Millions could be saved by tackling the skills shortage

The report found that 28 per cent of financial and professional services firms in Yorkshire face a skills shortage and it is more important than ever for businesses to invest in their staff.

The research found that reskilling staff can create cost savings of up to £49,100 per employee compared with recruiting or making a role redundant.

The report found that reskilling an employee costs on average £31,800 compared with the redundancy and rehire approach which carries an average cost of £80,900.

"The Reskilling: A business case for financial services organisations" report, published today, found that a company with 30,000 employees could potentially save between £75m and £115m over a four-year period by upskilling current employees into the roles they need to fill.

Andy Haldane, head of the Levelling Up Taskforce, said: “The UK's skills deficits are large and long-lived. Covid has exacerbated those deficits.

"Tackling them calls for a large and long-lived programme of reskilling the workforce, in financial and professional services and beyond. Doing so makes both commercial sense for individual firms, and collective sense from a macro-economic perspective.

“The FSSC is doing great work to fuse together the commercial and the collective by working across business partners to re-skill workers and thereby boost productivity in individual businesses and the economy as a whole."

The report said that the need for reskilling in financial services has never been greater as the industry faces a significant shift in the skills requirements for its workforce, increasing skills gaps across the UK and a greater demand for talent.

Research by The World Economic Forum estimates that by 2025, 85 million existing roles, globally, will be displaced due to factors such as technology and automation. However, the report published today shows there is a clear business case in favour of reskilling and strategic workforce planning.

It added that given demographic trends, including an increase in life expectancy and retirement age, the scale of the change needed, amid digitisation elsewhere in the economy, mean that the skills gaps in financial services cannot be met through recruitment alone.

The report published today is designed to help businesses address the difficult challenge of regularly upskilling existing staff to meet emerging skills gaps, and to equip them for roles that may not yet exist, ultimately encouraging firms to undertake a robust forecasting of future skills needs.

Claire Tunley, CEO of Financial Services Skills Commission, said: “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.

"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, added: “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.”