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           The Employability Skills Challenge:
              Research from the Financial Services and Education Sectors

                                                              June 2010
Contents                                                             Executive Summary
Executive Summary                                               2    This report is the result of research into employability skills issues conducted by Scottish Investment
                                                                     Operations (SIO) and the Financial Services Skills Council (FSSC) 1 in response to feedback from
Introduction                                                    4    employers and formal research from the FSSC, The Skills Bill 2 .

  Authors                                                       4    SIO and the FSSC carried out research in two key stages from September 2009 to May 2010. Stage one
  Rationale                                                          covered employers and recruitment agencies who were interviewed in group and one-to-one settings to
  Purpose of Research                                           5    establish the key issues they faced in recruiting new talent to the financial services sector. Employers
  Employability Defined                                         5    were almost all global organisations responsible for thousands of employees and making a substantial
                                                                     contribution to Scotland’s economic output 3 .
Methodology                                                     6
                                                                     The second stage of research covered the education sector with                      The key findings from
  Employers and Recruitment Agencies                            6    views taken from a sample of schools and universities across                        employers and agencies
  Sector Coverage                                               6    Scotland in focus group settings to understand their perceptions
                                                                                                                                                         highlighted issues with
  Employer and Agency Involvement                               6    of the financial services sector and its skills requirements. The
                                                                                                                                                         the attitudes and
                                                                     groups of pupils and students were drawn from a broad range
  Participating Employers and Recruitment Agencies              6                                                                                        behaviours of prospective
                                                                     of disciplines and interests. Universities included traditional and
  Participating Schools                                         7                                                                                        candidates. The research
                                                                     new universities. Schools were all secondary schools in a range
  Participating Universities                                    7    of geographical locations.                                                          also shows that there
Findings                                                                                                                                                 were significant concerns
                                                                     The key findings from employers and agencies highlighted issues
                                                                                                                                                         with the level of numeracy
  Financial Services Employers                                  8    with the attitudes and behaviours of prospective candidates. The
                                                                                                                                                         and communication skills
                                                                     research also shows that there were significant concerns with the
  Main Issues                                                   8                                                                                        within the talent pool.
                                                                     level of numeracy and communication skills within the talent pool.
  Other Issues                                                  9
  Recruitment Agencies                                          10   Attitudinal issues focused on the lack of commitment shown at entry level and the generally poor
  The Impact of the Issues to Business                          11   attitude of candidates to the working environment. Employers cited many examples often from
                                                                     interview stage where candidates failed to display a sense of urgency, respect, professionalism and
  Schools and Universities                                      13
                                                                     commitment. Candidates failed to attend interviews, often without explanation or prior notice. They
  The Extent of the Employability Problem & Key Target Groups   14
                                                                     often worked to minimum standards arriving as late as possible to start and leaving as soon as possible
Solutions                                                       15   at the end of the day. Little attention was given to team goals and the impact of low productivity on the
                                                                     wider team and department. Employers concluded that candidates exhibited a poor level of
  Employers                                                     15   commitment and willingness to go above and beyond. Graduates in particular had a tendency to expect
  Recruitment Agencies                                          17   rapid promotion having failed to prove their worth or add value to the company.
  Schools                                                       19
                                                                     Skills issues centred upon communication skills, both verbal and written, and numeracy. Candidates
  Universities                                                  20   regularly did not articulate themselves well and could not be relied upon to communicate with
Next Steps                                                      21   customers and colleagues effectively without additional training to meet the gap. Written
                                                                     communication skills also featured heavily with employers advising that candidates’ letters showed
Contact Details                                                 22   signs of poor grammar, sentence construction and spelling errors.

                                                                     Although no statistics were available on the extent of these issues, employers and recruitment agencies
                                                                     all felt that they had deteriorated over time. The impact of these issues to businesses included extra
                                                                     training and checking, poor customer experience, poor perception of company and brand and a
                                                                     potential loss of new business.

                                                                     1 www.sio.org.uk, www.fssc.org.uk
                                                                     2 FSSC Skills Bill publications: http://www.fssc.org.uk/403_17.html?i=4
                                                                     3 Scottish Financial Services Strategy Annual Report 2009: www.scotland.gov.uk/Resource/Doc/273628/0081786.pdf

    Findings from schools and universities highlighted a mainly negative perception of careers in financial
    services. Many felt that the work would be boring, desk-bound and repetitive. High levels of stress and
    a poor work life balance were also frequently mentioned. It was also clear that the image of the
    industry had been impacted by the banking crisis with many commenting on a perceived lack of trust         Authors
    and ethics within the industry.                                                                            Alan Thornburrow, Chief Executive of Scottish Investment Operations and Linda Houston, Relationship
                                                                                                               Manager Scotland at the Financial Services Skills Council co-managed the project with the backing of
    In skills terms, pupils and students tended to point towards the importance of qualifications, the grade   Skills Development Scotland who provided funding for administration and secretarial support.
    of attainment and work experience when asked what skills and qualities were of most value to
    employers. Research indicated that a small proportion of students and pupils were aware of the             Scottish Investment Operations (SIO) is a professional body representing investment companies in
    employability skills needs of employers and how their own experiences of school and university were        Scotland. It works with its member fund management companies and investment banks to support
    relevant. This proved to be the exception rather than the rule however as most students and pupils felt    and advise them on talent and skills. A key deliverable of SIO is to ensure an ongoing pipeline of highly
    under-prepared to enter the world of work.                                                                 skilled new talent is available for its members. SIO is privately funded by its member companies.

