Financial Services Skills Council
Financial Services Skills Council Regional Contact:
Paul McCraith, Relationship Manager (Northern England)
Financial Services Skills Council
M: 0845 2573772 / 07841 235222
www.fssc.org.uk
Learning and Skills Council Contact: heather.gourley@lsc.gov.uk
Click here for the Financial Services Skills Council (FSSC) North East Fact Sheet
The financial services sector touches every single person, business and organisation in the UK and effectively controls the UK economy through its influence over interest rates, the stock exchange and pension funds.
The Financial Services Skills Council represents Banks (retail and wholesale), building societies, leasing, investment and unit trusts and venture capital, life insurance, non-life insurance, insurance brokers, administration of financial markets, pension funding, Independent Financial Advisors, unit trust companies, fund managers, asset managers, stockbrokers, actuaries, loss adjustors, exchange stock, futures, foreign, etc fund management.
Overview of the Sector in the North East
The North East financial services industry employs 3% (83,600) of the sector’s total UK workforce.
Regional distribution of financial services employment (SSDA Matrix)
|
Employment as a proportion of UK employment
|
Financial Services
|
All Industries
|
|
|
England
|
87%
|
84%
|
|
|
North East
|
3%
|
4%
|
|
|
North West
|
10%
|
11%
|
|
|
Yorkshire & Humber
|
8%
|
8%
|
|
|
East Midlands
|
4%
|
7%
|
|
|
West Midlands
|
6%
|
9%
|
|
|
East of England
|
13%
|
10%
|
|
|
Greater London
|
21%
|
12%
|
|
|
South East
|
16%
|
14%
|
|
|
South West
|
7%
|
9%
|
|
|
Wales
|
4%
|
5%
|
|
|
Scotland
|
9%
|
9%
|
|
|
Northern Ireland
|
1%
|
3%
|
|
|
Weighted base ( = 100%)
|
1,194,279
|
27,752,300
|
|
The North East contributed 1.9% to the sector’s total GVA (Gross Value Added) in 2000. In 2002 the region’s contribution slightly decreased to 1.8%.
Characteristics of workforce
Compared to all industries, the North East financial services workforce is characterised by the following: higher proportions of females compared to UK average, aged between 25-44, Caucasian in ethnicity and possessing NVQ levels of 3 and above.
North East workforce attributes (SSDA Matrix)
|
Workforce Characteristics
|
Financial Services
|
All Industries
|
|
|
Gender
|
Male
|
38%
|
52%
|
|
Female
|
62%
|
48%
|
|
|
Weighted base (base = 100%)
|
30,604
|
1,074,296
|
|
|
Age
|
16-24
|
*
|
16%
|
|
25-44
|
63%
|
48%
|
|
|
45+
|
*
|
36%
|
|
|
Weighted base (base = 100%)
|
30,604
|
1,074,296
|
|
|
Ethnicity
|
White
|
97%
|
98%
|
|
Non-white
|
*
|
2%
|
|
|
No answer
|
*
|
*
|
|
|
Weighted base (base = 100%)
|
30,604
|
1,074,296
|
|
|
Qualifications
|
S/NVQ 3 and above
|
62%
|
48%
|
|
S/NVQ 2
|
*
|
32%
|
|
|
S/NVQ 1 and below
|
*
|
19%
|
|
|
Don't know/no answer
|
*
|
*
|
|
|
Weighted base (base = 100%)
|
31,659
|
1,076,337
|
|
Key issues facing the sector now and in the future
The NE is facing a problem of declining services, particularly in the remoter rural areas where there is increased economic pressure on traditional industries, agriculture and fisheries in particular. Some options for the future centre on improved marketing of products and services to make better use of the region’s qualities and distinctiveness. Recent growth in ICT based services and business-processing operations has taken place which is seen in the growing number of contact centres (over 700 jobs in the last two years).
The region faces challenges and concerns regarding business investment support as well as the workforce’s working attitude and their skills to nourish future growth. Challenges have to be faced against a backdrop of an ageing population and an out-migration of young people.
Employment Issues in the North East
Employment within the sector has, and will continue to be, primarily comprised of full-time employment. Steady growth of these numbers is expected to continue to 2012. (Regional Fact Sheet: NE 2005)
Working Futures estimates indicate part-time employment levels will remain constant at 5,000, for periods 2004 to 2014. However, it is estimated that the number of self-employed will decline by 2,200, from 4,600 in 2004 to 2,400 by 2012. (Regional Fact Sheet: NE 2005)
In general, more men have chosen careers in financial services than women. However, this trend is not reflected in the North East, as the region historically focused on heavy industries. The sector has attracted women for various reasons, such as: flexibility in part-time and auxiliary roles and the ability to transfer skills to roles the sector demands. (Regional Fact Sheet: NE 2005)
Employment is predominately female, however, a shift has occurred since 2000 and men are now occupying more roles in the sector. It is forecast that male employment will steadily increase, while female employment levels are expected to slightly decline. (Regional Fact Sheet: NE 2005)
Looking closely at the gender structure of the workforce, there will be minimal shifts in the distribution of full time and self-employed men and women between 2004 and 2014. (Regional Fact Sheet: NE 2005)
Working Futures estimates indicate that female part-time employment will experience the largest change, declining continuously from year 2002 until 2014. (Regional Fact Sheet: NE 2005)
Occupations
Occupational Composition (1994-2014)[1]
A larger proportion of the North East workforce is employed in administrative roles than the industry average. The other major occupational groups include: sales, associate professional and managerial roles. (Regional Fact Sheet: NE 2005)
Future estimates indicate sales roles will continue to grow in the region; while administrative, associate professional and managerial roles are expected to decline by 2014. (Regional Fact Sheet: NE 2005)
Current and forecast recruitment demand (either for growth or replacement)
Demand for employees is likely to fall by 1% through to 2012. (Regional Fact Sheet: NE 2005)
Retention issues
In some sub sectors such as insurance, retention is a real issue with employees job hopping between companies for small increases in salary. This limits the sector’s ability to upskill and develop the high level skills that are so needed. (Radley 2005)
The SSC is working on identifying why this is happening and the best resolution to this issue.
