HR trends in financial services: what’s shaping the sector

Financial services HR transformation is shaped by three forces at once: economic uncertainty, regulatory change and rapid technology adoption. Together, they are reshaping HR priorities across banking and insurance. 

Finding skilled people is a constant worry for HR teams. ManpowerGroup’s latest Talent Shortage Survey found that 73% of UK businesses, across all sectors, still struggle to find skilled talent. That’s down from 76% the year before, a welcome dip, but the gap is still wide. For HR teams, that means doing more with the same people while competing hard for the ones who matter. 

The rulebook keeps getting thicker. Financial institutions face evolving requirements on data protection, employee rights and reporting. HR functions are responding by adopting systems that automate compliance tracking and reduce the admin burden on their teams. 

AI, automation and predictive analytics are widening what HR operations can achieve. ManpowerGroup’s future of finance research found that 62% of UK financial sector employers reported using conversational AI business tools, up from 35% the year before. The latest survey adds a useful counterpoint. Only 10% of employers are using AI and automation to replace headcount, and AI has, for the first time, become the skill that organisations find hardest to hire for (19%). The challenge is less about replacing people and more about building the skills to work well alongside AI. 

Tech gets the headlines, but people still do the heavy lifting. Many large financial institutions are investing in people-first strategies. Resilience and retention depend on workplaces where people feel valued, supported and equipped to develop their careers. 

Hybrid working is now a standard part of how many financial services firms operate. 

Flexibility is also a factor in whether people stay. Housing now shapes where people are willing to work. Deloitte’s latest Gen Z and Millennial Survey found that 69% of Gen Zs and 64% of millennials say housing availability or affordability directly affects their career decisions and where they can work. Gen Z and millennial talent are also pushing for ethical leadership and inclusive workplaces. These groups are more likely to judge employers on shared values and DEI commitments.Learn how to align your values with candidate expectations in our Employer Branding Strategy Guide. 

The banking sector faces distinctive HR challenges that shape trends across the wider financial services sector. For a broader view of sector-wide HR challenges in financial services and practical strategies to tackle them, read our blog on HR challenges in financial services. 

Retail and investment banks are focusing on leadership agility and digital upskilling. As customer expectations shift towards digital-first experiences, banks need leaders who can handle ambiguity and teams with the technical skills to deliver modern services. 

Compliance automation has become a priority as regulatory scrutiny grows across jurisdictions. Banks are implementing systems that track regulatory changes, manage documentation and keep teams aligned with complex requirements. That reduces risk and frees HR teams for work that needs a person. 

Internal mobility and career pathing are getting renewed attention as banks recognise the value of keeping their best people. Deloitte’s latest Gen Z and Millennial Survey found that just 25% of Gen Zs and 21% of millennials prefer fast-paced progression marked by rapid promotions. Most did not pick rapid promotion, so steady growth and lateral moves matter too. Banks that offer clear progression routes and chances to move across the business are well placed to retain that talent. 

Insurance organisations face their own HR challenges. The London Market Group’s London Matters report estimates that the market employs around 61,000 people and will need roughly 82,200 full-time equivalents by the end of 2034. 

Age profile is a real issue in insurance. The average age of the London Market workforce is expected to rise to 46 by 2034, and the share of under-30s is forecast to fall from 24% to 7% over the same period. Discover ways to tackle this and the wider talent gap in our blog, Addressing the Insurance Talent Gap: How to Tackle the Finance Talent Shortage. 

AI is being used to speed up onboarding and training. Insurance roles are technically complex, so effective onboarding matters. AI-powered tools can personalise learning, provide on-demand support and help new starters become productive sooner. 

Wellbeing is central to keeping an engaged workforce. Organisations are prioritising physical, emotional and financial wellbeing to lift productivity and reduce attrition. Burnout remains a key concern across finance, and our blog on burnout in the financial sector sets out strategies to address it. 

Invest in scalable HR technology 

Platforms such as PeopleXD bring HR tools into one place. Payroll, compliance and employee engagement sit in one system, and AI tools and analytics help firms cut admin and make better decisions. 

Scalable, integrated tools can future-proof operations and free HR teams to spend more time on recruitment and people work. 

Build a culture of continuous learning 

Continuous learning, through upskilling in compliance, data and leadership, helps teams stay sharp in a fast-moving sector. Peer recognition and open communication can also strengthen morale and a sense of shared growth. Learning works best as an everyday habit rather than a one-off event. For more, see our guide to building leadership capability. 

“We’ve kind of almost democratised learning. You can record something that’s useful and valuable in five minutes, and as soon as it goes out of date, AI can go in and update and interpret it. Everyone can become a creator of learning, and that really creates a culture of learning in your organisation.” 

Oli Quayle, AI Evangelist at The Access Group, in Episode 6: Future Proof Your People with L&D of our Do the Best Work of Your Life series on how AI can impact your learning culture. 

Prioritise DEI and wellbeing 

Inclusive recruitment practices and DEI dashboards help firms track progress and support fairer outcomes. Mental health support and financial wellbeing initiatives designed for the pressures of financial services can help retain top talent and build resilience. Deloitte’s latest survey found that 55% of Gen Zs and 52% of millennials have delayed major life decisions, such as starting a family or launching a business, because of their financial situation. 

For more on embedding resilience and performance, explore our guide to building and sustaining a high-performance culture. 

HR strategies that anticipate regulatory updates and workforce shifts help firms adapt. In financial services, that also means changing how people, processes and platforms work together. 

Start by auditing current HR practices and identifying the gaps. Then align them with the trends that matter most here: AI adoption, continuous learning and inclusive culture. 

If you’re modernising your HR approach, PeopleXD brings compliance, payroll, engagement and analytics into one scalable platform, built for the complex needs of financial institutions. Arbuthnot Latham has seen real time savings with PeopleXD: 

“Since adopting Access PeopleXD, we’ve observed a notable improvement in our end-user experience. The HR solution has eliminated the necessity for manual intervention, reducing back-and-forth email exchanges considerably. This efficiency has resulted in valuable time savings for the team”  

Andrew Dagger, Group HR Director