Insights

In our second installment of a series of industry-specific reviews, we’re taking a closer look at the talent landscape in the financial services industry. Leave a comment or contact us at hello@talentinsightgroup.co.uk to get your copy of the full financial services talent guide.

The financial services industry employs 1.1 million people in the UK, accounting for around 3% of all jobs in the UK economy. After a period of economic turbulence, confidence is returning and with this, so is investment in skills, technology and growth.

A recent survey highlighted this positivity, with a rise in optimism, volume of business, employees, and investment reported across the industry. However, the picture is varied. Optimism is particularly high in banking, which scores +41, while the insurance and investment sectors have a much more pessimistic outlook, with scores of -73 and investment -2, respectively. All sectors report increased employment, with talent needed to face the challenges of new financial regulations, inflationary pressures and the pace of technological advances.

Looking ahead, the competition for talent looks set to intensify, with 72% of respondents saying they expect recruitment to stay the same size or grow in 2023, and 57% of talent acquisition professionals at financial services organisations say they expect company-wide headcount increases in 2023. This is compounded by cross-sector competition for high-tech digital skills, particularly those relating to Artificial Intelligence and data analytics.

Alongside this increasing competition for talent, is the challenge of confronting the industry's lack of diversity. The financial services industry has a long road ahead to change the perception of a male-dominated and privileged industry. Unfortunately, recent studies have highlighted how much work there is to be done. The 2023 Progress Together report found that in finance, socioeconomic background is more likely to impact a person’s route to success than gender or ethnicity. A 2022 report by the FCA highlighted a lack of data regarding ethnicity, and it showed there were divergent outcomes for different ethnic minority groups where data was available. This is consistent with a 2022 report from Reboot, which found that Black And Minority Ethnic (BAME) employees in the finance sector were likely to suffer discrimination in the workplace.

In the UK, the FCA and PRA published two Consultation Papers on Diversity and Inclusion in the industry. Consultations close in December, with policy statements to follow in 2024 and rules coming into force 12 months later. The recommendations include clarifying D&I governance and accountability at a Senior Management level, adopting a robust data and evidence-driven D&I strategy backed by D&I targets, annual D&I monitoring, regulatory reporting, and public disclosure.

An intelligence-led approach is vital to moving ahead of the competition and meeting the challenge of coming legislation. This includes:

• Focusing on D&I efforts - including where and how you recruit, how you upskill and promote and leaning into flexible working.
• Recruiting and upskilling for the future - map skills gaps, plan for training needs and how your staff might move through the organisation to backfill critical roles.
• Strengthening the Employee Value Proposition - challenge the traditional view of the sector, highlight support schemes and initiatives to impact the wider world and showcase diversity and inclusion efforts in your business.

For more insight, download a copy of our complimentary guide to Diversity & Inclusion or get in touch for a free, no-obligation discussion. 

Additional sources
https://www.statista.com/statistics/298370/uk-financial-sector-total-financial-services-employment/ 
https://www.gem.com/resource/2023-recruiting-trends-financial-services