Hot Sector Spotlight: Finance

Generally speaking, one key theme in regards to the current state of the UK economy is that there is a degree of uncertainty at present – similar to last year. With residents and consumers being hit by energy bill hikes and soaring petrol prices, the financial outlook is rather treacherous. Inflation is an ongoing issue, both in its current state and its anticipated trajectory, as well as its likely impact on consumer spending.

Interest rates also continue to have an effect on the economy, and at the end of last year, the Bank of England lifted interest rates following a rise in inflation to a decade high of 5.1%.

Thankfully, it isn’t all bad news.

Despite the pandemic and Brexit throwing a spanner into the economic works of the country, financial services still managed to be a huge contributor. In 2020, the financial services sector contributed £164.8 billion to the UK economy, which was almost 9% of the total economic output. The sector was largest in London, where half of the financial sector’s output was generated.

The UK financial services sector was also the third largest in the OECD in 2020, and there were 1.1 million financial services jobs in the UK in Q1 2021, which amounted to 3.3% of all jobs nationally.

The good news doesn’t end there, either – exports of UK financial services were worth £62 billion in 2020 and imports were worth £16 billion, so there was a surplus in financial services trade of £46 billion.

Since leaving the EU, data suggests that some jobs and business has been lost to other financial centres outside the UK, but thankfully the impact doesn’t look to have been as big as initially feared by some in the financial services sector.

The global view on the UK finance sector is a positive one.

Regardless of Brexit and still recovering from the pandemic, 90% of global financial services investors believe that the UK will retain the same level of appeal or improve over the next three years, up from 75% in 2021 and 50% in 2020. 

According to a survey from EY on UK attractiveness, almost 90% of global financial services investors are planning on establishing or expanding operations in the UK this year, which will not only result in a boost to the sector overall, but will also increase hiring needs for financial organisations. However, financial services firms are continuing to experience skills gaps, and investment in learning and development is not keeping up with the evolving skills needed in the sector.

Financial services roles are changing.

UK Finance surveyed financial services workers to discover how the skills required for their roles are adapting or changing, and the results were in keeping with post-pandemic trends, in regards to hybrid working. 30% of survey respondents said that they needed more digital or tech expertise, 28% needed a better understanding of the mental and physical health of their staff and customers, 21% required different management and leadership skills, and 36% wanted a better understanding of work-life balance. 

These training and development needs, combined with existing skills gaps around complex analytical skills (57%), lack of specific technical skills and lack of operational skills, demonstrates that the case for organisations investing in reskilling and upskilling their workers is stronger than ever.

Attracting young people to work in the finance sector is crucial.

With the need to train and upskill existing workers, another method hiring managers need to consider is how they are attracting young people to begin a career in the finance sector. A degree in finance or a related field does not necessarily result in graduates moving into a role in the industry, meaning employers need to assess their hiring strategies and consider programmes such as graduate and apprenticeship schemes. 

If young people with relevant qualifications or a desire to work in finance are offered a clear progression plan and hybrid working, employers will have a far greater chance of enticing them into a career than those who are yet to offer such opportunities.

Looking for your next challenge in the finance sector? 

We work with some well-known names in the UK finance sector who are currently on the lookout for talented and experienced individuals to join their teams. 

Contact our dedicated finance recruitment team who can tell you more about the latest opportunities available that fit your skills, experience and career aspirations on 0161 828 8726 or email enquiries@mccarthyrecruitment.com.