Staff numbers at the Financial Conduct Authority (FCA) fell by 167 in the last financial year despite the regulator focusing on recruitment and it eventually hiring 374 people from outside the organisation.
The FCA said it was an “increasingly competitive employment market” following a “return to pre-pandemic levels of attrition and recruitment challenges”.
At the end of the 2021/22 financial year the organisation had a total group headcount, including the Payment Services Regulator (PSR) of 4,027, which was 4% down on the 4,194 at the end of the previous period.
“Overall staff numbers have decreased as a result of a very competitive hiring market and the return of attrition to pre-pandemic levels,” the FCA said in its annual report.
It noted that of 1,224 appointments in the year, 850 through internal moves while 374 were external hires.
“During 2021/22 we have continued to focus on attracting, identifying, and selecting the diversity of talent required to match our ambitions,” the regulator continued.
“We have maintained our focus on internal talent, and we have promoted internally wherever possible.
“Where we have been unable to recruit from within, we have been able to source strong external talent in an increasingly competitive employment market.”
As a result of the shortfall staff costs were £29.7m lower than budgeted for.
Wellbeing and absence
Absence levels also ticked-up during the year but did not quite return to pre-pandemic volumes.
During 2021/22 the average days per year lost per person due to sickness absence increased to 6.7 days, up from 4.4 days the previous year, and comparable to 7.3 days in the year ending 2020 prior to the pandemic.
This summer the FCA is adding an excess payment to its staff private medical insurance (PMI) policy which is open to all employees and their partners.
The regulator said premiums for the policy had almost doubled in the last five years, but headcount had only risen by 22%, suggesting usage and medical inflation had grown rapidly.
Therefore it proposed that lower grade employees pay a £100 excess per year with higher grade staff paying £200.
FCA employees also have access to a range of support services such as an employee assistance programme, a virtual GP service, physiotherapy and occupational health.
“Throughout 2021 we have continued to focus on post pandemic support, giving greater consideration towards colleagues’ physical and mental wellbeing especially while working from home,” the FCA said.
Pay dispute
The regulator has also been locked in a dispute with trade unions representing its staff over the year about proposed changes to its reward and pay structure.
FCA CEO Nikhil Rathi (pictured) argued the new employee offer rewarded performance and the majority of colleagues will receive an average 12% pay increase over this year and next, with the lowest paid receiving significantly greater increases.
He said 900 colleagues will see rises of an average £6,500 and the regulator remained one of the best paid public authorities or enforcement agencies in the UK.
The FCA said that in future, performance related pay will reward the strong performers who are paid less in comparison to their peers the most, helping to rebalance our overall salaries over time and narrow pay gaps.
“Importantly, the changes made to our pay offer advances our diversity and inclusion objectives. The result is a positive impact on the pay of younger, female and ethnic minority colleagues in particular,” it continued.
“The central aim of our offer is not to cut costs. Nonetheless, our offer must be financially sustainable.
“That means putting our benefits on the right footing, balancing the desire to protect the benefits colleagues value the most against substantial increases in costs and considering what other employers offer.”