    During each stage of this research potential solutions were gathered, a summary of which has been          The Financial Services Skills Council (FSSC) is a strategic, independent, employer-led organisation
    presented at the end of this document. The next stage of this work is to further develop these ideas in    which aims to enhance professionalism and talent for finance, accountancy and financial services
    conjunction with any current practice which will help to make a difference.                                across the nations and regions of the UK. It acts as a link between industry, government and education.
                                                                                                               In Scotland the FSSC operates within the Financial Services Skills Gateway which aims to take
    It is vital that we can continue to draw upon the best talent available if the long term viability and     Scotland’s financial services talent to world class levels.
    growth of the sector in Scotland is to be maintained.
                                                                                                               SIO and the FSSC embarked upon research into employability skills with the financial services sector
                                                                                                               and recruitment companies specialising in the sector following demand from employers to address the
                                                                                                               ongoing issues they face in recruiting and retaining new talent. The need was also evident from the
                                                                                                               FSSC’s research into skills provision in Scotland; The Skills Bill,
                                                                                                               a central theme of which is that employers in Scotland seek “more
                                                                                                                                                                                         It is vital that we can
                                                                                                               and better skilled staff at entry level”. Employers frequently cite
                                                                                                                                                                                         continue to draw
                                                                                                               employability skills as one of the main barriers in recruiting and
                                                                                                               retaining new staff. The main issues centre upon the ability of new       upon the best talent
                                                                                                               hires to fit into the workplace and make a meaningful contribution        available, if the long
                                                                                                               to their role, team and company.                                          term viability and
                                                                                                                                                                                           growth of the sector
                                                                                                               Financial services is a mobile sector operating and competing in             in Scotland is to be
                                                                                                               a global environment. Employers in the sector continually reassess
                                                                                                               their operations and move functions to the locations that enable
                                                                                                               them to complete tasks with a high degree of accuracy and service
                                                                                                               within a competitive cost framework. Globalisation has been a major trend within the sector during the
                                                                                                               past decade and Scotland has benefited from this by attracting new investors such as Morgan Stanley,
                                                                                                               Citi and many other global companies who transfer work to this country. A key determinant in doing so
                                                                                                               has been the availability of a qualified workforce within talent pools at school, college, university and
                                                                                                               other economic sectors. It is vital that we can continue to draw upon the best talent available if the long
                                                                                                               term viability and growth of the sector in Scotland is to be maintained.

                                                                                                               SIO and FSSC agreed early in the project that the views of school pupils and university students also be
                                                                                                               included to provide a balanced report and ensure a voice was given to the sector in this important piece
                                                                                                               of work.

3                                                                                                                                                                                                                            4
    Purpose of the research                                                                                      Methodology
    For the two strands of research there were two separate purposes:
                                                                                                                 Employers and Recruitment Agencies
    1. For the employers and recruitment agencies the purpose of the research was to:
                                                                                                                 Employers and agencies from all sub-sectors of the financial services sector were interviewed in
            • Identify the work ready skills, behaviours and attitudes currently lacking in the talent pool      groups and one-on-one between September and December 2009. The physical location of employers
              and prioritise the three most important employability issues that are lacking in applicants        was in Scotland however most businesses were global companies headquartered in Scotland or
            • Identify the impact of these issues on financial services employers and the industry               international businesses with operations here. The study focused on large employers in Scotland who
              in Scotland                                                                                        comprise the bulk of employment in this sector, although smaller employers were included. Individual
            • Gather ideas on how the issues could be addressed, both by the industry and out with               participants were senior recruitment and training professionals who represented a firm-wide view of
              the industry                                                                                       the issues. They were able to articulate the thoughts of business units across their organisations and
    2. For the university students and school pupils the purpose of the research was to obtain their views on:   all had direct experience of the issues under debate.
            • A career in financial services
            • Their perceptions of working in financial services                                                 Sector Coverage
            • What’s important to them when deciding on a career                                                 The sub-sectors included in the study were banking, investment, insurance and intermediary. Within
            • What they think financial services employers are looking for from new entrants                     banking we included organisations engaged in retail and corporate banking. Within investment we
            • How prepared they are for the world of work                                                        included wealth management companies, fund managers, investment banks and other specialists
            • Suggestions to improve skills in the areas sought by financial services employers                  providing support to the wholesale investment market such as custodians or trustees. Within insurance
    By canvassing the views from both sides of the talent pool we believed that this would provide a better      we included companies engaged in life and pensions and home, car and travel insurance. Within
    understanding of the issues and clearly identify opportunities for common solutions in both groups.          intermediary we included organisations engaged in the provision of advice or services to consumers.
                                                                                                                 Locations of employers included Edinburgh, Glasgow, Dundee, Perth and the travel to work areas
    Employability Defined                                                                                        around these cities where employers were also based.

    By employability we mean the ability to communicate,
                                                             Possessing the ability to communicate,              Employer and Agency Involvement
    manage information, use numbers, think and
    solve problems, demonstrate positive attitudes           manage information, use numbers,                    Prior to the workshops and meetings each employer was asked to complete an online questionnaire to
    and behaviours, be responsible, be adaptable,            think and solve problems, demonstrate               focus attention on the key issues. We then asked employers at the workshops and meetings to identify
    learn continuously, work safely, work with others        positive attitudes and behaviours, be               the issues that caused the greatest impact to their business and at which level it was most prevalent.
    and participate in projects and tasks. This is the       responsible, be adaptable, learn                    Participants then focused upon the three largest issues in terms of their impact to their organisations.
    definition we have articulated to employers within       continuously, work safely, work with                Businesses then took part in a debate on possible solutions. Agencies were interviewed one-to-one and
    the study and the definition that SIO and FSSC                                                               posed the same questions as employers had responded to in the group workshops.
                                                             others and participate in projects and
    work towards.
                                                             tasks are key.
                                                                                                                 The following report is the result of all employer and agency interactions.

