One in four Gen Z employees left financial services in the last year

Almost half of financial services leaders (49%) report an increase in Gen Z employees* leaving their organisation over the past 12 months, according to KPMG’s latest UK Financial Services Sentiment Survey. Retention challenges were felt most prominently in the banking sector, with 54% of leaders saying they’ve seen an increase in under 30’s leaving their organisation.

The quarterly poll, which tracks the sentiment of over 150 financial services (FS) leaders, found that one in four (26%) Gen Z employees were estimated to have left FS businesses in the past year.

Almost a third (31%) of FS leaders say retaining Gen Z talent is harder than it was five years ago suggesting a widespread concern about stagnating retention efforts and the sector’s future talent pipeline.

Key reasons why Gen Z talent is exiting
financial services

When asked why Gen Z employees were choosing to leave, FS leaders pointed to a range of factors:

• A preference for working in start-ups (42%)
• Better opportunities in other sectors (36%)
• A desire for self-employment or freelance careers (35%)
• A desire for more flexibility or remote working (34%)
• Relocation/cost of living (34%)
• A poor perception of finance as a career (27%)
• A lack of purpose or social impact in the role (26%)
• Mental health and wellbeing considerations (24%)
• Office attendance policies (22%)

Karim Haji, Global and UK Head of Financial Services at KPMG, said:

“The fact that almost half of FS leaders are seeing more young talent walk away from the sector presents a real competitive challenge for financial services. The sector needs young talent to bring diversity of skills, experience and thinking. Gen Z employees are clearly signalling a desire for more autonomy, variety and entrepreneurial experiences. The challenge for FS firms now is how to create an entrepreneurial experience for a social media generation in a heavily regulated environment.”

What firms are doing about it

Almost all FS leaders surveyed (96%) say they are taking active steps to improve Gen Z retention. Popular approaches include:

• More flexible working policies such as term-time contracts or flexible hours (52%)
• Improving engagement and feedback initiatives (49%)
• Enhancing mental health and wellbeing support (47%)
• Mentorship (47%)
• Better onboarding and early career training (46%)
• Incorporating more flexible working policies (44%)
• Introducing more purpose driven projects/ESG integration (38%)
• Revising office attendance policies (33%)

Karim added:

“While financial services firms are investing in retention strategies, our data shows a disconnect between what Gen Z wants – an entrepreneurial environment - and where firms’ efforts are focused – flexible working and wellbeing.

“Office presenteeism gets a lot of airtime, but the reality is that most FS firms have made strides in offering flexibility that goes far beyond remote working, whether that’s staggered hours, flexible contracts or better wellbeing support. That’s to be applauded, but alongside that FS firms must keep pace with the changing values and expectations of young talent.”