Wisconsin’s Financial Services Industry: Strong and Growing

Ask someone to name top industries in Wisconsin, and they’ll likely mention paper, dairy, cheese-making, maybe some manufacturing segments. However, while it may not be top of mind, Wisconsin’s financial services industry, including banking, insurance, credit unions and financial consulting, represents a significant part of the state’s business output.

The financial services industry accounts for 10 percent of the state’s gross domestic product, which represents a larger part of our state’s economy than the national average. By category, 50 percent is in insurance and related activities, 41 percent is in credit intermediation (traditional banking products and activities), 7.6 percent is in security/commodity activities, and one percent is in funds, trusts and other financial vehicles.

In addition, the nation’s largest life insurer (Northwestern Mutual) and the largest fraternal benefit society (Thrivent) are located here, as are the 16th largest property/casualty insurer (American Family), the largest insurer of churches nationwide (Church Mutual), and the largest insurer of jewelry stores (Jewelers Mutual). Four of the top six U.S. banks with traditional retail banking operations have branches here, and 269 banks are headquartered in the state.

Sector workforce needs

Statewide, more than 125,000 residents work in financial services, and sources predict that growth in financial service jobs will outpace the Midwest and the nation over the next 10 years, with 136,000 total positions projected by 2021. Pair that with the industry’s graying workforce (45 percent of workers are over age 45), and it’s no wonder the financial services sector anticipates a worker shortage in the next five to 10 years.

Projected workforce growth in finance & insurance

“Wisconsin is an excellent state to do business, with a stable, reasonable regulatory climate and experienced regulators, and companies are happy to call Wisconsin home,” says Connie O’Connell, executive director of the Wisconsin Council of Life Insurers. “But a potential barrier to growth is the pool of employees, because we’ll need a steady stream of well-qualified individuals to fill available positions.”

To address this issue, WEDC partnered with several industry leaders to form a financial services consortium (FSC) in 2012. The group, now more than 30 members strong, includes representatives from each sub-sector within the industry.

Luke Fuszard, WEDC financial services manager, says the consortium is patterned after other successful consortiums created in recent years, including the trucking and food and beverage industries.

“The FSC will increase public awareness of the sector, identify specific workforce needs and educational programs that could serve as statewide models, and engage with education and policy representatives,” Fuszard says. “Hopefully, our collaborative efforts will ensure a full pipeline of qualified, well-trained, motivated graduates interested in financial services careers.”

Marketing industry careers

One of the first steps is promoting the industry’s secure, well-paying jobs to high school and college students.

“Insurance is not always a career target for young adults,” O’Connell says. “We must encourage students who excel in math to consider actuarial science, those good at computers to look at insurance and IT, and nursing students to consider life insurance underwriting.”

O’Connell says insurers are able to secure the IT resources they need, but sometimes that means using out-of-state vendors. “Our industry would like to keep more dollars in the state to be even better positioned for long-term growth.”

Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association, says Wisconsin banks have a good recruiting pool but agrees on the need to market the industry. “Banks help consumers plan for a solid financial future, which helps them achieve their dreams,” she says. “We need to strengthen our reputation and make banking a more attractive career option.”

Corey Hoze, senior vice president of government relations at Associated Bank and WEDC board member, says awareness of available career paths will keep more talent in Wisconsin. “We’ve always had retail and commercial banking career paths,” he says. “Now, with the increase in federal regulations, compliance is a big growth area and compliance officers are in high demand.”

Training partnerships on the horizon

Poels reports that WBA’s training programs provide important professional development opportunities, from specific topics like compliance training to a leadership institute for middle managers. However, she says the consortium can help ensure alignment with tech colleges and universities so educational programs stay relevant and aligned to the needs of the banking industry.

“We need to make sure entry-level employees have a basic understanding of what a bank does, and we’re interested in broadening technical training programs that are available in select areas statewide,” Poels says.

One notable training initiative already underway is a rapid-hire program that trains and places veterans in open insurance positions. Sponsored by the Office of the Commissioner of Insurance and Madison College, the program identifies interested veterans, helps them attain an insurance certificate within one semester, and matches them with employers with openings to secure job offers.

And Thrivent Financial in Appleton is looking to take its existing summer intern program to a new level. Terry Timm, senior vice president of shared services and administration, says his team is defining the skill requirements for critical job openings projected in the next 10 years based on expected retirements. They’re exploring options with local schools to create a multi-year, comprehensive training program for interested and talented students in those select areas.

“We’re looking to leverage our existing educational partnerships and adopt a job-training model that has worked so well in the manufacturing sector,” Timm says. “Being part of the consortium allows us to collaborate with our peers to create programs to address the workforce needs we’re all facing.”

FSC initiatives in progress

According to Fuszard, the consortium is working on several initiatives now and will broaden its work throughout the year. The first step is to partner with the Department of Workforce Development to create an industry-specific job board on the Job Center of Wisconsin site to include employment postings, industry information and training programs.

The education sub-committee is developing a strategic plan to engage secondary and post-secondary educational institutions to attract young people to the industry, and the marketing team is promoting the industry in target trade association publications.

WEDC is also conducting additional workforce data research and will compile an official industry report that will be presented to the governor’s office later in the year.

For more information:

Luke Fuszard
WEDC Financial Sector Manager

 (January 2013)