Organisations could save up to £49,100 per employee by reskilling staff rather than hiring or making a role redundant, a report has found.
Reskilling an employee in financial services costs on average £31,800, while employers stand to lose £80,900 if they decide to make an employee redundant and rehire someone with skills that are more aligned to the organisation’s needs.
Currently, around a fifth of the financial services workforce is at risk of displacement because they have skills that might soon be obsolete, according to the Financial Services Skills Commission’s Reskilling: A business case for financial services organisations report.
Despite this, only 14% of financial services CEOs have made significant progress in establishing an upskilling programme to tackle this issue, a recent PwC survey found.
The report claims that over a four-year period, a company with 30,000 employees could potentially save between £75 million and £115 million by upskilling current employees into the roles they need filled, rather than seeking to recruit new talent.
“Recruitment alone will not address the existing skills challenges across our industry. That is why the FSSC is today calling for firms to prioritise reskilling, so it becomes an essential component of an organisation’s workforce and planning strategy,” said Claire Tunley, CEO at the Financial Services Skills Commission (FSSC).
“Our business case clearly demonstrates that reskilling can generate a real return on investment, boosting productivity and competitiveness, mitigating operational and reputational risk, and positively impacting the wider economy and society.”
Christopher Box, financial services HR consulting lead at PwC UK, which supported the report, said: “The financial sector has a major presence across the country and employs people at every stage of their career journeys, from school leavers to experienced hires. However, we know regions and nations where business activity is concentrated in relatively smaller or fewer hubs have the greatest challenges recruiting and accessing skills. For these areas especially, reskilling current workers will make a big difference to their business models.
“To remain competitive, financial services companies need to prioritise building programmes that can deliver skills training to their people at scale across multiple levels of experience, expertise, regions and, crucially, programmes that can be delivered across the virtual and in-person divide.”
The report sets out a “roadmap” for building a business case for reskilling employees, including:
- Engagement with leadership to identify which areas are critical to address
- Defining future workforce needs based on the changes that automation and remote working can deliver
- Establishing baseline workforce digital skills from existing capabilities
- Identifying skills gaps and training pathways
- Articulating the business case for reskilling by comparing it with the cost of doing nothing
- Setting up an integrated “reskilling programme office”.