The sector is also important and central to the economy. Financial Services has been identified by the government as one of the eight growth driving sectors in its own right alongside professional and business services.
The industrial Strategy sets out the importance of financial services with 1.2 million people employed in the sector and outlining that ‘the financial services sector is one of the UK’s largest and most productive, worth around 9% of total economic output. The sector is also an enabler of growth across the whole economy. People and businesses rely on the sector every day, from providing mortgages to managing their pensions, to raising capital and securing lending… The UK’s status as a global financial sector cannot be taken for granted, and international competition continues to accelerate.’
The Industrial Strategy sets out plans to develop a sector skills compact through the Financial Services Skills Commission, including the commissioning of a report on the AI skills needed to drive growth and productivity in UK Financial Services.
Skills England outline in their Sector Skills Assessment for Financial Services that the sector has grown by 8% in the last 10 years and the fact that jobs have become more highly skilled with the adoption of innovative technologies and new working practices. The Employer Survey in 2022 highlighted that 24% of vacancies were hard to fill and in areas such as operational roles needed and complex analytical skills. AI and cyber security are particular areas of need highlighted by employers. Skills England notes that cloud developers and DevOps engineers ‘are now critical for modernising banking infrastructure.’ According to Skills England, employers have fed back that ‘education and training pipelines are failing to produce the qualified professionals to meet the demand. Recruiting for these key technical skills is further complicated by the need for candidates who also have a good contextual and regulatory understanding’.
Most employees in the sector have graduate level education or higher, with 52% of the workforce qualified to at least degree level. 83% have at least a level 3 qualification. These are in areas such as business and management, mathematical sciences, computing and economics. Apprenticeships are a route into the sector, with options including insurance practitioner and data analysis. Employers fed back that apprenticeships are too slow to adapt to the changes in skills needs within industry. They have also called for expanded levy use for ‘short and modular, targeted training aligned with industry certifications, particularly in AI, data analytics, and cybersecurity’.
The Industrial Strategy also highlights the importance of the professional and business services sector, identifying the UK as a global leader. The Sector plan sets out the ambition for 2035 for the UK to be the most trusted adviser to global industry, with the most dynamic and productive PBS sector. The Sector Plan notes the key impact of technology on the sector and the importance of developing a skilled workforce ‘particularly in the specialist skills in digital, climate transition, and cybersecurity required to seize new opportunities, and create high-quality, well-paid jobs across the UK.’
Interventions set out in the Sector Plan include the delivery of ‘apprenticeships and skills training that recognises the particular needs of the PBS Sector’. There is also a commitment to short courses, through the Growth and skills levy in areas such as digital, artificial intelligence and engineering. The plan also sets out to facilitate collaboration between large employers in the sector, higher education institutions and universities to fully integrate the skills system and align with sector needs. Additionally, from January 2026, Level 7 apprenticeships will remain funded by the Growth and Skills Levy for new starters aged 16 to 21. The plan also sets out the employer led approach and their role in co-designing skills solutions with LSIP being a key part of the local approach in this regard. There is also a commitment to improving social mobility in the sector.
Skills England outline in their Sector Skills Assessment for professional and business services the importance of the sector, outlining that it is an enabler of growth across the economy, helping businesses to raise finance, scale up, export and invest. The sector accounts for over 12% of UK GVA and hires 20% of graduates and 13% of apprentices in England’. The report also sets out that ‘in June 2024, there were 5 million jobs in the PBS sector, accounting for 14% of all jobs in the UK. This has increased by 16% (700,000) over the last decade.’ The sector is set to see a growth of 570,000 to 2035 ‘driven by a large rise of 430,000 highly skilled professional and managerial roles, while the number of administrative jobs is set to decline by 60,000.’ 2.4 million workers are also forecast to leave the sector in the same period so up to 3 million new employers may be needed to 2035.
The Skills Assessment also highlights the significant impact of automation – ‘recent research published by the Professional and Business Services Council (PBSC) highlighted that the PBS sector is projected to be the most automation-disrupted sector in the UK, and that automation in PBS firms will create the opportunity for up to 584,000 new jobs to be created by 2040.’ This will change the roles and opportunities on offer, with some administrative roles disappearing but with a net gain of roles in areas such as robotics, artificial intelligence and machine learning. There is a high concentration of of jobs in the south east (including Essex) with 40% of all jobs nationally based in London and the south east.
As with financial services, the sector is highly skilled with 58% qualified to degree level or above and 84% with a level 3. There were over 40,000 apprenticeship starts in the sector in 2021/22 with accountancy the largest group of apprenticeship standards. The Skills assessment highlights that legal, business administration, data analyst, and digital marketer apprenticeships are also all well used. Employers have fed back that apprenticeships are highly valued and help with retention and growing talent as well as increasing diversity in parts of the sector that have traditionally been seen as elitist. Employers have also fed back that shorter, more flexible courses would be helpful in areas such as data, digital and AI.
