Filling in the skills gaps in financial services
By forecasting their future skills needs, banks can reskill their workforce instead of relying on recruitment to solve the skills shortage.
The global war for talent shows no sign of cooling down. Banks are competing for highly skilled staff against both fintechs and big techs, as well as other industries going through digital transformation. According to research by the UK’s Financial Services Skills Commission (FSSC), 92% of its member firms had hard-to-fill vacancies in 2021.
To get ahead, financial institutions need to take a proactive approach in identifying future skills requirements that will help them address rapid technological and societal changes. And in addition to looking externally for talent, they need to be creative in reskilling and upskilling their existing workforce.
In its recent report, ‘Mind the gaps – skills for the future of financial services 2022’, the FSSC encourages banks to map out their skills needs. Almost 80% of its member firms (which collectively employ one third of the overall UK financial services sector workforce) report that they plan for future skills capabilities; however, 20% do not yet collect such data.
Through its research, the FSSC identified five skill clusters – three technical and two behaviours – which are seen as critical to business success: data analysis and insights, software development, digital literacy, creative thinking and coaching. Data and analytics are a clear priority for 38% of participating member firms, with the highest number of votes as a top priority.
However, the report points out that the half-life of technical skills is decreasing. “This means the time it takes for a skill to become half as valuable is accelerating because of innovation and technological change. This increases the pressure to keep up and regularly forecast skills requirements,” says the report. It lists eight best practices in skills forecasting, including building allies for forecasting across the business, generate trust in the process and ensure accountability.
Despite the vast majority of FSSC members planning for future skills requirements, three quarters of firms surveyed do not hold data on proficiency levels. This restricts firms’ ability to develop effective upskilling and reskilling paths, according to the industry-led body, at a time when the skills shortages in the UK means that banks can’t rely on recruitment alone.
Additionally, investing in skills offers clear benefits. According to the survey, 65% of firms have seen a tangible positive impact of investing in future skills for their business, reflected in a reduced need to hire externally. In a previous report, the FSSC estimated that firms could generate cost savings of up to £49,100 per worker through reskilling individuals who would otherwise have been made redundant into roles that would have required external hires.
The FSSC plans to launch a skills gap analysis toolkit in the first half of 2022, which could be useful for banks that face similar skill challenges in markets across the world.
Joy Macknight is editor of The Banker. Follow her on Twitter @joymacknight
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