                                                                                                                 Participating Employers and Recruitment Agencies
                                                                                                                 The 24 companies overleaf attended workshops or spoke with the report’s authors one-on-one.
                                                                                                                 4 recruitment agencies also participated.

5                                                                                                                                                                                                                           6
     Employer Name                                                             Primary Sub-Sector
     Abbey                                                                     Banking
     AEGON                                                                     Insurance
     Airdrie Savings Bank                                                      Banking                          Financial Services Employers
     Aviva                                                                     Insurance                        Main Issues                                                               Crucially, employers
     Baillie Gifford                                                           Investment                       The key findings of the research centred upon themes; poor
                                                                                                                                                                                          advised that the general
     BNY Mellon                                                                Investment                       attitudes and behaviours dominated across all locations as did the        work-readiness of new
     Barclays Wealth                                                           Investment                       lack of communication skills and numeracy. Employers identified           entrants had deteriorated
     BlackRock                                                                 Investment                       these issues repeatedly in different examples with many of the            over time.
     BNP Paribas Securities Services                                           Investment                       same examples being cited by differing employers. Employers
     Citi                                                                      Investment                       ranked the issues as being most prevalent in school leavers followed by graduates and to a lesser
     Clydesdale Bank                                                           Banking                          extent experienced hires. Crucially, employers advised that the general work-readiness of new entrants
     Cunningham Lindsey                                                        Insurance                        had deteriorated over time.
     Franklin Templeton Investments                                            Investment
     HSBC Securities Services                                                  Investment                       1. General Attitudes and Behaviours
     Ignis Asset Management                                                    Investment                       Employers highlighted three key areas where attitudes and behaviours fell short of expectations.
     Kwik Fit Insurance                                                        Insurance
                                                                                                                a. Work Ethic
     Lloyds TSB                                                                Banking
                                                                                                                Businesses cited examples of candidates failing to attend the first day of work, approaching their roles
     Mortgages PLC                                                             Intermediary
                                                                                                                with a poor attitude and generally exhibiting a low work ethic to their daily roles. New employees did
     Royal Bank of Scotland                                                    Banking
                                                                                                                not go above and beyond the minimum requirements of their role. They failed to work effectively within
     Scottish Friendly                                                         Insurance
                                                                                                                their teams, to share responsibility when needed and to work additional hours to satisfy the needs of
     Scottish Widows                                                           Insurance
                                                                                                                the business. They rarely volunteered to take on additional tasks and failed to recognise that such
     Standard Life                                                             Insurance
                                                                                                                behaviours had a positive impact upon their role, team, company and career progression.
     Standard Life Investments                                                 Investment
     Tesco Bank                                                                Banking                          A lack of understanding and experience of the culture and behaviours in the work environment was
     Change Recruitment Group                                                  Recruitment Agency               evident. This included inappropriate work dress, poor time keeping, poor attitude to work, lack of
     Hays                                                                      Recruitment Agency               respect for authority, not conducting themselves professionally, poor attendance at work, and a lack
     Hudson                                                                    Recruitment Agency               of flexibility on employer requirements. A ‘what’s in it for me culture’ rather than ‘what can I do to
     Joslin Rowe                                                               Recruitment Agency               help the company’ was mentioned in the employer focus groups.

