Financial and related professional services employment’s evolution over time

17 July 2023

Industry employment grew strongly last year, but growth in the past decade has been more volatile.

One of the central features of our annual ‘Key facts about UK-based financial and related professional services’ report is detail about the financial and related professional services industry’s contribution to UK employment. In 2021—the most recent year for which data are available—industry employment rose by 9% year on year, to 2.45m from 2.25m in 2020. This was the largest increase in the past decade, so it’s useful to look at the trends within that headline change.

The first point to make is that 2021 was a highly unusual year, as the impact of Covid-19 restrictions and their gradual unwinding was still being felt. Strong employment growth in 2021 should be seen in the context of a 4% decline in financial and related professional services employment the previous year.

The second point is that growth was highly variable across the industry sub-sectors. Financial services employment growth was 7% (with increases in insurance, fund management, and other financial services employment offsetting a decline in banking employment). Related professional services employment increased by 11% (with strong growth across all three sectors, but in legal services employment in particular).

Following on from this analysis of growth in financial services employment versus related professional services employment, this chart shows how employment in related professional services has become relatively more important within financial and related professional services overall. In 2009, accounting, legal, and management consulting employment together accounted for just under half of total financial and related professional services employment, but in 2021 it accounted for just over half. You can see the precise employment levels for each year by hovering over the chart.

Meanwhile, the chart below presents a more detailed view of how financial and related professional services employment has evolved over the past 12 years. Industry employment growth, shown on the vertical axis, has been volatile and was in fact negative in 2010 and 2012 (in the wake of the global financial crisis) and 2020 (after the onset of the Covid-19 pandemic and its associated economic restrictions). The size of each bubble is proportional to the level of financial and related professional services employment, which has remained in a relatively narrow range of 2m-2.5m over the period. Finally, the bubbles’ shading shows the intensity of related professional services employment within wider financial and related professional services industry employment. The increasingly dark shading over time shows clearly the extent to which the percentage of industry employment accounted for by professional services employment (as opposed to financial services employment) has increased steadily. You can see the precise figures for related professional services employment as a percentage of financial and related professional services employment by hovering over the bubbles.

The latest official data available are for 2021, and 2022 data won’t be released until September. I have written previously about the analytical possibilities of combining innovative and traditional techniques. Thanks to new experimental data published recently by the Office for National Statistics, we now have an opportunity to do just that with industry employment data. In my next post, I’ll analyse this data and explore what it might tell us about current industry employment in the UK regions and nations.

Anjalika Bardalai photo
Anjalika Bardalai Chief Economist and Head of Research

Anjalika manages TheCityUK’s economic research programme. She leads the team that produces the organisation’s in-house economic research, presents research and analysis externally, and writes TheCityUK’s economics blog.

Prior to joining TheCityUK in 2014, Anjalika spent 12 years with the Economist Intelligence Unit (EIU) in the company’s New York and London offices, holding a number of different roles, including head of the EIU’s flagship Country Reports series. She also worked for the consultancy Eurasia Group, advising financial-markets clients on economic and political risk. She has spoken at conferences in a dozen countries across the Americas, Asia and Europe. In addition, she has appeared as a commentator on leading international broadcast media, and has been quoted in print media in the UK, US, India and elsewhere.

Anjalika has a BA from New York University and an MBA from Imperial College Business School. She sits on the Advisory Council of the International Sustainability Institute, and is an Ambassador for the financial-education charity FairLife. In addition, she is Vice Chair of the RSPCA’s London East Branch and previously served as a Trustee of the charity All Stars London and as a member of the Alumni Advisory Board at Imperial College Business School.