start somewhere and have a place to go, within the same institution, not some other employer."

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