                                                                                                                Poor attitudes and behaviours were also displayed when dealing with customers. They failed to
    Schools within a range of geographical areas were represented within the study. Pupils were selected        appreciate how to treat customers to provide a positive experience.
    at random by the schools from S5 and S6 to participate. In total we conducted 3 focus groups which          b. Mismatched Expectations
    gained opinions from 41 pupils.                                                                             Employers once again called upon a wide range of examples where candidates sought rapid
                                                                                                                progression having failed to prove their worth or add value to the company. There was a clear view that
    Universities throughout Scotland were also involved in this research. Students were selected by their
                                                                                                                the expectations set at university in particular were unrealistic. Students as a grouping had the highest
    careers service and represented a diverse range of degree disciplines such as accounting and finance,
                                                                                                                self belief in their own worth but, as was seen elsewhere in the study, they failed to contribute
    law, construction, project management and many more. In total we conducted 5 focus groups with
                                                                                                                effectively to their employer which hindered opportunities for career progression. Their attitudes were
    66 students.
                                                                                                                often displayed as “but I’m a graduate, I should be doing more than this…”. This attitude was not only
    Schools and universities were asked a series of open questions around their perceptions of the              unhelpful to the team dynamic but it was also felt that they failed to recognise the substantial increase
    financial services industry and what skills and competencies were important to employers. They were         in new graduates as a percentage of the workforce and the fact that their being a graduate no longer
    also asked for their views on what they would like to see more of in terms of links to the world of work.   held the advantage that it used to. Employers have come to see the value of a degree as much more
                                                                                                                of a commodity however, many stressed that school leavers were just as able as their graduate peers
    Participating Schools                             Participating Universities                                although it was felt that they lacked maturity at school level for a variety of roles within the industry.
    • Dalziel High School, Motherwell                 • Abertay University, Dundee
    • Kinross High School, Kinross                    • Dundee University, Dundee                               It should be noted that financial services employers were keen to provide as much progression as they
    • Trinity Academy, Edinburgh                      • Glasgow University, Glasgow                             could for the best candidates. They sought to provide an engaging experience for all recruits and were
                                                      • Glasgow Caledonian University, Glasgow                  quick to point out that they rewarded talent effectively and were able to provide additional responsibility,
                                                      • Heriot-Watt University, Edinburgh                       global opportunity and long term careers for the best and brightest. However this did not automatically
                                                      • Napier University, Edinburgh                            mean that all graduates earned promotion simply by virtue of having completed a degree programme.
7                                                                                                                                                                                                                              8
    c. Interview Skills                                                                                          6. Financial Services Sector Awareness
    Employers reported that candidates regularly presented for interview without having researched the           Although not an employability skill, it was clear that awareness of the sector and general commercial
    company properly or having understood its market or some of the challenges it might face.                    awareness was an issue that featured highly with Glasgow based employers. The companies who
    Competency based interviews are commonplace within the sector however the view from employers                raised it advised that new candidates had little knowledge of the company, its market, the financial
    was that candidates overwhelmingly failed to prepare adequately despite being briefed in advance that        services sector and general business practice.
    the interview would take this form. They were unable to provide relevant examples of their skills,
    experiences and general fit for roles. To a lesser extent employers advised that candidates did not          Recruitment agencies
    attend interview and failed to advise employers in advance.
                                                                                                                 The views from the participating recruitment agencies mirrored       Agencies notice a difference
                                                                                                                 the key findings from the employers; with the main employability     in attitude with ‘Generation Y’
    2. Communication Skills                                                                                      skills issues highlighted as being a‘poor work ethic and             candidates whose focus is
    When employers discussed communication it was found that verbal skills were lacking in new candidates        negative behaviours and attitudes’, including unrealistic
                                                                                                                                                                                      more about living for life
    which resulted in companies being hesitant to expose candidates to client facing duties until they had       graduate expectations of their current worth, a lack of strong
                                                                                                                                                                                      rather than work.
    developed staff in this area. The same was true of candidates working with more senior colleagues            communication skills, and lacking the ability to articulate
    within the local business unit and around the world. Employees are frequently working in global teams        themselves at interview or in CVs.
    and called upon to lead and contribute to team discussion with peers. The inability of new talent to do
    this upon joining resulted in additional cost implications for the companies. Written skills were also a     Two of the four agencies mentioned they provide support to candidates in securing employment such
    major factor with virtually all employers citing a lack of business English and poor letter writing skills   as revising CVs and coaching for interviews, particularly competency based interview techniques, as
    in their candidates. Poor use of grammar, structure and spelling were evident. Employers again noted         they lack these skills. Whereas in the past some candidates were able to take on new roles on their
    the impact resulted in additional layers of checks and balances which ultimately led to cost rises.          own terms, in the current jobs market candidates have to work harder at interview to secure a job.

    3. Numeracy                                                                                                  Whilst graduates may be technically competent, in for example IT, their courses appear not to equip
                                                                                                                 them with good communication skills which are highly valued in business. Issues mentioned related to
    While employers were not seeking advanced maths skills for many
                                                                             It was the feeling of the           poor verbal communication with employers, poor spelling and grammar, text speak and difficulties in
    roles, a grasp of numeracy was important. Being able to work
                                                                                                                 drafting effective CVs.
    effectively with numbers throughout all companies and departments        group that candidates
    was desirable. Mental arithmetic was an example many employers           were generally lost
                                                                                                                 Agencies notice a difference in attitude with ‘Generation Y’ candidates whose focus is more about living
    cited was lacking in candidates. It was the feeling of the group         without a calculator.               for life rather than work.
    that candidates were generally lost without a calculator.

                                                                                                                 The recent economic downturn has also resulted in an increase in over qualified candidates looking for
    Other Issues                                                                                                 entry level roles, and more highly qualified temps moving down a job level to secure employment.
    4. Accuracy                                                                                                  Graduates without work experience are being encouraged to take temporary roles to develop their
    Attention to detail was a key theme throughout with employers advising that new hires failed to take         business skills.
    responsibility for checking their work. This resulted in additional checks being performed by team
    managers and co-workers to ensure accuracy. The impact of inaccurate work within the sector could            Ideas from the recruitment agencies covered a broad range of solutions to improve the talent flow into
    lead to substantial financial losses for institutions and so ownership for results was of paramount          the financial services sector rather than just solely focusing on the employability issues. These are
    importance to employers.                                                                                     covered in the potential solution section under ‘recruitment agencies’.

    5. Problem Solving
    Employers advised that it was difficult to find good problem solvers within the business. Candidates
    failed to take ownership for results and pro-actively find solutions to barriers they may encounter.
    The tendency with new candidates was to approach a manager with a problem seeking their solution.
    While employers accepted that new hires may not feel entirely confident in solving complex issues, the
    underlying skills set of seeking out a resolution and taking ownership for that process was lacking.

