Almost six years on since the early rumblings of economic turbulence, the financial services sector is facing change on an almost unprecedented scale.
Having felt the full force of a public backlash and the weight of discontent from governments and regulators, what does the future now hold for the industry? Certainly a very different one to what it had envisaged in the years before the banking crisis unfolded.
Measures to reduce risk, including the introduction of major policy and regulatory reforms targeting the specific interests of individual nations, have rendered the financial services industry safer and more stable than before.
As these new policies take hold, many will have no choice but to divest interests, rationalise products and focus on better understanding local markets.
However these financial institutions must now start to think beyond the changes they need to make to comply with the regulatory onslaught, and focus on driving through the fundamental changes in culture and behaviour that will enable them to rebuild stakeholder trust and deliver the sustainable results now expected of them.
These changes need to reflect the core themes that are reshaping all industry sectors post global financial crisis, and that regulators are aggressively pursuing, where the end customer is put first. And in order to do that, financial services organisations will need to better understand and manage their talent.
This represents a significant step change; a tall order, yet many of the findings from our Financial Services Employee Rewards Watch survey have revealed, in spite of the challenges it faces in bringing out that change, the industry is optimistic.
According to ONS data the financial services industry contributes 10% less to UK GDP than it did at the start of the recovery, yet many respondents to our survey were optimistic about financial performance in the year ahead.
And although the industry now employs 56,000 fewer people than in 2009, from our own research we know that over half the respondents expect to see growth in headcount over the year ahead, suggesting a significant investment in new strategies.
This year nearly half of respondents in the sector expect to give role-by-role increases to pay, twice that in 2013, suggesting that many are already rebalancing financial incentives.
Radical change can never be achieved quickly or without significant uncertainty, pressure and upheaval amongst employees, which is reflected by increasing levels of absence in this year’s survey.
We believe that the challenges that lie ahead throughout 2014 will continue to place considerable demands on HR professionals in the sector, in modifying reward packages to meet new strategic demands.
Achieving this will require a much greater focus on efficient administration, including the use of new HR technology and effective communications.