Upskilling now finance firms’ priority

UK financial services firms are encountering such problems recruiting the talent they need that almost three-quarters of them are making upskilling and retraining existing staff a top priority.

David Sapsted

8 July 2022

The latest 'Financial Services Survey', conducted by the Confederation of British Industry (CBI) and PwC, found that 73% of companies have put upskilling at the forefront of their future business strategies and transformation plans.In an industry where a fifth of workers come from abroad, post-Brexit problems in hiring staff from the EU have exacerbated current difficulties in recruiting home-grown talent. Last month, the CBI called for visa restrictions to be relaxed to make it easier for firms to bring in staff from overseas.Now the survey has shown the extent to which the financial sector is focusing very much on increasing the skills of existing workers.Rain Newton-Smith, chief economist at the CBI, said: “One of the bright spots from the survey was FS firms’ commitment to upskilling and retraining. It’s encouraging to see so many firms put staff development at the heart of their business strategies, and that is sure to reap rewards in terms of recruitment and retention later down the line."Isabelle Jenkins, financial services leader at PwC UK, added that, with a "fierce war for talent" impacting the financial services sector, it made sense for firms to put retaining experienced staff as a top priority."In fact," she said, "our research with the Financial Services Skills Council from earlier this year showed that, reskilling, once seen as perhaps a 'nice to have', can create cost savings of up to £49,100 per employee compared to recruiting or making a role redundant - a significant sum, especially in light of the increasing headwinds due to inflation."So the business case is clear. However, with half of the firms we spoke to admitting that time remains a barrier in delivering training, there remains a crucial shift that some businesses will need to embark on."What we are seeing through today's results show that financial services firms are aware that the fundamentals have been reset, and the breadth of competition for well-trained staff means that firms will need to ensure that they can offer the kind of culture, environment and purpose that will attract and keep the very best."The survey also found that, in the second quarter of the year, sentiment across the financial sector remained downbeat, despite business conditions remaining relatively positive and profitability growth accelerating.In the current quarter, firms expect business volumes to return to modest growth, though profitability growth is expected to slow. Numbers employed are predicted to be broadly unchanged in Q3.Ms Newton-Smith said: “The erosion of business confidence seen in the last financial services survey has pulled through to this quarter, likely reflecting concerns about the impact of high inflation on the economy. With pressure expected to persist throughout the year, there’s a real need for government to press ahead with confidence-boosting measures now.“Implementing a permanent successor to the highly successful super-deduction would help to crank-up investment levels and set the country on a path back to higher growth."