9                                                                                                                                                                                                                           10
     The Impact of the Issues to Business                                                                       • Financial consequences – less repeat business and increased overheads equal lower revenues
     Employers described the impact of these issues to their businesses; extra training, additional support     • Difficult to educate – not easy to teach communication skills which results in a draw on training
     and checking; poor customer experience which can result in complaints; the negative impact to other          departments and managers
     team members; micro management which is costly and time consuming; and poor perception of                  • Additional time taken to train managers and provide more support to staff – results in additional
     company and brand.                                                                                           spend due to increased resource cost
                                                                                                                • Loss of money in compensating customers – direct impact on profit
     These impacts result in cost increases and time spent addressing the issues. A knock on effect can be      • Unable to network and build good relationships / partnerships – do not collaborate across the
     the loss of attracting new business or growing the business, as well as putting Scotland at risk versus      firm effectively thereby hampering innovation and career progression
     other financial centres.                                                                                   • Limits self confidence – lack of communication skills limit the ability to articulate well with
                                                                                                                  colleagues and clients impacting on self confidence
     Poor Work Ethic & Willingness to go above and beyond                                                      Numeracy

      • Damages productivity – affects what staff can achieve resulting in costs. Weak performers are a         • Loss of time and money due to extra checking
        drag on the team and breed lower team productivity in the long term. Low productivity doesn’t just      • More customer complaints results in additional checks which takes additional time
        affect overheads but it also puts Scotland at risk of attracting new inward investment – other            and resource
        centres are highly productive and cheaper in many cases
      • Low morale - like negative attitudes are contagious and can spread quickly resulting in lower
        productivity and additional cost as a result                                                           Attention to Detail
      • Results – Not achieving targets, delivering inaccurate work or only barely meeting expectations
        all impact upon the goals of the company. The lack of meeting targets or goals also has a direct        • An increase in complaints - results in more time to address and resolve them incurring an
        impact on team members who have to pick up the slack and this can breed resentment                        increased cost too
      • Brand – Poor work ethic impacts brand ultimately as clients see better value elsewhere                  • Have to address the need to change and support development – additional training needs are
        The negative impacts on a company brand can have lasting implications for customer loyalty,               a draw on resources
        profit and more
      • Management overhead – additional checks on inaccurate work results in more management
        time being used which adds to overheads. Level of micro-management to ensure delivery of               Lack of customer focus
        work diverts attention from other team members, is time consuming and adds a level of cost.
      • Level of management – more development of staff who are not up to standard takes management             • Damages employer brand and corporate profile – poor attitude towards providing excellence,
        time away from others                                                                                     result in negative perceptions
      • Contamination of wider workforce – morale and negative behaviours across whole teams can be             • Opportunity cost – lost opportunity to surpass expectations resulting in lack of repeat business
        impacted by one negative individual as others follow lead generating a culture of                       • Training costs – additional training draws upon resources and adds to overheads which
        underperformance. Negative behaviours are at least as likely to have influence on others                  reduces profit
        as positive behaviours                                                                                  • Reputational risk – poor reputation affects new business flows particularly from existing customers
      • Team resentment – productive team members can resent doing additional work from less                    • Impact on internal and external clients – the impact of poor attitudes to service not only affect
        productive members                                                                                        clients externally but have an impact on staff and can bring down overall service levels
      • Engagement which results in churn – disengaged staff become restless and will change jobs
        more often
                                                                                                               Understanding bigger picture of Financial Services

     Communication                                                                                              • Higher turnover due to mismanaged expectations – the gap between expectation and reality leads
                                                                                                                  to more staff leaving
      • Overheads – the additional checks and balances put in place add to overhead and reduce profit           • Reputational risk on employer brand – low knowledge levels can lead to loss of customers as
      • Poor customer quality – poor experience for the customer results in less loyalty and                      there is a gap between what the firm says it delivers and what it actually delivers in terms of
        reduced business                                                                                          customer experience
      • Brand damage – brand quality being eroded due to poor communication has a direct impact                 • Silo thinking in workplace which impacts succession planning and internal mobility – the focus
        on business                                                                                               on own role and function limits opportunity and cross fertilisation of ideas
                                                                                                                • Cross industry damage – poor customer experience across enough companies damages the entire
                                                                                                                  industry perception and brand

11                                                                                                                                                                                                                      12
     Schools and Universities                                                                                   Work-readiness of participants
     Perceptions of the financial services industry                                                             School pupils felt less prepared for work than university
     School pupils and university students had very similar views throughout our research. Their views of       students although those that had a part time job felt better       School pupils felt less prepared
     working in financial services were dominated by negative perceptions in the discussions. They generally    prepared. They said that more careers guidance would help          for work than university
     thought that careers in financial services would be dull, boring and repetitive and ‘minimum wage’.        them to understand careers and the skills needed to gain           students although those that
     Their expectations were of office bound jobs which lacked challenge. The common view was that              employment and progression. Such guidance would include            had a part time job felt better
     financial services companies demanded long working hours and that staff worked under high pressure.        better CV and interview preparation. Students frequently
                                                                                                                                                                                   prepared. They said that more
                                                                                                                commented that stronger links to work should be a central
                                                                                                                part of the university experience to gain experience of the
                                                                                                                                                                                   careers guidance would help
     It was clear that the image of the financial services sector had been negatively impacted by the banking
                                                                                                                ‘real world’. This included talks from industry, organised         them to understand careers and
     crisis. Students seemed very aware of the recession and the role financial services played. This
     reinforced their views of the industry in a negative way. Sample comments we received in almost all        work experience placements and long sandwich placements            the skills needed to gain
     focus groups included ‘sharks, shady, corrupt, greedy, predatory, cut throat, exploitation of customers,   within a degree programme itself. Better guidance from             employment and progression.
     unsafe employment area and a need to restore public confidence’.                                           employers on what they require was also seen as an asset.

