City firms ‘must coordinate skills development to avoid talent shortages’

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Every role in the financial services sector will be affected by automation and the increasing use of technology over the next decade, a report calling for City firms to coordinate around skills development has claimed.

A large proportion of the 1.1 million financial services employees in the UK will need to transition into new roles or re-skill to prevent acute talent shortages in technical, managerial and customer service roles, according to the final report of the Financial Services Skills Taskforce.

The taskforce was set up by the Treasury in 2018 to examine whether the financial services sector has the skills needed to remain globally competitive.

There needs to be a focus on lifelong learning in the City to help employees remain “relevant”, it claims, with the skills they learnt at school, college and university deemed “no longer enough” to sustain them throughout their career.

Although globalisation has helped increase diversity in the sector and allowed companies to deploy teams around the world to serve new markets, it says teams need to become more agile to prevent their solutions from becoming obsolete before they are implemented. This will require managers to upskill to manage staff in remote locations and for employees to develop “niche” abilities and language skills to aid growth.

Mark Hoban, chair of the taskforce, said: “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.

“It is only by re-skilling our people that we will bring about the necessary system-wide changes. We need to need improve diversity and inclusion in our recruitment and retention practices, but this is not enough to transform the workforce.

“While there are firms who are already starting to re-skill their workforce, the sector as a whole lacks an overarching vision of what its skills needs will look like over the next decade. To bring about transformational change, it needs a skills framework to promote the acquisition of new skills at scale and cost effectively.”

The report recommends that:

  • A “Financial Services Skills Commission” is established to act as an independent, single voice that will communicate the sector’s needs to government and education providers. It should also ensure collective action on non-competitive areas that will benefit organisations
  • The sector works with employees to cultivate a culture of continuous learning and invests in upskilling and reskilling staff
  • A “future skills framework” is drawn up, which should be used as a basis for industry-wide collaboration around skills development
  • The sector increases awareness of the career opportunities it offers and widens access to jobs to attract a more diverse talent pool
  • Prioritises diversity, inclusion and progression.

Pauline Hawkes-Bunyan, director for business: risk, culture and resilience at the Investment Association commented: “Attracting and retaining a skilled and diverse workforce is key to the future success of financial services.

“We support [the report’s] focus on the needs of financial services and the proposal to establish a permanent skills commission. This will need to be joined up with other existing initiatives within the industry in order to achieve greatest results.”

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