The Financial Services Sector: Poised for a Major Hiring Surge in the UK
Daniel Bloom
Client Services Manager @ Hydrogen Group | Wealth, Investment, Fund & Asset Management (Compliance, Financial Crime, Risk, Business Transformation & Technology specialist)
After several years of restrained hiring due to economic uncertainty, the UK financial services sector is on the brink of a significant recruitment wave. As firms grapple with project backlogs, increasing regulatory fines, and the urgent need for digital transformation, the demand for specialised talent is set to rise sharply. The necessity to overhaul outdated hiring strategies has never been more critical, with talent shortages, regulatory compliance pressures, and technological advances forcing a rapid shift.
Key Factors Behind the Hiring Slump
The past two years have witnessed a marked slowdown in hiring across the financial services sector. Data from the UK government and major financial institutions show that this downturn was largely driven by macroeconomic uncertainty, post-Brexit transitions, and the lasting impact of the pandemic. A report from the Financial Services Skills Commission (FSSC) highlights how vacancies in critical areas—such as compliance, technology, and risk management—were cut as firms consolidated resources. Many boards, apprehensive about the volatile economy, delayed or froze hiring budgets, further exacerbating talent shortages.
Additionally, the lack of investment in workforce development has widened significant skills gaps. KPMG’s analysis of the financial sector notes that the inability to attract top-tier talent, particularly in areas like IT, cybersecurity, and regulatory compliance, has become a serious business risk. The UK Department for Business and Trade echoes this concern, emphasising the urgency of reskilling and attracting professionals with expertise in finance and technology to maintain competitiveness in the global market.
Hiring and Recruitment Trends (2022-2024)
To understand the upcoming hiring surge, it is essential to review the significant decline in job vacancies and recruitment budgets across the financial services sector. The following table illustrates a 35% drop in vacancies and a reduction in recruitment spending from ￡3.0 billion in early 2022 to a projected ￡1.9 billion by Q3 2024:
Year and Quarter Vacancy Drop Recruitment Spend (￡ billion)
2022 Q1 0% ￡3.0 billion
2022 Q3 -10% ￡2.8 billion
2023 Q1 -18% ￡2.5 billion
2023 Q3 -25% ￡2.2 billion
2024 Q1 (Projected) -30% ￡2.0 billion
2024 Q3 (Projected) -35% ￡1.9 billion
This period of cost-cutting reflects a broader trend where firms have relied on existing workforces to cover critical projects. While this has helped navigate economic challenges, it has also compounded skills shortages, resulting in operational inefficiencies. Now, with backlogs mounting and regulatory pressures intensifying, firms are preparing for a significant hiring resurgence.
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LinkedIn Vacancy Data
Data from LinkedIn shows that job postings within the financial services sector dropped by over 30% in the last 18 months, particularly in key areas like compliance, risk management, and IT. This aligns with broader market trends, as firms delayed hiring amidst budget freezes and regulatory uncertainties. However, as demand for talent rebounds, the stage is set for an aggressive hiring uptick.
Drivers of the Upcoming Hiring Surge
The Risks of Failing to Adapt Hiring Strategies
Firms that fail to modernise their hiring strategies face mounting risks. As major consultancies like Deloitte and EY highlight, financial institutions must evolve their recruitment approaches to address the changing demands of the industry. Failure to do so will not only result in project delays but also increased inefficiencies and a greater likelihood of regulatory breaches.
London Business School stresses the importance of strategic workforce planning, advising firms to adopt a forward-looking approach that focuses on future-proofing their talent pool. By closing skills gaps, organisations can not only improve their project delivery but also position themselves for long-term growth and resilience in an increasingly competitive market.
Conclusion
The UK financial services sector is on the verge of a major hiring surge, driven by the need to catch up on delayed projects, comply with regulatory demands, and adapt to rapid technological change. Over the next 12-18 months, there will be intense competition for talent, particularly in compliance, digital, and operational roles. Firms that fail to modernise their hiring strategies and invest in the right talent will face significant operational, regulatory, and reputational risks.
If you would like assistance in ensuring your resourcing strategy is ready for the upcoming uptick in demand or addressing your current recruitment challenges, please feel free to reach out to me directly at [email protected]
Our team is well-equipped to support you in navigating the shifting landscape and securing the talent needed to keep your organisation competitive.
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Excellent article. Very true. We are seeing this more and more. The true challenge here is to recruit the correct resources and be in a position to keep them. We are finding that the most challenging part of the upswing.
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1 个月One of the things that will help is if you educate yourselves on IR35 rather than believing blanket Bans of PSCs de-risk you. It is actually more of a risk to ban PSCs outright than it is to properly scope out works, agree a SoW & assess the Contractor through something other than CES. Until the financial services sector addresses this you are simply waiting for the Day the money runs out and HMRC come for you.. and they will come, it's a matter of time.
Complaints and Remediation Specialist
2 个月Having only landed in the UK in August it’s certainly been a very interesting experience so far in comparison to recruitment within Australia.
Chief Delivery Officer | Global Head of Delivery | Transformation Programme Director | Portfolio Programme Director | Leadership | Operations | Customer Engagement | Strategist | Thought Leader & Advisor
2 个月Organisations have been sweating their existing assets for a long time now c.2 plus years and they cant keep on doing so. As Simon Long states their will also be Risk & Compliance needs that need s to be fulfilled but I would also suggest organisations have also been slow to look at and do any major shifts in their product offerings and or services! The market has been suppressed for so long it would be nice to see the change
Fixing the talent puzzle one piece at a time...
2 个月Thank you and great post Daniel Bloom . Godfrey W. Mulondo you may find this interesting given your relationship with the Financial Times and CIMA. I’m sure Daniel Bloom would be keen to hear your thoughts on this.