     One of the few positive remarks was that pay and reward within financial services was attractive as was    School pupils felt they needed more qualifications before being work ready. Students felt there was
     the potential challenge, opportunities and promotion. The dynamicity of the financial sector and the       a gap in their course work with the focus being on theory with little or no practical application.
     importance of the sector to the economy were also seen as an advantage to some of the participants.
                                                                                                                The Extent of the Employability Problem
     Key factors in choosing a career path                                                                      It has been difficult to measure the extent of the employability skills issues as employers and recruitment
     When asked about what influenced their career choices, pupils advised that money was an important          agencies don’t record statistics on employability. However employers and recruiters advised that the
     factor but they were more concerned about whether they enjoyed or had a particular interest in their       general work readiness of new entrants has deteriorated over recent years with the employability
     role. A sense of purpose was also a key factor. They looked for flexible working arrangements beyond       problem becoming more prominent. It was also not considered that the issues in Scotland were any
     simply 9-5 hours. They also had an interest in travel and promotion within their roles. The type of        greater than in other parts of the UK. Of the employers we approached to participate in the research,
     environment and the people they worked with was a consideration. Unsurprisingly in the current             only one organisation declined on the basis that they didn’t encounter any employability issues.
     climate, job security and availability of jobs was cited as an important factor when considering any
     future career. The pupils and students said that this was a clear disadvantage of the financial services   There are examples of candidates that exhibit the key characteristics that employers look for but the
     sector at the current time.                                                                                general view is that they are increasingly in the minority. One employer stated that ‘it is refreshing
                                                                                                                when an applicant has done their homework; well presented; great at interview; enthusiastic and
     They gave a clear message that the professionalism, ethics and trust of an industry or company was an      positive; and go beyond the expected such as writing a thank you follow up letter after the interview.’
     important factor in deciding upon their career paths.                                                      Even a small action such as checking where the interview location is in advance or leaving plenty of
                                                                                                                time to find it so as not to be late were considered important and showed up those who clearly hadn’t
     What skills are important for financial services employers                                                 taken the effort.

     We worked with the pupils and students to understand their expectations of financial services
                                                                                                                For those candidates that have the right attributes there are
     employers in terms of skills and behaviours from new entrants. All placed educational attainment at                                                                           ‘it is refreshing when an
                                                                                                                a number of success stories of school leavers and graduates
     the top of their list. They expected to have to be very good at maths in order to enter careers in the
                                                                                                                who have stayed in the business and progressed to different        applicant has done their
     financial services industry.
                                                                                                                levels and roles. Employers invest the time and money on           homework; well presented;
                                                                                                                training and development and these people are more likely          great at interview;
     University students were better able to identify the underlying traits that employers sought such as
                                                                                                                to advance within the company.                                     enthusiastic and positive; and
     work ethic, drive, commitment, ownership for results and general attitude although it was more evident
     in the newer universities. Those who were able to recognise the importance of these attributes                                                                                go beyond the expected such
                                                                                                                Employers and recruiters ranked the employability issues
     generally had work experience which they performed in their own time.                                                                                                         as writing a thank you follow
                                                                                                                as being most prevalent in school leavers followed by
                                                                                                                graduates and to a lesser extent experienced hires.                up letter after the interview.’

13                                                                                                                                                                                                                            14
                                                                                                              Graduate Expectations
                                                                                                               • Education sector need to work more on setting realistic expectations of the value of a degree
     Employers                                                                                                   and what role graduates can expect. Managing expectations between students and work – the
     What follows below are suggested solutions from participants within the various groups. These have          expectation particularly of graduates is beyond that of reality, although employers have managed
     not been analysed as we are planning to assess them against existing provision and then determine           this it results in churn and additional cost to industry
     next steps.                                                                                               • The 50% target of young people attending university is not working or needed – degrees are
                                                                                                                 being devalued as many have one yet perfectly capable individuals who do not are been squeezed
     Behaviours / Attitudes
                                                                                                                 out. More could be done to reach high achieving school leavers
                                                                                                               • Careers promotion to focus on routes to entry, current environment and managing expectations
      • Teach world of work skills - bridging the gap between school, university and industry and ensuring
                                                                                                                 – much more work to be done at the careers advice level in school, FE and HE to promote the
        a closer alignment to develop core skills
                                                                                                                 sector and set realistic expectations
      • Increasing work experience – possibly in groups – more work experience at school level with
        financial services companies, beyond school, more internships
                                                                                                              Communication / Numeracy
      • Come to work for a few days – more access to employers
      • Explore different ways to achieve work experience (e.g. interactive ways of delivering work
                                                                                                               • Courses established post school / university to improve these skills in adults requiring further
        experience, classroom methods)
      • More sandwich courses – more sandwich placements within degrees
                                                                                                               • Improve standards of numeracy and literacy in schools
      • Compulsory prep for world of work (companies to get involved for two days during work
        experience course at school) – more core skills training for pupils at school with
                                                                                                              Marketing / CV and Interviews
        employers participating
      • Older population helping mentor younger population with a competitive element – strong role
                                                                                                               • Preparing for interviews could be delivered via online tests – careers services could be delivering
        models within employers could take a more active role in mentoring new talent
                                                                                                                 methods of skills assessments that test candidate abilities
      • Attend / experience Career Academies – more companies to engage with the Career
                                                                                                               • Develop own industry standards of assessment – industry to develop customised methods of
        Academy programme
                                                                                                                 employment testing at interview to ensure they get the right skills
      • PhD research into employability – could develop links to university researchers to understand the
        issues more fully and plan for the future
      • Skills for work should be embedded in all subjects in school before highers – these shouldn’t be
        optional elements instead of other courses, they are fundamental aspects of equipping young
                                                                                                               • Shift of focus for employers on resourcing – employers could hire more from schools if the
        people and are equally applicable at FE and HE
                                                                                                                 maturity levels and general work-readiness skills were in place
      • Training behaviours at school level – being explicit about life skills within the classroom and how
                                                                                                               • Industry driven specification of needs in single communication with all relevant players – sector
        they prepare for the world of work is imperative, although this seems to be on the curriculum it
                                                                                                                 wide articulation of needs to education sector, policy makers and stakeholders to ensure close fit
        needs to fit employer requirements much more
                                                                                                                 of future workforce
      • Mandatory work experience within financial services – work experience tends to focus on retail
                                                                                                               • Offshoring, what skills will we need in the future? – we have to continually upskill as an industry
        industries, more could be done to build work experience links with financial services
                                                                                                                 to be able to retain and attract investment, we need to focus on future growth areas of the business
      • Awareness of employer requirements should be spread of educational journey – from early years
                                                                                                               • Better use of new technology in the workplace such as MSN Messenger – changing the way we
        onwards employers and education need to engage more to share expectations and build links to the
                                                                                                                 operate to better appeal to the instant nature of the new workforce
        world of work
      • A day in the life of our business could be implemented – more awareness of what work is like and
        what can be achieved could help to address the lack of understanding
      • Structured work experience needed to focus on time keeping, customer service skills,
        ownership etc. – work experience should be delivered at schools to focus on teaching the core
        skills needed in a practical setting, re-enforcing the values taught in the classroom
      • Positive role models needed who demonstrate ‘above and beyond’ – identify key performers who
        serve as an example to others and seek to have them mentor weaker performers
      • Corporate social responsibility (CSR) is an ideal category for employers to carry out this work –
        companies could do much more on employability under CSR and would see direct benefits

