The UK financial services sector is set to lose the war for talent and hit a skills crisis if it does not take up action.
According to an independent review commission by HM Treasury, the UK financial services sector has to address “fundamental challenges”.
These include upskilling of staff, strengthening purpose and culture, as well as its poor diversity in leadership.
The Financial Services Skills Taskforce, supported by EY and The City of London Corporation, found that changes in the workplace demand a new approach to attract, motivate and retain talent.
Furthermore, it must become more attractive and compelling as a career path. In addition, it must do this to be able to compete with the popular tech sector.
The report highlighted key challenges:
- Skills gap: financial services has a growing skills gap, up 30% between 2015 and 2017. The sector also depends on those with the highest skill levels; 60% of employees compared to 45% in the whole economy;
- Diversity: 44% of the financial services workforce are women, but only a third of senior managers are. Also, around nine in ten financial services workers are white;
- Attracting and retaining talent: The percentage of MBA graduates from leading schools entering financial services has fallen from 43% to 28% between 2007 and 2016. Only 10% of young people in the sector say they will stay long-term. Fewer than 40% of students associate the sector with creativity or a dynamic work environment, and
- Training: Financial services spend less on training than other sector. It has the third-lowest spend per employee and the second-lowest per trainee.
Mark Hoban, chair, Financial Services Skills Taskforce, said: “There is no doubt that the financial services sector is facing an existential skills crisis. While there are many examples of good practice, the industry lacks the overarching vision, coordination and focus needed to weather the megatrends transforming global business.
“Only through coordinated and collective action by industry, the education sector and government can we bring about the necessary system-wide changes needed for UK financial services to stay competitive in a transformed digital marketplace. For this, we need a unified skills framework to reskill our people and attract and retain new talent at scale and cost effectively.”
John Glen MP, Economic Secretary to the Treasury and City Minister, HM Treasury, added: “Financial services are one of our great success stories – not just in London, but across the whole of the UK.
“Yet today’s report shows the industry needs to invest further in skills, boost diversity, and ensure we’re training the next generation of leaders and innovators.
“The sector now needs to come together to make financial services a top career choice, regardless of background or where you live, so we can level up the whole nation and unleash Britain’s potential.”