London depends on its ability to attract the very best talent
FOOTBALL has few similarities to the finance profession. But they are similar when it comes to the need to attract the best talent to London and the UK.
The future of London as a global financial centre has been a topic of fierce debate for some time, with the finance sector, business and the mayor eager to protect the capital’s status as an epicentre for global activity. Central to that debate is the issue of skilled migrants coming to London to help maintain the City’s status as the finance capital of the world.
That debate rages on, with many in the City eager for the Prime Minister not to restrict talent from migrating to London. By its nature, the City is global in outlook so attracting professionals from all corners of the planet makes perfect sense. However, while the debate is not new, the risk that London could lose its magnetism is escalating. Other centres are growing in strength.
City UK, the independent lobbying organisation, has shown that the UK is the world’s leading exporter of financial services. Its recent report into the issue showed that the UK’s 2011 trade surplus of $51bn (£33bn) in finance was more than double that of the next largest surpluses recorded by Luxembourg and Switzerland. Financial and professional services are the UK’s leading export earners, contributing £55bn in 2011.
Finance is, of course, global. London, like New York, is a well-established centre, but more are vying for top billing – from Moscow to Mumbai. There are many working in other global financial centres, like Singapore and Shanghai, who are now managing accounts, processes and teams. They are the emerging talent, in emerging centres, who may want to come to London to share skills but can’t because immigration rules have limited the flow into the UK.
The current controls on skilled immigration could hinder the City. If London is to sustain its competitiveness, policymakers must ensure future regulations attract and retain both home grown and imported financial expertise and innovation.
But instead of inviting the world’s best talent of tomorrow to come to Britain, an anti-immigration message risks preventing universities and businesses from drawing bright minds to the UK. The impact could be challenging for the higher education sector, which brings in £8bn annually from overseas students. It could also reduce London’s appetite and ability for greater innovation in finance technology. This will have the knock-on effect of global businesses importing finance technology from elsewhere, making the City even less attractive.
But don’t forget about the UK’s own talent. Should immigration caps have an impact on London’s status as a global finance centre, what will stop home-grown finance leaders upping sticks and eventually emerging in a market overseas, rather than the UK, as other financial centres strengthen their reputation? There are also benefits to UK professionals from working in a diverse workforce. They can flourish when working alongside the best people from across the globe.
Returning to the City UK report, London’s prime global financial position is the result of a number of factors – from its central geographic location between US and Asian time-zones, to its concentration of professional and support services like accountancy and law. But it also holds this position because of the people who work in the broader financial services industries and related professional services – from accountancy to insurance, from Islamic Finance to banking.
London and the wider UK needs to encourage skilled immigration not just to the universities, but to the City and beyond. The old line that immigrants take UK jobs doesn’t stand up. There has been considerable research, from organisations like the National Institute of Economic and Social Research, which shows little or no correlation between inflowing migration and any sudden rise in those seeking job seekers’ allowance in the UK.
Higher education brings in £8bn annually from overseas students, and could be harmed
Only last week at the NORFACE Global Development, New Frontiers: Interdisciplinary conference on migration at University College London, a study by academics Cristina Cattaneo, Carlo Fiorio and Giovanni Peri was unveiled which showed larger flows of immigrants into European labour markets increased the probability of upward career mobility for native workers, as well as the probability that they will launch a new entrepreneurial activity. At the same time, these larger inflows do not seem to increase the probability that native workers would become unemployed or move away.
Often, a finance professional’s asset is linked to their origins or market knowledge, with understanding of other markets essential for the UK financial sector to do business overseas.
Specifically, in finance function roles, there is a need to better reflect the needs of businesses. Accountants and chief financial officers (CFOs), as well as the teams that support them, are no longer “bean counters” gradually climbing the career ladder. Businesses, perhaps more so since the economic downturn, are turning to the finance function for guidance on business strategy. The role has widened beyond number crunching, and this is borne out by the fact that net exports from UK accounting services totalled £660m in 2011, making the accountancy profession one of the major services to feature in the City UK report.
Earlier this year, ACCA surveyed nearly 500 CFOs in the UK, Malaysia, Russia, China and the UAE about what they wanted from future finance recruits. Rather than have some new recruits who were solely management accountants, or some with a narrow focus on a particular market, they wanted a more all-round finance professional with strategy, management, ethics, professionalism, risk and sustainable business growth awareness in their arsenal.
Finance professionals need to be complete finance professionals, meaning they must have skills beyond the traditional accountancy role of previous decades. They need to be communicators, risk assessors, managers, strategists and more, as well as having an international outlook. That is what the finance leaders of the future need to reflect, and that is what ACCA’s own qualifications deliver.
Businesses simply want the best talent. Where it comes from – the UK or overseas – should not be a bar to securing the services from that talent pool. In many ways, global businesses are like Premiership football teams. They want the best players in order to succeed. Where that player is born and what country they can play for is irrelevant. The main driving force is that those players, like their finance professional equivalents, are skilled and complete.
Sarah Hathaway is Head of ACCA UK.