Reskilling: The cost-effective response to changing needs in the financial services sector

How we work in the financial services sector is changing. Fast. Interestingly, innovations in technology are driving this change. Most critically, new technologies have meant a re-evaluation of the core skills businesses need to function. Around 42% of business-critical skills are not what they were a decade ago. The World Economic Forum (WEF) called this a ‘reskilling revolution’.

This revolution threatens to leave 20.8% of current workers at risk of displacement. When that figure is applied to the UK market, it represents approximately 229,000 people. The size of the downstream impact on personnel and lack of availability of key skills are material risks to arguably every financial services institution.

Findings from the WEF also suggest that if the current pace of workforce upskilling doesn’t improve, it could take decades for today’s employees to be ready for the future of work. Financial services leaders simply cannot afford to rely on recruitment alone to fill skills gaps. Unless they invest significantly in nurturing talent, their organisations’ will be unable to meet current or future business challenges.

Reskilling for a future-ready workforce

The skills shortage is already high on the agenda for many financial services (FS) leaders. In PwC’s recent CEO survey, 71% of financial services CEOs said they are concerned about the availability of key skills. However, this concern has not manifested into action. Only 14% of FS CEOs have made
significant progress to establish an upskilling programme to tackle this issue.

Harvard Business Review estimates that more than 60% of a company’s future roles can be filled by current employees. But only if adequate reskilling and upskilling programmes are in place. Unsurprisingly, candidates are also enthusiastic about organisations who promise to invest in their professional development.

Choosing to reskill your workforce can bring many business benefits. Above all, it is cost-effective. The WEF estimates that the cost of reskilling amounts to £16, 600 per employee. Investing in reskilling programmes are not only significantly cheaper than replacing a redundant member of staff, but also gives a greater return on investment than hiring for a brand-new role. The cost savings amount to £49,100 per reskilled worker.

Investing in reskilling your employees can also:

Increase productivity

92% of businesses say that skills gaps are a major source of lost revenue. Reskilled workers have the skills to be more productive and, crucially, you can continue to benefit from their existing institutional knowledge and expertise whilst they develop those new skills.

Mitigate the risk of digital transformation

Committing to a digital transformation project is risky. If your permanent workforce lacks the skills to use and maintain the technology effectively post-implementation, it can lead to increased security and compliance risks as well as significantly reduce your ROI if components and features are underutilised.

Improve your ability to anticipate and respond to compliance risks and regulatory change

Regulators are increasingly concerned with consumer protection and mitigating risk, particularly when it comes to cyber security. Both the FCA and PRA routinely assess the skills and expertise of both C-suite and other employees to determine if businesses have the ability to mitigate risk. Lack of relevant skills can lead to significant financial penalties and loss of consumer trust.

Improve your employer brand and reputation

Financial services firms should also be concerned with their reputation as an employer. Redundancies have the potential to damage you employer brand. Offering reskilling opportunities not only removes that danger but signals to both current and potential employees that you are invested in their professional development.

Boost morale

Improved morale has the benefit of creating a more engaged and happier workforce, reducing voluntary turnover and associated recruitment costs. Whilst not every employee is going to be enthusiastic about extensive reskilling, 94% of employees surveyed by LinkedIn said they would stay longer at a business that offers learning programmes and reskilling initiatives.

Support diversity and inclusion

Reskilling can support diversity and inclusion efforts by opening up new talent pools, taking on promising young employees from underrepresented groups, and allowing you to choose the direction of the skills they acquire. Reskilling programmes are also attractive to younger demographics who bring with them more diverse perspectives.

For a truly future-proof workforce that can meet the evolving challenges of the financial services sector, business leaders must consider building resourcing strategies that combine the power of reskilling with a traditional recruitment approach.

How Davies Resourcing can help you develop your workforce to meet the future

We believe that innovation starts with finding the right people. As a true specialist, Davies successfully works with hundreds of insurance firms and have over 1,000 learners currently participating on one of our insurance focused development programmes.

Davies Resourcing can help you develop reskilling programmes and mentoring schemes that will support your business goals as well as provide recruitment solutions for a robust and agile resourcing strategy fit for the future.

Contact us now for advice or support in sourcing top talent.