For Teneo Senior Managing Director Matt Smith, the problem of how to attract new talent into insolvency and persuade it to stick around is a looming bugbear. “Of all the challenges currently facing our industry,” he says, “it’s the one that most keeps me up at night.”
With competition for the brightest and best rising – but numbers passing the Joint Board exams to become licensed practitioners at an all-time low – the sector must overcome a series of critical resourcing hurdles.
“There are several factors at work here,” Smith explains. “On a broad level, low unemployment has created a jobseekers’ market, giving finance professionals more choice than ever. In relation to that, insolvency is quite ‘boom and bust’: when we’re busy, it can get really intense. But as younger people are more cognisant of work-life balance – which I think is brilliant, by the way – that may put them off.”
Another key factor is industry dispersal and divestment. When the profession was heavily concentrated within a clutch of larger firms, they were able to move staff across from other departments to boost insolvency headcounts at busy times. Now, the sector is a mixture of large players and an array of boutiques, often founded by former employees of Big Four and other well-known firms.
Smith, who joined Teneo when Deloitte divested its UK restructuring arm, says: “In a boutique, you’re more restricted in your ability to staff up when business booms, so we are having to explore alternatives. Given the cost of living crisis, an upturn of restructuring and insolvency work could be just around the corner. And firms across the sector will find that quite challenging.”
Smith is not overly concerned about the Joint Board exam rates, bearing in mind that licence-holders occupy largely senior roles, such as partner or director. A greater preoccupation is how the profession should stimulate grassroots interest.
“We’re just not very good at talking about what we do,” he says. “Media coverage of corporate insolvency dwells overwhelmingly on job losses, so it’s always negative. But this is a really exciting profession, with so much variety. For example, there are regular successes in restructuring and turnaround, which are all about problem solving and helping people.”
Smith notes: “A lot of us in the industry are quite media-shy, particularly regarding social media – which is understandable, given professional sensitivities. But it does hold us back, in terms of making people outside of the profession aware of what we actually do, and I think more could be done to get a positive message out there about our work. That’s definitely a challenge that we need to look into.”
A lack of diversity across the profession is also cause for concern, Smith believes. “To a large extent, the ‘pale-and-male’ adage applies. We have started the process to address this, but it will take time, and more needs to be done – both in individual firms and across the sector as a whole. Critically, industry leaders need to be fully behind making positive changes to how we encourage a more diverse talent pool.”
Call for Champions
The profession’s diversity and inclusion (D&I) issues, and how they may be affecting talent attraction is a key area of focus for Claire Hardgrave, Head of Insolvency Practitioner Regulation at the Insolvency Service. Within the Civil Service, Hardgrave has worked on successful diversity initiatives in several government departments, and she has brought that passion across into her current role.
Since last year, she explains, the Insolvency Service has been collaborating with insolvency trade body R3 and a steering group of insolvency professionals to obtain a better understanding of – and improve – D&I within the sector. As a starting point, R3 ran a survey among its members to source definitive data on the profession’s diversity levels.
“In macro terms,” Hardgrave says, “insolvency looks somewhat more balanced than it was typically thought to be. The catch: representation of women, and staff who are Black, Asian or from other minority-ethnic groups, declines substantially with escalating seniority.”
In response, the D&I steering group has launched a campaign to build a network of Diversity and Inclusion Champions who will work with the group to identify some of the great work that firms of all sizes are doing to support diversity, and understand a) what more they would like to do and b) which additional steps would be of real value.
The group’s aim, according to Hardgrave, “is to build a picture of what best practice looks like, for the benefit of the entire industry”.
For those firms unsure of how to tackle the issue head on, Hardgrave is keen to take the legwork out of it for them: “What are the companies with good results in this field doing to make themselves attractive places to work?”
In the jobs market, word of mouth counts and prospective recruits are quick to check a firm’s stance on diversity, Hardgrave says.
An Insolvency Service university outreach programme in the autumn aims to show students in accountancy, business and law that insolvency is an intellectually stimulating, varied and rewarding career option.
“People entering the workforce now expect D&I as the norm,” Hardgrave says. “In terms of attracting talent, the more we can do to raise awareness of the great work already done, help firms to take further steps and showcase successes, the better.”
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The insolvency landscape is changing, and its role is more essential than ever. From new regulation, trends and career roles to advice for firms and the challenges ahead, this special explores all angles of the issue.
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