15                                                                                                                                                                                                                      16
     Promotion of financial services sector                                                                   Suggestions for financial services employers to consider

      • Use the media to raise profile – whole industry to collaborate to promote as a united front online,    • Consider more flexibility in competency based interviews. A belief that one size does not fit all.
        within influential press, on TV, taxis etc                                                               For example a candidate may have scored a 4 but needs a 5. Performed well but will not be offered
      • Employers to do more with Financial Education Partnership (FEP) – employers to volunteer with            the job as rigid rules which are applied to all scores.
        the existing FEP that SIO and FSSC support to deliver career awareness sessions in schools across      • Question as to whether competency based interviews are appropriate for all roles
        the country                                                                                            • Consider more flexibility on pre-employment screening (PES). Some employers are more flexible
      • Schools competition similar to Young Enterprise initiatives or Dragons Den – more business               than others but it’s a big issue. For instance checks on whether candidates have ever had a debt,
        engagement from industry in a stimulating format could help to inspire young people to consider          three year referencing or proof of address. A lot of people have had debts but these people are
        our business                                                                                             automatically declined as ineligible for financial services because of that even though they may
      • Do we need to change as an industry to keep up? – we as an industry need to consider changing            have the right skills.
        the way we market ourselves and appeal to young people                                                 • Employers may want to consider changing their recruitment process. For instance in the past
      • Employers to share information on recruitment with schools – firms to engage with schools to             where an employer has been an employer of choice the employer will now need to work harder
        outline opportunities for school leavers                                                                 to sell the company and the job. Instead of the employer going straight to a competency based
      • Resource for students and pupils to view – better resources to show candidates the career                interview at the start, the first interview should be about selling the job, and the second interview
        opportunities                                                                                            a competency based one.
      • Interactive promotion of financial services – perhaps an online format to raise awareness of the       • A suggestion that employers may want to review their marketing of the job opportunity and
        industry, its importance and the wide and varied career paths available                                  update messages that may have become tired if used for many years. Consider updating the
      • Risk and reward – is the current climate limiting talent flow? – employer felt the slower                messages and tapping into other talent pools.
        employment market was limiting the best talent from entering the business
                                                                                                              Easier routes into the profession

                                                                                                               • There are huge barriers to entry facing young adults and graduates. Even once qualified,
     Recruitment Agencies                                                                                        candidates are often unable to get the job they want because they lack experience. Employers need
                                                                                                                 to open their doors to more of these qualified people and provide the support and experience they
     Behaviours / Attitudes                                                                                      need. Graduate programmes and training support needs to be encouraged and employers should
                                                                                                                 consider mentoring programmes to help those without experience to gain the skills required. More
      • Find out if its an issue that candidates are not motivated to work in financial services                 of a focus on attracting people to this industry will be key, however, without necessary support
      • Introduce a ‘national service’ or ‘boot camp’ type solution                                              being offered, particularly to new entrants, it will prove fruitless.
      • Find a way for graduates to obtain more work / vocational experience to see positive work ethics
        and what is expected of employees                                                                     Employer flexibility
      • As part of the education process, ensure young people have an understanding on what the world
        of work is about.                                                                                      • Employers will need to support professionals that temporarily left the industry during the
                                                                                                                 recession. Many of these professionals were made redundant and are keen to return to a career in
     Marketing / CV and interviews                                                                               financial services. Employers, on seeing the gaps on their CV, are however reluctant to offer these
                                                                                                                 skilled professionals a job, as their proven track record is no longer up-to-date. In an industry that
      • Improve the advice / support from the careers service. Stress the importance of candidates               is struggling to find talent, these professionals need consideration as well as recognition for their
        writing a good covering letter with their CV. Suggestion that there is too much focus on online          desire to return to the industry.
        job websites.
      • Continued support from recruitment agencies to help candidates revise their CVs, at all levels        Leadership and management
      • Advising candidates on what to expect at interviews. Better preparation for competency based
        interviews.                                                                                            • Employers must take an active role in developing talented managers and leaders. The impact
                                                                                                                 of managerial skills gaps and poor leadership is enormous and strategic, long-term thinking is
     Promotion of the sector                                                                                     paramount. Addressing this issue ought to be one of the industry’s highest priorities if it is to truly
                                                                                                                 address damaged perceptions and better promote the opportunities it has to offer.
      • Change the view that jobs in the sector are ‘boring’. Introduce video case studies from
        employers to promote the sector.
      • Keep interested parties up to date with current jobs market – not all doom and gloom in financial
        services – there are some financial services companies recruiting
      • Employers should visit 6th form classes at schools to plant the seeds of job opportunity

