Tackling Skills Gaps in Financial Services
Nick Goddard
The Financial Services sector continues to face challenges in recruiting and developing the next generation of talent.
Attracting, retaining, reskilling and evolving the workforce of the future is critical to a sector that employs nearly 2.5 million people in the UK and contributes £275 billion to its economy. It will also help to ensure that the UK and London maintain their place as a leading global financial centre.
The global financial crisis of 2007/8 was the most severe since The Great Depression and resulted in a major resourcing reset in banking and financial services. Since then, technology has also played an ever-advancing role in financial services delivery. In more recent years, the impact of the B-Word (Brexit) and C-Word (Covid) have contributed to some firms struggling to recruit the skilled people they need. Since 2022, a record year for labour shortages, the landscape has improved but remains challenging.
A recent article in IFA magazine titled ‘Making financial services sexy again’ described the gap between junior and management positions as “alarming”.
The average age of an independent financial adviser in the UK is reported to be 58, with one in five advisers apparently planning to retire from the industry in the next five years.
"... the average age of an Independent Financial Adviser (IFA) in the UK is 58.
Even more worrying is the fact that one in five IFAs plan to retire from the industry in the next 5 years."
Source: theprivateoffice
As technology has advanced, relationship management skills have declined.
Relationship Management is one of the 13 Future Skills Gaps identified by The Financial Services Skills Commission (FSSC), who exist to ensure the sector has the talent and skills it needs for the future. They say skills gaps in financial services are impacting negatively on productivity, growth and competitiveness.
ABSTRACT has identified improving Relationship Skills as a number one priority within the 13 skills gaps.
"Skills gaps in financial services are impacting on productivity, growth and competitiveness.
Skills gaps have been growing and, if left unchecked, will limit our ability to innovate, grow and serve our customers."
Source: financialservicesskills.org
In Ireland, employment in international financial services grew by 60% from 2014 to 2022 and is forecast to continue to grow.
An assessment of future skills requirements published by the Irish Government in May also identified skills gaps in “Human Experience skills”, such as Emotional Intelligence, influencing, collaboration and teamwork, as well as leadership skills.
"...we need to ensure that not only do we have enough skilled workers to meet the needs of the sector, but also that there are skills, qualifications, education and training programmes in place to ensure that we have a pipeline of talent that can allow the sector to thrive not only now, but into the future."
Greater collaboration between governments, education (including learning suppliers) and industry leaders will provide opportunities for the finance sector to close skills gaps.
For example, a new flagship skills policy has been launched as Skills England. The health of the economy and the financial performance of firms also significantly impact on learning and development budgets and the appetite of organisations to invest in their people beyond mandatory technical and regulatory training. However, firms must do so if they are to thrive and remain competitive in the future.
Acting to Close The Skills Gap
If you are a Business Leader, People Director or Learning & Development professional, ask yourself;
What are the skills gaps that will inhibit your plans and how will you fill them?
ABSTRACT can help you to do this. We are focused on the financial and professional services sectors in the UK, Ireland and globally.
We improve skills and behaviours, managerial and leadership capability and accelerate the talent of the future.
Our learning and development programmes and expert coaching focus on three specific areas of expertise:
For example, our Business Growth programmes will help participants to develop relationships in business, whether its gaining new clients or better serving existing ones and improve performance by driving a commercially focused culture.
Our Career Management programmes offer a framework for those with ambition to accelerate their progress from junior to senior roles, providing the essential skills and tools to manage and lead people.
