By Craig Potter
Apprenticeships have an important role to play in the talent pipeline of financial services. Research commissioned by Davies reveals the many benefits of apprenticeships for businesses, yet only just over half of FS companies have a scheme in place. With renewed support for apprenticeships from government, it’s an opportunity to promote the value of apprenticeships in attracting the new talent that the sector needs.
Apprenticeships have long served as an alternative route into employment, opening up opportunities to those who might not have had access to higher education or who want a career change. As societal expectations and perceptions have evolved, we’ve moved away from the idea of there being one “better” route to career success. As a result, apprenticeships have become increasingly popular. In fact, over the 2022-2023 period, apprenticeship statistics for England showed there were over 736,000 people actively completing apprenticeships.
This is particularly important for the financial services sector, which is facing a number of talent challenges.
We know from government figures that the financial services (FS) sector has an older workforce than many other industries. In fact, around one in six (18.1%) workers aged 50 to 64 years are employed in the banking and finance sector and, over the coming decade or so, the sector will lose a sizeable portion of its talent to retirement.
Unfortunately, new talent is not coming through fast enough, or in great enough volumes to fuel the pipeline. In fact, some reports highlight that FS workers are exploring other opportunities; one survey found that almost three quarters (71%) of financial professionals in the UK are looking for a new job outside of the profession.
The result is that the industry is facing a void of young talent, which is likely to become bigger over the coming years.
Apprenticeships, therefore, are an important tool as we try to find solutions to this problem. They can kickstart careers, develop talent to progress onto the next level and help businesses to plug skills gaps and grow quickly.
The positive impact of apprenticeships is clear to see in the results of research Davies conducted in 2024. 504 full-time employees survey respondents from UK FS firms were asked about their organisation’s approach to apprenticeships.
The findings highlight several long-term benefits of apprenticeships:
Building loyalty: Of those companies that have an apprenticeships scheme, 73% said that permanent roles are typically offered to people who take part in the scheme.
85% of respondents stated that apprenticeship schemes help build employee loyalty and 78% said that apprenticeships often lead to participants having long-term careers with their company.
Diverse talent: Further, 87% stated their schemes aim to create pathways for diverse talent, enabling a wider range of people to build careers in FS.
Cost effective: 71% said that having an apprenticeship scheme is more cost-effective when bringing new staff into their organisation compared to recruiting graduates or junior staff. And of course, if staff retention is improved then recruitment costs are reduced.
The future of apprenticeships
However, there is still work to be done in communicating these benefits more widely. Our findings show that just over half (57%) of the FS organisations surveyed have an apprenticeships scheme in place. Of those organisations without an apprenticeship scheme, 15% of respondents said they do not know how to take advantage of the Apprenticeship Levy, 11% do not know how to establish an apprenticeship scheme, while a fifth (19%) said they do not see the value in running a scheme.
Apprenticeships offer a great opportunity for businesses to attract new talent, spark passion about the industry and bring diverse perspectives, so it’s important that we get that message across so that more individuals, organisations, and the sector as a whole can benefit. Indeed, promoting the benefits of apprenticeships is particularly timely at the moment, as the government indicated clear renewed support for them in the 2024 Autumn budget. It recognises the value of apprenticeships to the economy and has pledged to support them through targeted industry and wage adjustments.
The promises the government has made with regards to apprenticeships also show an acknowledgement of the youth guarantee they’ve previously spoke on. This is a promise of education, training, and support for every young person in every part of the country, and apprenticeships certainly can help with this.
One of these promises is to shorten the length of certain apprenticeship programmes. The cut in duration of certain apprenticeship length times incentivises younger people to undertake these learning programmes, while still giving them the rich experience and value they need. Another policy change involves replacing the current Apprenticeship Levy with a new Growth and Skills Levy and introducing foundation apprenticeships to provide young people with pathways into critical sectors. In addition, a recent announcement to offer more flexibility on the qualifications adults need to start an apprenticeship, signify a commitment to make the scheme more inclusive.
As a new body, all eyes are now on Skills England to deliver a long-term, joined-up strategy for apprenticeships across the country, with flexible funding, reduced bureaucracy and continued engagement with employers.
With this strategy in development and renewed enthusiasm for apprenticeships across government and business, we have a golden opportunity to shine a light on the wonderful benefits they can bring to the financial services sector and the generation of new talent we desperately need.
About the Author
Craig Potter has worked in the Skills and Professional Education sector for over 15 years, working in Senior Leadership roles in FE Colleges, awarding organisations, and independent training providers.? He has led Davies’ Professional Education offering for over 7 years and is a member of the Chartered Insurance Institute Education & Learning Committee and the Insurance Institute of London Student Engagement Committee.
#Importance #Apprenticeships #Financial #Services #Growing #Future #Talent