Attracting people into the sector
High-level entry means that young people are not targeted. (Radley 2005)
Skills shortages/gaps in existing workforce and latent skills issues
The entry level for the sector is high (Level 3 as a minimum) Large institutions such as Northern Rock. Northern Rock have issues around recruitment and retention – more recently they have been recruiting A level students rather than graduates and progressing them. Foundation Degrees are now of critical importance to meet these needs. (Radley 2005)
The high proportion of Independent Financial Advisors in the NE leads to a need for generic business competencies. Business support is usually around business coaching. As businesses of this type grow they often merge with similar businesses, which in turn creates a need for a different set of business skills. What is also important is knowledge and understanding of both regulatory training and non-regulatory training. (Radley 2005)
Opportunities and skills shortages
Compared to other UK regions, the North East has lower levels of employment in the sector; however, there still remains a range of vacancies.
Vacancies
Breakdown for all and hard-to-fill vacancies (NESS 2004)
The region’s vacancies are at approximately 3% (1573) of the sector’s total employment, and 1% of these total vacancies are classed as hard-to-fill. (Regional Fact Sheet: NE 2005)
North East’s vacancies identified in National Employer Skills Survey (NESS 2004) suggest that 76% are of administrative and clerical roles (England average, 49%). These roles account for over two-thirds of the sector’s vacancies in the region. (Regional Fact Sheet: NE 2005)
Figure 5 illustrates the breakdown in both all, and hard-to-fill, vacancies in the North East region compared to England. (Regional Fact Sheet: NE 2005)
Hard-to -fill vacancies
In the region, the largest proportion (88%) of hard-to-fill vacancies are for administrative or clerical roles, significantly higher than the national average. Sales and customer services positions are the second hardest occupations to fill, below the national average. By contrast, the region does not experience hard-to-fill vacancies for managerial and associate professional roles (NESS 2004).
Causes of hard to fill vacancies
According to NESS 2004 data, of the hard-to-fill vacancies in the region, 72%, are due to the low number of applicants. A further 25%, is due location. Both levels reported as the main causes of hard-to-fill vacancies are above the national’s average. This is highlighted in Figure 6, which also illustrates that these reasons create much more of a recruitment problem in the region than nationally.
Skills: Shortages and Gaps
According to NESS 2004, financial firms in the North East indicate that skills gaps lie mainly in areas of administrative roles. Among staff in these roles, a lack of communication, technical and practical, and general IT skills were highlighted as particular skills issues. (Regional Fact Sheet: NE 2005)
Looking at all financial services occupations with skills gaps, NESS 2004 indicate that communication, and general IT skills are more of an issue in the region than nationally. (Regional Fact Sheet: NE 2005)
Management & Leadership Skills
Management and leadership are expected to be a need as managers retire from the sector. Gaps in intelligence re: management and leadership surround the need to know more about where training could best be targeted and its importance in terms of the general progression of the workforce, e.g. there is lots known about some sub sectors such as banking but far less about others such as Venture Capital funders. (Radley 2005)
Literacy, Numeracy and ICT skills
There is a need for these at both lower and higher levels and in terms of business need and individual need. (Radley 2005)
Future skills demand
The ageing workforce will exacerbate any recruitment difficulties that already exist as businesses seek to replace staff reaching retirement. (Radley 2005)
Prioritisation of skills issues within the industries
Entry level is high so level 3 and Level 4 qualifications are the priority. (Radley 2005)
Learning and Skills Infrastructure in the North East
It is difficult to engage with cluster agents at the RDA because they work to priorities in the NE. In the NW regional business advisors support us, e.g. feed back issues, intelligence, direct us to areas where funding is needed, etc. (Radley 2005)
The level of training differs greatly for different occupations, e.g. front office employees are often sponsored through appropriate exams, whilst back office staff receive more job specific on the job training. (Regional Fact Sheet: NE 2005)
Barriers to employers accessing the skills provision they need
Over a third of firms reported no barriers to training, significantly more than at the national level. Of those that did report barriers, a lack of funding for training was of limited importance in the region, yet this was an important barrier at the national level.
References
Radley 2005 - Heather Radley, Regional Manager - North
Radley 2005 - Heather Radley, Regional Manager - North
