Shadow Treasury Minister: We must provide opportunities for employees to be literate in technology and exercise creativity
The importance of human capital was the feature of the Chartered Body Alliance's Labour Conference fringe event, which considered challenges for financial services sector.
The financial services sector employs about 1.1m people, accounts for £75bn in tax annually and provides £190bn (gross value added) to the UK every year.
However, financial services are “not all about money”, Simon Thompson, Chief Executive of the Chartered Banker Institute, emphasised at Labour Party Conference in Brighton.
“Financial capital is certainly important. Much more important to successful financial institutions, whether we define that success in terms of profit or purpose, is the human capital,” he continued.
The importance of human capital was the feature of the Conference fringe event, titled Upskill, Reskill, Future Skill: The next generation challenge for financial services. The assembled panel discussed how the financial services sector can develop and retain talent within the sector.
The event was sponsored by the Chartered Body Alliance - a joint initiative by the Chartered Banker Institute, Chartered Institute for Securities and Investment and the Chartered Insurance Institute who together represent 200,000 workers across the sector.
Simon Thompson described how the world of financial services has changed “beyond recognition” in the last 150 years.
Miles Celic, Chief Executive Officer, TheCityUK said that skills were the “single most important issue that we face as an industry and as a country.”
“Financial services has the lowest level of investment in training of any industry in the UK,” he continued.
Annelise Dodds, Shadow Financial Secretary said that a lack of access to training “holds people back from the professional development”.
The MP for Oxford West warned that there is “the potential for a stripping out of professional services that have been a route into the middle class for a lot of people.”
“We need to make sure the opportunities and training are there, so people can be literate in technology and exercise creativity.”
Miles Celic said it was imperative to ask how the industry can drive success forward and “attract skills into the industry at a time when there is significant technological, political and social change.”
“Skills are evolving fasters than the roles can be filled,” he continued.
On STEM graduates, he warned that those with computer science degrees have the “highest level of unemployment six months after leaving university”.
“Surely something is going badly wrong if you are bringing people in from abroad.”
Andy Westwood, Vice Dean for Social Responsibility at the University of Manchester said that the UK needed to look at “how can we rebuild a culture of lifelong learning.”
He saw technological change, cultural change and globalisation as three “mega trends” which were facing the economy.
The challenges that these trends bring to the UK economy were threefold, he said.
Firstly, the issue of the financial services sector’s vulnerability to change. For example, the need to prepare for the role of automation and AI in the future.
Secondly, he also spoke of the challenges the UK economy faces around lifelong learning, stating that “it has got dramatically worse since 2010. Only 1 in 3 adults have experienced training in the last year”.
He also emphasised the role regional inequality plays which he said would become a “faultline in the election.”
Regional inequality was a point emphaised by Anneliese Dodds. She said the greatest proportion working in those services are not in London: “the image that people might have around those services is not reflective of the reality when you look at the average wage in banking.”
She said there was a need to “work with the private sector around these issues and look at what are the barriers to location.”
Miles Celic stated that there was a need for “greater collaboration within the industry, between the companies, between government and local government and industry, and the universities.”
He stated that the industry was seeing increasing competition for talent, especially from tech firms: “financial and professional services firms are not being able to attract people or hold on the them”.
The Chief Executive of TheCityUk said that perceptions play a key role. “Tech firms” he said, “are seen as more entrepreneurial.”
The panel emphasised the importance of diversity in the sector. Miles Celic stated that 27 of the top 50 companies in the UK ranked for social mobility came from the industry. He warned however, “We are not as diverse as we can be.”
Annaliese Dodds stressed the role of reporting in increasing diversity in the workforce.
“Reporting does drive change at lot of the time” and there was a need for a more “coherent reporting mechanisms.”
She described how “massive glass ceilings” still existed as people move through the organisations and saw reporting as part of the solution.