By Betsy Williamson, Managing Director of leading Edinburgh financial services recruitment firm, Core Asset
WHILE 2020 brought the pandemic to all of our doors, 2021 saw continued uncertainty, bringing huge challenges across professional and financial services.
Staffing crises are impacting multiple sectors, with whole industries bereft of workers and facing massive skills gaps, while others can’t hire fast enough.
What’s for certain, is that the economic toll of the pandemic and its ripple effects will be felt for generations.
But was 2021 all doom and gloom? Or can we now draw breath and as we fly through the first weeks of 2022, can we take forward key learnings and grounds for optimism?
Resilience in the face of a recruitment crisis
Overall, the Financial Services, Asset Management and Professional Services industries have remained broadly resilient, despite the most extreme market conditions in living memory.
The European Supervisory Authority’s first risk assessment report of 2021 recognised that the financial sector has so far proved financially resilient, but notes that “the longer the pandemic continues, the more likely it is that there will be spill-over effects from the real economy”.
According to the REC (Recruitment and Employment Confederation) and KPMG who have recently conducted a survey of more than 400 recruitment firms. There has been a sharp rise in hiring demand across multiple sectors. Recruitment firms are reporting hiring challenges in Public Services, Health Care, Transport, Logistics, Hospitality, Manufacturing and Construction.
This reduction in available labour is interconnected to the UK’s exit from the European Union and the exodus of overseas nationals returning to native soil. In reverse there is also the challenge of fewer EU workers travelling to Britain given COVID-19 border controls and the government’s new post-Brexit immigration points-based Visa programme.
The rush to reopen industries after many of the pandemic restrictions eased led to an upsurge in demand for workers in multiple areas. However, this was counterbalanced with a natural hesitance from people to move employers, with personal situations and work life balance being key considerations.
Why the “great resignation” is yet to materialise
Why the hesitation? First the fear that the goodwill agreed with current employers may not transfer. That the hard gained ground on flexible work isn’t up for negotiation. Secondary, the age-old adage of “first in, first out”. The risk to move job is simply too great.
For years we have been warning of twin strategic employment threats, (1) the low adoption of diversity and (2) the failure to embrace effective succession planning in critical business areas.
Regardless of size, progress with the adoption of policies to increase diversity seems glacial. COVID supercharged these issues, squeezing out many working women and re-winding diversity gains. Enforced working from home caused problems for some employees and parents which many are still struggling to balance two years later. Gender stereotyping seemed to be seeping into day-to-day life.
These pre-programmed stereotypes perpetuate inequalities and become harmful when they limit or provide a barrier to an individual’s ability to choose their own career path. For example, it was widely reported during the pandemic that female careers were negatively impacted with a disproportionate amount of childcare resting firmly on their shoulders.
Of course, Government policies are predominantly adhered too, and best practice has not fallen by the wayside. However, inevitably these critical business agendas run for a while, then get side-lined when more pressing business needs arise. Despite all the positive strides taken, post COVID we must do more to tackle racism and sexism, while it’s vital that we don’t lose sight of less highlighted causes such as class and background.
There is a suggested link that family status plays a significant role in educational, occupational and earnings attainment in later life. The UK is a highly unequal society with deepening income disparities and, thanks to COVID, heightened employment insecurity. If class differences can define levels of earnings and future career progression, then companies run the risk of putting polish before potential.
Greater diversity isn’t just the right thing to do, it makes business sense. It’s also about attracting the best talent. People want to work for progressive businesses with diverse workforces and flexible working practices. The leaders best equipped to meet tomorrow’s challenges are unlikely to share the same demographic configurations as todays.
In tandem to this, employers need to become more open minded to the concept of re-training and work-based transferable skills if the scales tipped by COVID and the UK’s Exit from the EU are to be re-balanced.
If there is healthy commitment from individuals to re-train, coupled with support from the employer, with a structured programme to follow, then success is achievable. A new career can be forged, all it takes is the opportunity. This means an open-minded approach to recruitment which can only truly be transformational if it is a commitment that is recognised and delivered strategically from senior leadership.
If companies are to look beyond education and experience when they recruit, then what should they focus on? Reliance, adaptability, tenacity, speed of response, ability to flex and capability to overcome personal challenges, experience of learning something new are all excellent starting points. To survive and flourish in the new age of work-force pandemic evolution and the flip to a candidate driven market business leaders may need to start thinking talent over experience.
The pandemic has also operated as a technological catalyst. Initial lockdown measures to manage the surge of infections resulted in a wholescale shift towards on-line working. The pace of change was unprecedented, years of technological evolution implemented in a matter of months as firms moved rapidly towards large-scale remote working.
The pandemic also provided added impetus to policymakers as regulators tuned into the emerging risks of the digital age and started to consider how to adjust regulation accordingly.
Sustainable investment is now the key issue discussed by regulators, industries, and investors around the world. There’s near-universal scientific agreement the speed of the current change in climate is manmade and that the long-term consequences are likely to be catastrophic. Meanwhile the demand for sustainable investment strategies and products continues to rise.
Responsibility for the climate lies with all of us, both individually and collectively. Ultimately the power to keep the tide turning at pace lies with the mammoth global Investors who have trillions of assets under management. These businesses are too big to let the planet fail.
Global asset managers are collectively invested in multiple asset classes, across numerous sectors and regions. A global failure would be catastrophic on investment portfolios. Environmental, Social and Governance Issues are no longer a box ticking exercise, all the links of the investment chain are expected to place green, renewable and climate-based topics at centre stage,
The assessment of these elements must act as an integral part of the investment selection process from portfolio managers to corporate business leaders at board level and below. All are expected to be accountable for the corporate footprint.
International policymakers are now squarely focused on the sustainability and selection of green based criteria and are seeking more data and more consistent reporting for investors and shareholders alike. Regulators are growing increasingly concerned about “greenwashing”.
Only with the dust now settled on 2021 can we appreciate the learnings and the positives from one of the most tumultuous years we’ll ever live through.
Here’s to 2022.