The Rhonemus Group 2021 Banking Outlook


We are several weeks into 2021, and we are still experiencing never before seen things. A prolonged Pandemic, weakened commercial and consumer portfolios, margin compression, and an inauguration that will go down in history.

Many of you are registered or will be registering for the usual and customary new year Economic meetings hosted by various groups and industry insiders. I am always intrigued by what the experts tell us at these events. The comments range from doom and gloom to cautiously optimistic. It is not easy using the word “optimistic” with many Economists.

Our outlook is based on nearly 25 years of recruiting, and advocating for banks, bankers, and the industry overall. Before we look ahead, let’s review our recent past. There have been a wide range of banking positions posted on sites like Indeed, Zip, and LinkedIn ranging from 50,000 to over 200,000 open “banking” jobs in the US. The COVID, shutdowns, and vaccine development will continue to impact small banks to a greater degree than their larger counterparts. Many banks not prepared for the digital delivery model will continue to play catch up to those better prepared.

You can take these 2021 Banking Talent predictions to the “bank”:

Demand for Talent: We expect the demand for top talent to continue to outpace supply. A late Q420 hiring frenzy will continue into Q121, and potentially deep into the summer months. We expect a surging need for Special Assets, Credit Collections, and Commercial Lending talent to balance the rising delinquency with growth goals. This balance will also drive new position growth in Credit Support roles in commercial, consumer, and mortgage lending. The PPP program will require banks to either transition lenders into Special Assets, or to find candidates with this skillset. It is not as easy as it sounds to convert a lender into a workout officer.

At the leadership level, we expect an increase in positions supporting digital transformation, strategy, product, marketing, and technology. The titles could include: Chief Technology Officer, Chief Experience Officer, Chief Deposit Officer, Chief Digital Officer, and Chief Strategy Officer to name a few. Many banks have made great strides in identifying a Diversity Officer or starting a Diversity initiative, however the need to increase hiring efforts across all asset size banks will continue throughout the balance of 2021.

Remote Impact: During the onset of the Pandemic, we had a number of candidates that did not want to be the last one hired. Their mindset of “last hired-first fired” was understandable but in our opinion an overreaction. Most of us did not have a choice to go work from home, and for those who have never experienced it, felt a lot of anxiety to perform while things were unfolding with Zoom meetings being interrupted by children, dogs, the family bird and the UPS or FedEx driver.

This remote work setup is not viable for long term success. We understand this is a hot button topic, but we compare this to the open office concept that has been dying a slow death over the past five years. The same thing will happen to remote work, sure some people will continue to work from home in certain areas of banking. If you consider Mortgage Underwriting, this has been a remote role in many banks long before the Pandemic, and that will continue. When well-known industry leaders come out and say “we have to get back to the office due to a 30-40% loss in productivity” it will be a short-lived experiment.

Mergers & Acquisitions: Regardless of different legislative actions the damage to small business and community banking could take years to repair. The sky is not falling, but our economic engine has been and must continue to be the Small Business. As a result of the drag and the loss of more small business with continued shutdowns there will be an increased number of bank challenges and mergers that could require FDIC assistance.

A threat we all face in 2021 is the lack of regulatory oversight with credit unions purchasing banks. This has a negative impact on each of our state bank associations to serve as true advocates for our industry. The continued consolidation of banks will impact state bank associations and give associations an added incentive to collaborate regardless of ICBA or ABA affiliation.