Banking, insurance leaders look to boost training

GETTING OLDER: While the total number of employees within the Rhode Island finance and insurance sector has fallen over the last decade, it's also gotten older. / SOURCE: R.I. DEPARTMENT OF LABOR AND TRAINING
GETTING OLDER: While the total number of employees within the Rhode Island finance and insurance sector has fallen over the last decade, it's also gotten older. / SOURCE: R.I. DEPARTMENT OF LABOR AND TRAINING

It’s no small secret there’s an age gap in the financial-services workforce in Rhode Island.

For years it has existed largely because of a flurry of industry consolidation that’s caused a reduced demand for new employees. But demographic trends are catching up to the industry, specifically as an older workforce rapidly enters retirement, and financial institutions are struggling to fill the positions with qualified workers.

Industry advocates are pushing for professional-development opportunities and some progress has been realized through partnerships with Rhode Island higher education institutions. But unless the industry is successful in filling its pipeline soon, there could be a real problem with personnel down the road.

“When all of your lenders are 50 years or older, that’s not a good thing,” said Michael D. Ice, professor of finance at the University of Rhode Island. “The banks have an aging workforce and post-2008 they don’t have the capacity to train as much as they might like.”

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In Rhode Island, about 48 percent – or 3,755 – of those employed in the banking industry last year were 45 years or older, according to data collected by the R.I. Department of Labor and Training. This represents a 22.6 percent increase compared with a decade earlier.

In insurance, at the national level, a recent study by Deloitte Consulting LLP shows that 1 million of the 2.3 million workers in the insurance industry will retire in the next 10 years, leaving about 400,000 positions to fill by 2020. Rhode Island numbers were not immediately available, but the trend is felt among industry executives.

“There’s no questions about it,” said Natale Calamis, president and CEO of Starkweather & Shepley Insurance Brokerage Inc., when asked about the workforce gap in Rhode Island.

Calamis is about to retire after more than 35 years at Starkweather.

“We have a real problem,” he said. “Getting younger people into this line of business has been a real struggle.”

Joseph A. MarcAurele, president and CEO of The Washington Trust Co. in Westerly, says there’s a lot of competition for young talent in the state, begging the question: Where will the young bankers come from?

“It’s something all of us in financial institutions have to deal with because right now there are probably not as many quality training programs funded by banks that should exist,” MarcAurele said. “We make an attempt to try and hire a certain number of young people, particularly on the commercial side of the bank, and we make a real commitment to train them.”

The state’s financial-services industry faces another talent issue, Ice notes, which has to do with its geographic location.

“In some ways it’s good Rhode Island is situated between Boston and New York and in other ways it’s bad, because it allows our talent to get out of here,” Ice said. “When a student comes out of school here, he or she can look at a job in Boston with an $85,000 salary, or here where it might be $45,000 to $50,000.”

Rhode Island’s financial-services industry is by no means blind to the problem. But at the same time, local institutions aren’t exactly falling over one another to put up company money and start a training program for young professionals.

The looming workforce gap has sparked a number of financial institutions, including Citizens Financial Group Inc. and Webster Bank, to start individual, in-house, professional-development programs.

The banking industry will likely need a more comprehensive approach to effectively close the widening gap, according to Ice. The same is needed on the insurance side, according to Calamis.

“Nobody ever says, ‘I want to be an insurance guy,’ because insurance isn’t a sexy term for kids – they see it as a boring industry,” Calamis said. “It’s tough getting them in, but once they break through their second or third year, it can be a real gold mine for them and a lot of people can have a successful career in the insurance industry.”

But there are signs of progress.

The financial-services industry last year lobbied the state to lend a hand and both the Rhode Island Bankers Association and the Independent Insurance Agents of Rhode Island were granted $133,105 and $29,780, respectively, through Real Jobs RI.

The state-run workforce training partnership, offered through the DLT, gave out $5 million in federal and state funding to different groups to implement job-training plans to fill immediate vacancies in different industries.

The R.I. Bankers Association proposed to team up with the University of Rhode Island to develop a training program. Likewise, the group of independent insurance agents is partnering with the Community College of Rhode Island to work toward the same solution.

“There was a lost decade when there wasn’t a lot of training or job opportunities in commercial banking,” said Anthony Botelho, president and CEO of Freedom National Bank and president of the bankers’ association.

“There’s recognition within the industry that we need to reinvest some time and resources into commercial bankers and develop that talent pool,” he added. •

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