Services now account for nearly 80% of the UK’s GDP, meaning that financial and related professional services are more important for the economy than ever as me move into a post Brexit business landscape.
Yet, at a time when we need to be more competitive, productivity lags behind the rest of the G7 nations and much of the European Union.
What can we do to address this?
Skills and talent are the most obvious answers, but also, perhaps, the most complex. If it was an easy problem to solve we wouldn’t be discussing it on such a regular basis, for instance at the recent TheCityUK National Conference where I took part in a panel discussion on skills in the financial services sector.
Financial and professional services were once the most prestigious destination for any talented and ambitious young graduate. The millennial generation is different though, and the rise of the tech industry and start-up culture means that much of the best talent has a different route planned.
Brexit also poses a very real risk that the UK industry’s access to talent could be seriously impeded. Limited availability of visas or work permits, international firms moving operations overseas, and Britain becoming a less attractive destination for young people from other countries, are challenges that businesses, employers and education providers will have to face.
With increased competition and a retreating talent pool, together with higher education providers, the financial and professional services industry must take action now.
I believe there are two steps to achieving this. Firstly, the industry needs to play a much more active role in nurturing a talent pool with the right skills to make a difference. And secondly, financial and professional services need to reposition themselves to ensure they stay relevant in today’s job market.
In terms of developing a talent pool, how can the industry develop stronger links with universities and other educational institutions?
At Alliance Manchester Business School, we’ve been involved with many pioneering projects with organisations in professional services and finance. Business needs to take a leading role in engaging educational institutions in such activities to ensure teaching and research serve their needs and interests.
The Manchester Method, for which our school is known, describes the practice of learning by doing. In order to offer the doing part, employers need to provide opportunity for students to gain experience.
This may be something as simple as contributing to student or academic research, to providing a work placement or internship. It could also mean collaborating with a university on a research project or Knowledge Transfer Partnership, which help to test academic theory in a live setting and improve the quality of future research and graduates.
Every door that remains open helps to give students better insight into the industry and helps them to understand what’s required of them when they enter the workplace.
We have all benefitted from opportunities given to us at some stage in our careers, and we all need to make a conscious effort to offer the same to others. Whether that’s agreeing to an interview for a dissertation or sponsoring a programme or research project, every positive action helps in its own way.
The School’s MSc Quantitative Finance students meet with senior risk managers at Santander Bank in London to pitch their research ideas and get feedback on them before they even start working on their dissertations. Our students get to understand first-hand what is topical and important to bankers, and they can focus their time and energy on work that will benefit them in the early stages of their careers.
We work closely with the major accounting recruiters to ensure that we are up-to-date with not just the standard professional competencies but also the in-demand soft skills such as critical thinking, adaptability, teamwork, research and communication.
It is also possible to incorporate a year-long internship to the BSc Accounting programme which is endorsed by the Institute of Chartered Accountants in England and Wales. We are also collaborating with the Institute on a module that helps students understand the role of accountants within society, and what is meant by the public interest.
Working with educators is very important, but if employers can’t attract the talent the help develop then that work will be in vain.
How can financial and professional services companies make themselves relevant to millennial jobseekers?
Millennials are the first generation to place greater importance on social purpose. Culture is important to them, and some of the factors that attracted Generation X to careers in the city will be a turnoff for today’s graduates.
Anecdotal evidence from our students confirms that the current crop seek diverse roles, often with purpose or global reach, that offer a healthy work-life balance. They don’t always see that in well-known corporates.
This is surprising considering the big budget CSR campaigns that many firms undertake. Customer marketing teams are at pains to illustrate the social impact of their work. Whether that’s ethical investment or supporting foreign development programmes, we’ve all seen the campaigns that showcase some of the excellent work happening in the industry. But we don’t see the same messages from the graduate recruitment teams and there is a huge opportunity to communicate the potential for societal impact that can be made by a role in financial services.
Instead, millennials look to West Coast tech companies as the model for their ideal employer. These companies are often outspoken on the big issues that resonate with younger people. Graduates are attracted the diverse, vibrant working communities fostered at these companies. They want the freedom to express themselves and learn from teams with wide-ranging skills and experiences.
In the past at least, finance could not have been described as a diverse sector. Positive steps have been taken in recent years, but there is still room for improvement. Initiatives such as blind CVs are helping to offset biases, unconscious or otherwise, and open new pathways for people from different backgrounds.
Throughout my academic career, my research has focused on social stratification and mobility. Workplace diversity is an important factor in creating more opportunities for people from different backgrounds. It can also benefit the employer, and in a competitive labour market, we must embrace diversity or risk becoming marginalised.
Many of the experts working in financial services will already be aware of these challenges, and in a way, I’m preaching to the choir. I ask you to think about these issues and how you can start the process of change within your organisations.
We are at the most critical juncture for business in this country in its history. We need leaders to embrace new ways of approaching the talent and skills issue. More of the same isn’t going to fix the problems that we face.
TheCityUK’s first National Conference brought together policymakers and senior representatives from across the industry, politics and academia to discuss a variety of key policy issues, including skills, talent and infrastructure. It also focused on how the industry can enhance its work with policymakers to support and enable growth across the UK and discussed the recommendations of their report ‘A vision for a transformed, world-leading industry’, prepared with PwC.