Financial sector hiring set to increase
A combination of strong domestic growth and optimism about the potential for further expansion have combined to make financial firms feel much more confident about their ability to make new hires over the coming months. Commercial companies and private individuals are also forecast a rise in activity, although there are some areas in which capital investment plans have had to be scaled back in order to avoid exceeding budgetary constraints.
However, data supplied by the Office of National Statistics has shown that there has been a downturn in productivity in the financial services, particularly since the much-publicised banking crisis. With banks, building societies, life insurers and insurance brokers all following this trend, some have been concerned about this drop-off, but it appears that this is largely due to an increase in what is described as ‘non-productive’ work across the sector. This includes activities such as ensuring compliance and maintaining regulatory standards, which has become an increasingly important focus in the wake of the banking crisis.
Despite this, optimism about the state of business has been rising solidly over the last quarter, with overall business volumes expanding at an above-average pace. Profitability has also improved at the fastest pace since March 2011, despite a rise in operating costs. Employment is also on the increase with banking enjoying a more stable headcount compared to the last preceding two quarters.
Although the output per employee is thought to have fallen or at least grown more slowly in the financial services industry since the crisis, there are signs that forms expect to continue to grow. This might be in order to ensure that the additional capacity required to ensure regulatory compliance is met without having to sacrifice overall productivity. In the coming months, 67 per cent of finance firms are expecting to increase growth through cross-selling to existing customers, whereas 79 per cent believed that they would be acquiring additional customers, demonstrating a level of confidence that will be welcome to any contractors hoping to find work in the sector.
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