Despite the UK’s imminent departure from the EU, London remains the world’s No 1 financial centre  and this increased level of onshoring could lead to more jobs being created in the financial services sector.
The research has found more than half (59%) of the UK’s financial services executives have increased their level of onshoring - transferring offshored business operations back to the UK – in the past two years, compared to just 4% who have decreased their onshoring activities.
When asked why they have increased their level of onshoring, 64% of financial services executives refer to service quality complaints and 54% refer to the increase in costs – indicating a cost and quality factor in determining operations being brought back to the UK. The skills shortage (53%) and a lack of efficiency in the offshored regions (37%) are further cited as key reasons for transferring offshored business operations back to the UK.
“In the face of change, financial services companies in London are increasingly under pressure to remain competitive by maximising performance and decreasing costs,” commented Matt Weston, Director at Robert Half UK. “In order to achieve this and offer a premium service, many firms are bringing key business operations back to the UK and creating ‘centres of excellence’ by creating jobs and career development opportunities for local talent.”
In an indication that offshoring is not just about costs, but also a matter of dealing with the working environment in the UK, nearly half (44%) of financial services executives would consider shutting down offshore activities and returning their operations to the UK if the work was carried out more efficiently. In addition, 34% would consider the same if they could find the right skills and expertise available locally.
Onshoring can result in tangible benefits for UK companies. Almost half (44%) of the UK’s financial services leaders who have returned business activities to the UK say it has resulted in increased service quality, followed by increased customer responsiveness (42%), increased focus on the core business (41%) and an increased focus on innovation (38%).
“To fully leverage the advantages of onshoring key business activities back to the UK, organisations need a functioning workforce that is efficient and equipped with the right skills. UK firms are experiencing greater innovation and increased efficiencies, and finally have access to the necessary expertise that was previously hindering businesses that had moved their operations offshore,” concluded Weston. “To avoid future skills shortages and ensure their workforce operates at an optimal level, financial services companies need to invest in adequate training programmes to develop these business-critical competencies. Failing this, employers are looking externally to recruit qualified professionals on both a temporary or permanent basis to meet strategic and operational objectives.”