A new report, Skills for future success, published this week by the Professional & Business Services Council and the Financial Services Skills Commission, says an acceleration of automation and digitisation due to the pandemic, alongside globalisation and changing workforce demographics are prompting demand for new skills that bring together technology, interpersonal skills and industry knowledge.
The research suggests that annual output across the sector would be 12% higher if skills gaps were plugged, equivalent to £38bn annually by 2038. Much of these gains would help to support regional levelling-up across the UK, it says. Despite an increasing regional presence - 43% of surveyed employers plan to increase their presence in strategic hubs across the UK - regional firms face more acute skills challenges, the report warns.
Firms already report increased operating costs and staff workload as a result of skills challenges. Failure to act could leave the UK losing out to its global competitors, the report warns. It calls on employers, government, and education providers to rise to the upskilling and reskilling challenges while warning that more detailed skills forecasting is necessary to understand the specific skills and scale required for emerging areas like low carbon services.
The report, supported by Capgemini, City of London Corporation, PwC, and TheCityUK, recommends an eight-point plan to tackle skills shortages that it says will benefit firms of all sizes. It includes building a lifelong learning culture across the sector, increasing the supply of tech skills and digital literacy across the sector and wider economy and ensuring that efforts to build a skilled workforce are underpinned by a commitment to diversity and inclusion.
The financial, professional and business services sector provides 5.5m jobs across the UK and hires nearly 20% of graduates entering the UK labour market each year. Mark Hoban, Chair of the Financial Services Skills Commission, said urgent action was needed to build an enduring skills culture across the UK and build a sustainable pipeline of high-level skills.
“Not only is this vital to delivering on the government’s aims on levelling-up, doing so is essential to developing the digital expertise we need to drive forward industry’s priorities such as improved customer outcomes, realising the full benefits of investment in digitisation and fostering far greater diversity and inclusion in our industry,” Hoban said.
Kevin Ellis, Chairman and Senior Partner at PwC UK, said: “Investing in skills and training not only helps attract and retain people, it is also key to improving social mobility, which will grow the talent pool nationwide. In my own firm, we’ve seen how working together with local communities and universities can move the dial on accessing and developing skills and talent.”
Sharon Spice, Director of Global Student Recruitment, ICAEW, said the report presented some very considered and ambitious solutions to tackle this issue. “While technological change, the rise of remote working and an increasing regional presence among firms could add billions to regional economies, it could also put even greater pressure on skills shortages and upskilling the existing workforce if the size of the talent pool remains the same.
“Fostering a culture of life-long learning within the sector is crucial. Businesses are constantly evolving and chartered accountants, and other professionals, must adapt their skills to the ever-changing needs of the economy. We must also build a pipeline of diverse talent and potential for the future, which is why social mobility initiatives such as Access Accountancy and activities which help develop new skills such as digital, are going to key for those entering the employment market,” Spice said.
Meanwhile, anecdotal evidence from ICAEW members suggests that further extension of furlough might mean that people’s roles and skills are not as relevant as they were 18 months ago, which is further aggravating the skills situation and putting an additional strain on the job market.