One of the most unusual talent competitions you might ever hear about is the World Worm Charming Championship. Held annually in the UK, participants must try to lure as many worms to the surface as possible in 30 minutes using vibrations, music, or other techniques — digging is not allowed. Running since 1980, the current record was set in 2009, when 10-year-old Sophie Smith charmed 567 worms to the surface.Sophie’s record-setting performance might lead some to believe she had an innovative new technique, but her chosen method of worm charming was actually the most traditional — hitting a fork stuck in the soil to create vibrations that draw out the worms. In today’s tight talent market, community financial institutions (CFIs) may feel like they need to pull out all the stops to attract talented employees. However, some of the variables within a workplace that workers value most are ones you’ve seen before. Based on insights from 265 executives from US banks with less than $100B in assets, Bank Director’s 2025 Compensation & Talent Survey reveals what it takes to draw strong job candidates in the financial industry.While there is a strong narrative regarding a global talent shortage and the issues associated with attracting skilled people, this year’s Bank Director survey reveals a more nuanced picture. The majority (59%) of respondents say it hasn’t been more difficult to attract or retain talent in 2024 and 2025 compared to previous years. What’s more, banks’ staffing levels reflect cautious optimism: 38% have increased headcount moderately, 5% significantly, and 33% have kept it constant over the past year. However, smaller banks with less than $500MM in assets report facing more recruitment challenges than their larger counterparts. Investing in Compensation to Stay CompetitiveA striking 85% of respondents saw compensation expenses rise in 2024, with a median increase of 5%, outpacing inflation and salary rises in many other sectors. Although this increase could be linked to the general increase in labor costs in the face of ongoing economic uncertainty, financial institutions are also investing in competitive compensation packages to attract new talent and retain existing employees.Strategic workforce planning — including benchmarking and well-structured reward systems — can help CFIs better manage compensation-related expenses. Many institutions are also increasingly using data to link compensation with performance. Meanwhile, future hiring plans appear to have cooled, with leaders reporting that their banks are not expecting to increase employee headcount across most departments in the next year. That said, there are certain exceptions: over half of the respondents plan to grow their commercial lending teams, while about one-third expect to increase hiring for technology roles. Key Talent Acquisition Trends To attract top talent, boost employee engagement, and build a stronger, more resilient workforce, CFIs must keep evolving their recruitment strategies to reflect emerging talent trends and shifting employee expectations. Key trends and employee expectations to be aware of include:
- The rise of automation and analytics. CFIs are increasingly using artificial intelligence (AI) and predictive analytics to automate routine recruitment tasks, including resume screening, shortlisting, and scheduling. This can cut costs and free up human resources teams to focus on strategy and other tasks, which could include enhancing the candidate experience and accelerating time‑to‑hire. In addition, many institutions are turning to skills-based hiring, using analytics to improve workforce planning and source talent intelligently.
- A good work-life balance. Although some institutions, particularly larger banks, are pushing to return to full-time, in-office working, a good work-life balance remains key for many employees. One study suggests 86% of financial services employees say it is important to be able to work from home sometimes. It is not surprising, then, that many financial institutions are choosing to offer hybrid working options.
- Seeking out meaningful and purpose-driven workplaces. Millennials and Gen Zers continue to prioritize roles at companies that have clear social and environmental commitments. However, Bank Director’s latest survey shows that DEI programs are losing momentum, with 57% of institutions not having a formal program in place, up from 42% in the previous survey. Of those with a DEI program, 53% intend to maintain existing practices, and CFIs may want to consider taking a similar approach to attract and retain top talent.
- Fostering growth through upskilling and internal mobility. Given that attracting the right people for senior roles can be difficult in a competitive marketplace, it is unsurprising that institutions are employing strategies to strengthen their pipeline of talent for executive and C-suite roles. Offering coaching or mentorship programs (73%) and providing external career development (53%) for existing talent were the top two strategies identified by respondents in the Bank Director survey. People also tend to be attracted to workplaces that offer clear career development pathways and opportunities to acquire new skills. Investing in upskilling, as well as reskilling, is an important strategy for CFIs to implement to ensure they have a workforce with the skills needed to adapt to a changing financial services landscape.
Competing in today’s talent acquisition landscape requires CFIs to offer more than just competitive pay. They need to create transparent, inclusive, supportive, and purpose-driven work environments that promote a good work-life balance. Embracing emerging technologies, such as AI and data analytics tools, can streamline hiring and enhance the candidate experience, while a skills-first approach can help build agile, future-ready teams. Offering clear development pathways, along with learning and upskilling opportunities, will strengthen engagement, help attract new talent, and build a resilient workforce.
