The impact of COVID-19 on financial services recruitment

finance meeting

It’s no surprise to anyone that the COVID-19 pandemic has impacted large swathes of the economy. We’ve been experiencing both a public health crisis and an economic one, which has kept the financial services sector hard at work.

Although we’re all hoping for a return to some kind of normality soon, as the pandemic recedes, no one expects things to go back to the way they were. Navigating these changes will be the next big challenge for recruiters across the country.

With unprecedented workloads and the Great Resignation in full swing, financial services recruitment is facing a tough time. Here are some of the most significant changes to watch.

How financial services recruitment has changed following COVID-19

Although the pandemic has impacted all industries, this impact has not been spread evenly across all sectors. Each sector will have had to make specific adaptations to successfully carry out its key priorities while reaching for the new normal.

Companies are looking for a broader range of skills

Although most companies have requested ‘soft’ skills such as teamwork and communication skills for over a decade, these have rarely been decisive in hiring decisions. Typically, recruiters paid little more than lip service to the importance of these skills.

With the rise in working from home and hybrid working, companies have been forced to view these as very real requirements, alongside the financial training and skills they already expected. 

Indeed, soft skills are increasingly more attractive than industry-specific knowledge and experience. Financial services firms are typically able to offer training to fulfil regulatory requirements and enable staff to work effectively within the industry. Still, few offer extensive communication skills or tech training.

The need for these soft skills has increased in many sectors, but it has been particularly noticeable in financial services. Around 78% of workers in the industry have continued working from home throughout the pandemic and have had to learn new skills to support that shift.

Increasingly, financial services sector recruiters are putting these skills front and centre and finding effective ways to evaluate and assess them. We predict that there may be a rise in online skills-based assessments as part of the recruitment process for many companies.

Workers are looking for more flexibility

In common with workers in many other sectors, applicants for financial services have adjusted their wishlist for their ideal job. As we’ve already mentioned, people working in financial services have been able to work effectively from home throughout the pandemic, and many see no benefit from returning to the office.

There is a lot of variation across the sector. Some companies are happy to facilitate full-time remote working whilst others insist on staff being back in the office as quickly as possible. 

Some companies attempt to find a happy medium, with hybrid working in various forms. This could range from staff spending one or two days in the office per week to having some entirely on-site while others are fully remote. Each of these approaches carries a different type of risk, and companies have to decide where their greatest potential lies. 

Only time will tell which is the most effective strategy. Still, nearly a quarter of UK workers were willing to leave their positions to achieve greater flexibility before the pandemic. Employers who are willing to offer at least some form of flexible or hybrid working arrangements may have a significant advantage attracting great talent.

Hiring has been on hold for some time — some expect a hiring boom

Along with other sectors, many companies within the financial services sector have delayed hiring decisions wherever they can. The uncertainty of the past few years has encouraged employers to concentrate on retraining or redeploying existing staff to fill essential roles.

This effect is especially pronounced for graduate positions and early-career staff. Unsurprisingly, these roles would be the first to be placed on hold during a difficult period.

Companies will likely feel these early-career candidates’ lack of focused training and work experience for many years. How companies adjust will impact recruitment within the financial services sector for the next five years or more.

As we move towards a less volatile future, companies must fill their vacant positions. This may lead to a shortage of qualified staff and many roles to choose from. Companies that begin their recruitment early and focus on attracting talent will have an advantage.

Other companies are continuing to cut jobs

Financial services were excluded from the trade agreement between the UK and the EU following Brexit. This challenge has been compounded by the effects of the pandemic, leading many firms to cut jobs overall. Other firms have moved roles, or even whole departments, to locations within the EU.

Whether these job cuts balance out the staff shortage other organisations are reporting isn’t yet clear. Those companies cutting staff will have to put even more effort into retaining their highly-trained, effective staff.

Fraud is a central concern

Obviously, the financial services sector has always considered combating fraud a high priority, but COVID-19 has taken this to a new level.

With so much at stake and little time to prepare, the range of COVID financial support schemes for companies, workers, and the self-employed have been enacted without many of the usual checks and balances to minimise fraudulent claims.

The potential for fraud within the financial services sector and the need for high-quality candidates to help combat it have led many companies to increase their recruitment and focus on a specific skill set. Candidates who can demonstrate outstanding attention to detail without losing processing speed and productivity can command premium rates.

Security concerns have become more complicated

The increased concerns around security within the financial services sector aren’t limited to combating fraud. In fact, the whole security picture within the industry becomes significantly more complicated when staff are working from home. 

Companies have to devise new security procedures, develop new training requirements, and find innovative ways to evaluate candidates. While these may represent an additional burden, it is an opportune moment to reassess security processes that might be outdated.

For companies who didn’t have security procedures for home-working, the speedy adaptation to the changing environment presents a significant risk. As we reach a new normal, companies will need to re-evaluate these processes to reflect best practices in the future.

We have experienced greater industry-wide collaboration

The pandemic has presented an enormous challenge to many sectors, but it has been an opportunity for large-scale fraudsters. 

As the scale of this problem has become apparent, especially in the area of authorised push payment (APP) fraud, the industry has had to work together to work towards a solution. UK Finance has called for further collaboration and has published data on the scale of the problem. As different parts of the industry work together, recruiters should consider recruiting from other areas of financial services to help facilitate collaboration.

The skill gap has become more obvious

The financial services sector has traditionally offered low levels of training, even from some of the best-known companies and organisations. Staff may gain experience, but formal training and certification tend to be restricted to legal or regulatory requirements.

Unfortunately, this has led to a skills gap, with few workers demonstrating their expertise.

Until the pandemic, this skills gap was largely obscured. As more skills are required, the gap has widened. Companies that have had to retrain existing staff may begin to see the benefits of in-house training and staff development.

As we’ve already mentioned, the financial services industry is far from the only sector to have changed due to the chaos of the last few years. At crooton, we want to help you stay updated on all the changes and developments across the world of recruitment. You can read our blog to learn more about changes in the healthcare sector and digital marketing sector among others. 

If you’re looking to improve your recruitment strategy over the next year, especially if you’re hoping to take advantage of many of the opportunities presented as we come out of the pandemic, we’re here to help. Get in touch with a member of the crooton team today!