Britain's Financial Firms Fear Staff Shortages Will Hurt Business - CBI
By Martin Baccardax | January 21, 2013 7:26 PM EST
Britain's biggest financial firms are growing increasingly concerned that staff shortages could hurt their chances of capitalizing on a business rebound in the coming year.
Financial services firms are more optimistic about a pick-up in business than they have been since the global financial crisis, according to benchmark survey published today by PricewaterhouseCoopers and the Confederation of British Industry, but are worried that staffing constraints after years of headcount reductions could limit their potential to grow.
"It's encouraging that firms are more optimistic about their business situation than they were last quarter and expect volumes to rebound strongly in the three months ahead," said Matthew Fell, the CBI's director for competitive markets. "However, there is rising concern that staff shortages are likely to limit business and investment over the next year, as well as the challenge of raising finance."
Business conditions remain challenging for the 94 firms that responded to the survey, PwC and the CBI said, with 25 percent reporting a rise in business volumes of the final quarter of last year against 30 percent who experienced a decline. The 5 percent balance to the downside was the second consecutive quarter during which actual business fell short of expectations.
That said, 34 percent of respondents see volumes increasing in the first three months of this year and the overall level of optimism - 27 percent - is the first rise since March of 2011 and the highest figure recorded since 2004.
"The banks reported a dramatic return to optimism, reflecting positive forecasts for revenue and profitability," said PwC's UK financial services sector leader Kevin Burrowes. "Although very welcome, banks made similar forecasts before, only to be disappointed. Commercial business in particular failed to live up to its promise, declining during the last months of 2012."
Nearly a third of those polled said the availability of professional staff is likely to be a constraint on business growth - the highest proportion of responses since March of 2006. Thirty-seven percent said that would hold back investment.
Data collected by Bloomberg news suggests as many as 25,000 jobs were lost in the final quarter of last year from Britain's banks, insurance companies and asset managers and as many as 18,000 might go between now and the end of March. Globally, said Bloomberg, more than 115,000 jobs in the industry were lost last year.
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