financial & professional services in greater manchester overview of skills

financial & professional services in greater manchester overview of skills

1. INTRODUCTION The briefing summarises the findings of primary and secondary research in respect of the skills and training priorities for Greater Manchester s financial and professional services (FPS) sector. The intention is for the information and data in each sector summary to be used by employers and skills and training providers to inform the development of new strategies and approaches to skills and training. 2. INSIGHTS AND RECOMMENDATIONS Manchester has the biggest Financial and Professional Services (FPS) sector outside London with particular strengths in relation to legal, accountancy, back office administration and real estate activities; FPS constitutes one of the largest sectors in Greater Manchester by employment and numbers of businesses. The sector is expected to create 45,000 jobs to 2022 (about half of all new jobs across the conurbation), including roles in the traditional professions (legal, accountancy etc), as well as significant numbers of jobs in office administration and support; Greater Manchester needs to up-skill its prospective FPS workforce. Forecasting suggests the vast majority of new skills needed will be at level 4, but there is also relatively strong growth forecast at levels 2 and 3; Although larger numbers of learners are pursuing FPS-relevant courses at higher skill levels, relatively few are starting at level 4. For example, in 2011/12, over 60% of provision was at level 2; the most recent figures from the Skills Funding Agency (SFA), however, show that in 2012/13, 53% of the starts were at levels 3 and above (but just 2% at level4). Approximately, 22,300 adults started an SFA funded course related to the sector; High levels of regulation within the sector mean that in-house training is extremely common a majority of businesses within the sector feel that training providers are responding to their needs; and FPS firms are very positive about the value of apprenticeships but reducing the bureaucracy associated with apprenticeships remains important. 3. PROFILE OF THE GREATER MANCHESTER FINANCIAL AND PROFESSIONAL SERVICES SECTOR Greater Manchester s FPS sector comprises 17,000 firms; Some 80% of businesses in the FPS sector employ between 1-9 people; A total of 235,000 people work in FPS across Greater Manchester - (21% of total employment) heavily concentrated in Manchester (35% of all employment; 67,000 employees), followed by smaller concentrations in Trafford Park, around the Airport, and close to the town centres of Bolton and Bury; The legal and accountancy sub-sector is an important employer within the conurbation; and The FPS sector in Greater Manchester has been relatively resilient to the recession, with local sector employment contracting by 2.6% compared to 6.2% nationwide. Although the sector as a whole is diverse, key sub-sectors are back office administration, lawyers and solicitors, estate agents and accountancy firms:

Table 1: Number of FPS sector businesses in Greater Manchester by sub-sector, 2012 FPS SUB-SECTOR No OF BUSINESSES IN Greater Manchester % SECTOR Office administrative, office support and other business support activities 6,946 40% Legal and accounting activities 2,120 12% Real estate activities 1,823 10% Activities of head offices; management consultancy activities 1,533 9% Services to buildings and landscape activities 1,160 7% Financial service activities, except insurance and pension funding 888 5% Activities of membership organisations 775 4% Activities auxiliary to financial services and insurance activities 705 4% Employment activities 652 4% Rental and leasing activities 505 3% Security and investigation activities 238 1% Insurance, reinsurance and pension funding, except compulsory social security 89 1% Translation and interpretation activities 4 - Activities of extraterritorial organisations and bodies 3 - total 17,441 100% Source: IDBR, 2012 Figure 1: Greater Manchester FPS sector employees by locality, 2011

