Widening skills gaps in the financial services sector could trigger an exodus of employees over the next few years as demand increases for digital and data skills, according to a major new report from leading tech startup Multiverse.
About two thirds of financial services employees (64%) said colleagues without advanced digital and data skills were at risk of redundancy in the future. A significant number are also planning to leave the sector of their own accord. Nearly two in five (39%) did not think they would still be working in financial services in the next five years.
This comes amid a digitalisation push that’s set to affect jobs across the industry. An overwhelming majority of employees (83%) thought financial services roles will be affected by digital transformation. Almost half (47%) say new technologies are the main cause of skills gaps, a situation where there’s a difference between the skills needed for a job and the skills employers actually have.
The poll of 1,000 employees across financial service firms also found that senior leaders are very concerned about the impact of skills gaps. 93% reported that skills gaps had an impact on productivity, and 94% said they affected employee retention.
Financial services employers are also struggling to hire diverse talent, particularly those from different ethnic backgrounds. 59% of senior managers reported that this was a challenge, and nine in ten of them agreed that apprenticeships were key to creating a more diverse workforce.
The research forms part of a new report called The future of financial services: closing skills gaps and diversifying talent. It also finds that two thirds of employees in the industry (66%) think apprenticeships can play a major role in solving the sector’s skills gaps, with 85% of those who have worked with an apprentice recommending hiring an apprentice to a colleague.
Importantly, apprenticeships can also help to stem the flow of people leaving the industry. Among those who did not think they would still be working in the sector in two years, two thirds said they would likely stay longer if they were offered retraining.
To tackle the critical skills gaps, increase efficiency, and expand opportunities in the sector, Multiverse is recommending that financial services firms should:
Invest more in retraining and upskilling programmes.
Introduce entry-level programmes that are targeted at areas with the greatest skills gap.
Continue to invest in programmes to diversify their workforce, including the use of apprenticeships.
Ensure their unspent Apprenticeship Levy is being focussed on the areas of pressing business need.
Euan Blair, Founder and CEO of Multiverse, said: “From private equity and pension funds to banking and venture capital, the financial services sector is a cornerstone of the UK economy – but the industry is going through profound changes.
“As this report shows, the pace of technological change is accelerating, and it’s leading to increasing skills gaps in the sector. Apprenticeships are at the heart of the solution, helping to build financial services firms that are fit for the future.
“As professionals across the financial services industry argue, apprenticeship schemes provide high-quality reskilling opportunities for existing employees, and an increasingly prestigious, credible alternative to university for those looking to start their careers. The world of work is being transformed, and our report published today makes a strong case for how the financial services sector can keep up.”