By Dr Laura Davison, Head of Research at the Economic Development Office, City of London Corporation
My previous blog (28/09/2017) highlighted how important a role the UK’s large financial services (FS) firms play in generating turnover – with the 115 FS firms with more than £1 billion turnover generating 88% of the sector’s turnover.[1] This week, I’m looking at how important a role large firms play in employment, using new data from the Office for National Statistics (ONS), which lets us look at really large businesses – those employing many thousands of people.
To put financial services in context using the new Business Register and Employment Survey data (BRES)[2], there were 1.06 million financial services jobs in Great Britain in 2016 – 3.5% of employment. Nearly two thirds of these – 663K (63%) were based outside of London. Financial services grew by 26.5K jobs in the year to 9th September 2016 – 2.6% growth, compared with 1.6% growth across all sectors; this represented 5.5% of the net jobs growth across Great Britain.
So, financial services plays a significant role in the UK’s economy. What part do the very largest firms play within this? Most forms of reporting define large firms as those employing 250 or more people. A new ONS dataset lets us look at much bigger firms – those who employ over 15K people, and those who employ between 3K and 14,999 people. [3]
Across the UK, 130 firms[4] employed more than 15,000 people in 2016; 10 of these were financial services firms (0.02% of all financial services firms). These 10 firms collectively employed 32% of the UK’s financial services roles, providing 328K jobs.
Although this represents a very high concentration of jobs in large firms, two other sectors are even more concentrated in their very largest (15K+ employees) firms – retail (48%), and public administration and defence (40%). For other sectors, this concentration is a lot lower – and in areas such as professional services, construction, property, and arts, there are no such firms listed.[5]
Looking at the next level of businesses – those employing between 3K and 14,999 employees, there were a further 40 FS firms with between, collectively accounting for 21% of FS jobs. As the chart below shows, then, collectively 50 FS firms account for over half of the UK’s FS employees – some 539K jobs.
It’s worth noting that the largest FS firms in the UK are bigger even than these categories would suggest – with banks such as HSBC and Barclays employing between 40K to 50K people in the UK.
[1] http://colresearch.typepad.com/colresearch/2017/09/the-importance-of-very-large-financial-services-firms-to-the-uk-economy-turnover-analysis.html
[2] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/
businessregisterandemploymentsurveybresprovisionalresults/provisionalresults2016revisedresults2015
[3] https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/adhocs/007466analysisofenterprisesintheukbyspecifiedemplo
eesizebandanduksic2007broadindustrygroup2016
[4] NB ONS counts are rounded to the nearest five.
[5] Though as counts are rounded to the nearest five, there may be one or two in practice.