City sackings and suspensions fall by a third

10 Feb 2014 | 10:17 am | 1 min. read

The number of sackings and suspensions of staff at financial institutions has dropped by a third over the past year, according to figures obtained by international law firm Pinsent Masons.

Data obtained by Pinsent Masons through a Freedom of Information request shows that 939 financial services employees were dismissed or suspended in 2013 -  representing a 32% decrease in dismissals and suspensions compared to the previous twelve months.

Pinsent Masons says that changes to the employment status of individuals who require FCA authorisation to carry out their function – typically customer-facing staff – must be registered with the regulator. FCA-regulated businesses are also expected to indicate where employees have been sacked or suspended, most commonly as a result of suspected wrongdoing.

In addition to a reduction in sackings and suspensions, the data suggests that the number of job losses among staff in the sector has reached its lowest level since the peak of the financial crisis in 2008. 30,991 people in the sector lost their jobs in 2013 compared to 36,868 in 2012 - although a proportion of those people may have been re-employed or transferred internally to unregulated functions.

Kirsty Ayre, a Partner in the Financial Services team at Pinsent Masons, says:

"UK bank reporting season starts this week and these figures are welcome news for the financial services industry. 2012 was a real high watermark for the number of sackings and suspensions by financial institutions as a number of scandals came to light. The birth of the FCA raised the profile of the fight against financial crime and market abuse. The number of sackings and suspensions is still relatively high, but clearly the threat of multi million pound fines and a new push toward personal accountability means that staff in authorised roles operate in a more transparent environment."

"Employment in the finance sector is now growing at its fastest pace since 2007* while this data also suggests that the number of customer-facing staff exiting appears to be more stable, having reached its lowest level in six years."

"Having said that, it would be too soon to say that the banks are in growth mode. We continue to see some significant restructuring in the sector, and the impact of the Banking Reform Act passed in December is yet to be felt. Change is likely to follow as financial institutions separate the investment arms from the retail and commercial operations. Whether that creates more employment opportunities as separate HR and other functions are established is a big question not just for the banks but for the UK employment market." 

 

2008

2009

2010

2011

2012

2013

Total number of 'Form C notices of ceasing to perform controlled functions'

37442

35350

33824

34213

36868

30991

'Clean' withdrawals (eg. internal movement of staff, resignation, redundancy, retirement or end of contract.)

36639

34255 

32939 

33435

35495

30308

'Qualified' withdrawals (eg. dismissals and suspensions)

803 

1095

885 

778 

1373

939

Source: Pinsent Masons

– ENDS –

* CBI/PWC Financial Services Survey: http://www.cbi.org.uk/media-centre/press-releases/2014/01/recovery-feeds-through-to-financial-services-firms-1/

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