17                                                                                                                                                                                                                         18
     Schools                                                                                               Universities

     Behaviours / Attitudes                                                                                World of work

      • Focus on rewards and incentives for good work and behaviour. Give reasons for tasks. Work for       • Greater interaction between employers and universities with more widespread use of ‘sandwich’
        a cause rather than just work for money.                                                              courses (lecture theory and work placements). Academia linked to employability and the real
      • Team building and social events – you want to enjoy work so you’ll put in more effort for             world i.e. industry
        your friend                                                                                         • More work placements to enable students to gain experience and an understanding on the world
      • More social classes in school                                                                         of work – this was perceived as being a high priority at every university event. How to get
      • A pay reduction for a poor attitude - behaviour – three strike system                                 placements.
      • Better management to provide support, encouragement and improve confidence                          • Initiatives between business and universities. More contribution from financial institutions to
      • Motivate workers by showing them you want them to be good                                             universities. Need training and meetings with company reps.
      • Generate fear                                                                                       • More interest from employers to sponsor students through higher education
      • Better recruitment system                                                                           • Most jobs are very specific so it’s hard for the university to do more than the general
      • Staff training                                                                                      • More practical training and experience – meeting with graduates already at work
      • Offer one promotion to a group of workers                                                           • Establish more degrees related to financial services with industrial placements or summer
     Numeracy / Communication                                                                               • To know what skills employers look for. Make clear what is expected in the world of work
                                                                                                            • Leadership guidelines – how to progress through the company
      • Provide training in numeracy and communication skills particularly grammar / spelling               • Universities should start tackling poor behaviours e.g. lateness or non attendance at University
      • Social events to encourage verbal communication for new employees
                                                                                                           Communication / Numeracy
     Promotion of the sector
                                                                                                            • Back to basics in schools to get the fundamentals right. Government and schools need to be
      • Financial services employers visiting schools and talking about their career and what they do.        responsible for education particularly english and arithmetic
        Days out at friendly workplaces                                                                     • Seminars for writing skills and verbal communication
      • Need to promote the careers and industry well – it’s not all just numbers                           • Adding workshops into mandatory academic learning
                                                                                                            • Put these skills into practice at schools and colleges.
     World of work                                                                                          • Liaise with universities more to highlight the problems

      • Many mentioned more work experience and opportunities to go into different workplaces /            Advice for applicants
      • More work experience throughout the school year to gain a better understanding of the working       • Seek more extra curriculum activities that employers will look on favourably
        environment.                                                                                        • Be prepared, take time, check everything twice, practice interviews before
      • More practical training or experience combined with theory                                          • Find positive things about the company and let the interviewer know that you are aware of them
      • Visits from financial services employers to share their experiences of the world of work
      • Get people from various professions to come in and talk about what the job involves, what you      Promotion of industry
        have to do, how to get in and what expected
      • More lessons dealing with work and jobs – better education on what to expect in work                • Promote the industry well - maybe it’s not all just numbers. Visits to schools. Better insight
      • More advice on what careers suitable for individuals. Improved education about how to get a job,      required into job roles. May have a view that things are not good that needs to be corrected.
        mock interviews and constructing CVs
      • Help looking for a Saturday job to gain experience

19                                                                                                                                                                                                               20
     Next Steps                                                                                               Contact Details
     Report findings are being communicated and distributed to a broad range of stakeholders involved in      Alan Thornburrow
     the sector, from education to government, to both inform and establish what is currently being done by   Chief Executive
     organisations to resolve the key issues arising from this research.                                      Scottish Investment Operations
                                                                                                              24 Melville Street
     FSSC and SIO have submitted a summary of findings to the Financial Services Skills Gateway steering      Edinburgh
     group, as part of a high level summary report on skills issues affecting the sector.                     EH3 7NS

     Once responses have been received from stakeholders FSSC and SIO will evaluate the current provision     Email: alan.thornburrow@sio.org.uk
     versus the gaps to identify what needs to be addressed. Our aim would be to make use of existing         Tel: 07809 364089
     provision where possible, and make improvements to current offerings, if necessary. A plan of action
     will be produced and agreed to be taken forward collaboratively with financial services employers and    Linda Houston
     other organisations.                                                                                     Relationship Manager Scotland
                                                                                                              Financial Services Skills Council
     Finally, both Linda Houston (FSSC) and Alan Thornburrow (SIO) would like to thank all those who kindly   28 Castle Street
     gave up their time and participated in this important research.                                          Edinburgh
                                                                                                              EH2 3HT

                                                                                                              Email: linda.houston@fssc.org.uk
                                                                                                              Tel: 07841 235226

                                                                                                                          IF YOU SPEND MORE TIME ASKING
                                                                                                                          APPROPRIATE QUESTIONS RATHER
                                                                                                                          THAN GIVING ANSWERS OR OPINIONS
                                                                                                                          YOUR LISTENING SKILLS WILL INCREASE

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