4.DEMAND FOR SKILLS FROM THE FINANCIAL AND PROFESSIONAL SERVICES SECTOR Some 97% of the FPS companies surveyed said that they carried out in-house training, which compares to the all-sector figure of 85%; This training covers industry specific, regulatory (such as health and safety and legislation), IT and technical skills and soft skills such as communication; National evidence indicates that the take-up of vocational qualifications is relatively low compared with the economy as a whole. Employers appear to be reluctant to use vocational qualifications because they do not see a good fit between these and the sector s skill needs; A total of 81% of FPS companies felt that the current supply of recruits met their business needs - higher than the all-sector rate of 77%; Forecast growth in the FPS sector indicates that the great majority of jobs in FPS will require level 4 skills by 2022; however, there will be significant numbers of jobs at other levels (approximately 50,000 at levels 2 and 3 respectively, and approximately 12,000 at level 1. There is a concern in the FPS sector that Greater Manchester lacks professionals with the necessary expertise in some specific areas; in the case of the insurance and real estate/surveying sub-sectors, this was because London was seen as the national focus for these activities. However, skills shortages within Greater Manchester s FPS are unexceptional (26% of companies highlight them); FPS firms are very positive about the value of apprenticeships 89% of businesses see apprenticeships as suited to the sector compared to 84% of businesses across all sectors but those with knowledge of the sector note that increased regulation may scare firms away from taking on an apprentice; Regarding young people working in the sector, there is a perception that they lack general workappropriate skills (e.g. poor motivation and work ethic, alongside poor standards of English and Maths). Linked to this point is the view from learning providers that learners are often not prepared for the hard work needed to complete their apprenticeships, with professional qualifications and exams running alongside the competency components; and FPS firms feel their skills needs are heavily affected by technological change 66% said this had a big impact on them but providers observed regulatory change, and the need this creates in terms of professionalising back office support, was often the trigger for learning. The sector s demand for skills is oriented towards highly skilled and qualified people in managerial, professional, and associate professional occupations who have typically been educated to first degree level or above. However, the sector also needs administrative, sales and customer service workers qualified to Level 3. Fundamental to the sector is the flow of professional qualifications related to accountancy, law, financial services (such as Financial Service Authority licenses) and surveying. But the sector wants candidates to possess broader interpersonal skills than simply the mandatory professional licenses and qualifications. 5.THE SUPPLY OF SKILLS TO THE SECTOR A total of 10% of all 16-19 students (26,600) in Greater Manchester study an FPS relevant course; The number of starters within FPS courses has been increasing year on year, with an estimated percentage increase since 2007 of 9%, but this is lower than the rate across all subjects (+13%); In 2012/13, 22,300 adults over 19 in Greater Manchester started FPS courses. Over half (53%) of the starts were at level 3 and 4 considerably higher compared to the all sectors figure of 21%, and just under a third at level 2 (30%); Of the 28,000 apprenticeship starts in Greater Manchester in 2012/13, 4,000 (14%) were broadly related to the FPS sector; A majority (57%) of these starts are at level 2; One third of Greater Manchester s university students are studying FPS relevant courses; The 2010/11 Higher Education Statistics Agency (HESA) Destination Leaver Survey found that of over 14,000 Greater Manchester Higher Education graduates, 26% (c. 3,500) were working in areas related to the FPS sector six months later; Some 78% of the FPS companies surveyed said that they felt engaged with training and learning providers. This compares to 79% across all nine sectors covered by the survey; 1 Sector Skills Insights : Financial and Business Services, available here: http://www.ukces.org.uk/publications/er56-sector-skills-insights-professional-business

A lower proportion of FPS firms (64%) felt training providers gave sufficient support to help them grow than in other sectors (70%); Some 82% of FPS sector companies surveyed said that training providers were able to respond to their business skills needs. However, employers would still welcome closer relationships with and better communication from training providers; Providers within the sector report that little information seems to be known/ offered about the variety of career choices available in the sector; and Sector stakeholders note that many Small and Medium-Sized Enterprises (SME s) (in all parts of the economy) outsource FPS back office activities such as the production of accounts. Among learning providers, regulatory issues are felt to be an important driver of change in how they respond to the sector s need for skilled staff. For example, changes to mortgage and financial advice legislation bring about different demands for qualifications in particular the need for higher level qualifications. In insurance, employers usually want to get their staff qualified to Cert CII level now which is increasing demand for Advanced Apprenticeships 6. ISSUES AND CHALLENGES The sector in Greater Manchester is forecast to expand by 17% over the next decade to 2022 the equivalent of approximately 45,000 additional jobs which represents the single largest contribution of new jobs of any economic sector. In addition to this growth, the sector will also face the usual challenge of replacing those workers who retire, move or change career. The FPS sector has a particular orientation towards graduate and post-graduate skills and demand at level 4 is expected to grow fastest. As well as level 4, there is evidence pointing to skills being needed at other levels, especially level 3. However, existing provision does not appear ready to meet this demand: most starts are currently at level 2; Broader challenges to the sector include increased regulation, brought in to restore confidence in the wake of the financial crisis, global competition (for example, competing successfully in growing markets in Asia and elsewhere in the world) and technological change, aiming to develop new products and modes of service delivery to meet the requirements of more demanding customers and to provide more efficient services.