Financial and Insurance - Regional Development Victoria

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The Hume Workforce Development

Committee

Hume Regional Development Australia

Financial and Insurance Services

Labour Market Snapshot

Workforce Planning Australia | December 2012

Financial and Insurance Services

Industry Overview

The Financial Services Industry employs 426, 900 people, representing around 3.5% of the total Australian workforce.

The Industry plays a critical role as a barometer for the Australian economy in the global environment and as such is highly sensitive to the state of international money markets.

Signs of recovery were evident during 2010 and 2011, however following the downturn experienced in 2008-09, further instability in late 2011 in the United States and Europe has once again impacted on the Australian Financial Services Industry.

The Industry is highly regulated, which provides confidence to local and overseas investors.

The industry ranks second behind mining for gross value added – making it a very important contributor to Australia’s economy, with widespread demand for its services from all industries.

Workforce development needs are being driven by continuing and expanding regulation of occupations in the sector; extension of the reach of existing technology, eg the National

Broadband Network (NBN), and the emergence of new innovations in information technology (IT).

Demand for specialisation continues, combined with an increasing demand for skills converging with IT and business.

Source: IBSA Environmental Scan 2012

2 |

Insurance Industry - Segments

The Financial and Insurance Services industry is divided into nine key sectors:

Central Banking

Depository Financial

Intermediation

Non-Depository

Financing

Auxiliary Insurance

Services

Life Insurance

Health and General

Insurance

Financial Asset

Investing

Superannuation

Funds

Auxiliary Finance and Investment

Services

Source: DEEWR, Australian Jobs, 2011

3 |

National Industry

Overview

Financial and Insurance Services

Industry Employment

Arts and Recreation Services is the third smallest of 19 industries classified under

ANZICS. In August 2012 approximately 218,000 people were employed in the industry.

Industry Employment Level February 2012

Source: ABS Labour Force Survey (trend data) cat no 6291.0.55.003, DEEWR, Skills Info 2012 .

5 |

Historical Employment Growth

Employment growth has been gradual with some minor fluctuations over the period 1993-

2011. Total employment was 426, 900 people as at May 2012.

Employment is sensitive to factors including macroeconomic, financial regulation, the global economic environment, industry policies and changes in technology.

Figure: Employment Level (‘000)- 1994 to 2012

Financial and Insurance Services - Employment Level ('000s)

February 1994 to 2012

450

407.5

405.8

395.2

400

376.7

365.3

350.8

350.3

344.0

350

337.8

335.8

321.6

312.6

315.5

319.4

311.8

318.7

300

406.7

409.4

424.9

250

200

150

100

50

0

1994 1995 1996 1997 1998 1999 2000

Source:

ABS Labour Force Survey cat. no. 6291.0.55.003, (trend data)

6 |

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Employment by Industry Sector

The largest industry sector is

Depository Financial

Intermediation (includes

Banking), accounting for

182, 900 workers (43% of employment at May 2012)

Figure: Employment levels by industry sector 2012

Financial and Insurance Services - Employment Level - Feb 2012 ('000s)

Depository Financial Intermediation

Auxiliary Finance, Investment Services

Health, General Insurance

70.0

105.3

Auxiliary Finance and

Investment Services (Asset brokering etc.) is the second largest employing sector employing 100, 800 workers

(24%) followed by Health and General Insurance

(64, 900 workers or 15%).

Auxiliary Insurance Services

Superannuation Funds

Non-Depository Financing

Financial Asset Investing

Life Insurance

Central Banking

0.4

5.3

3.0

2.4

15.7

14.3

0 20 40 60 80 100 120 140 160

175.7

180 200

Source:

ABS Labour Force Survey cat. no. 6291.0.55.003, (trend data

7 |

Projected Employment Growth

Project employment growth is expected to vary significantly across the nine industry segments.

Over the next 5 years growth is predicted to be strongest in

Superannuation Funds

(13.1%) followed by Health

General Insurance (6.1%) and Auxiliary Finance and

Investment Services

(5.1%)

Segments predicted to decline include:

Non- Depositary

Financing (-22.4%)

Financial Asset Investing

(-15%)

Life Insurance (-9.4%)

-22.4%

-25 -20

-15.0%

5 year growth to 2016-17 ('000)

-15

-9.4%

-10 -5

-0.3

-0.6

-0.6

0

0.9

0.0

2.0

3.5%

6.2

6.1

5.1%

4.2

6.1%

4.1%

5

Source: DEEWR, Finance and Insurance Services Employment Outlook 2012 (

DEEWR Employment Projections to 2016-17)

8 |

4.6%

10

5 year growth to 2016-17 (%)

13.1%

Superannuation Funds

15

Depository Financial Intermediation

Auxiliary Finance and Investment Services

Health and General Insurance

Auxiliary Insurance Services

Central Banking

Life Insurance

Financial Asset Investing

Non-Depository Financing

Employing Regions

The distribution of industry employment tends to correspond with population distribution, as most households and businesses use finance & insurance services.

Figure 4: Employment Change by State (‘000) – five years to May 2012

New South Wales

Victoria

N.S.W dominates employment

(42% or 180, 000 workers), with the Greater Sydney region alone accounting for 36% of total employment.

Queensland

South Australia

Northern Territory

Tasmania

Victoria accounts for another

27% (or 113, 800 people) of employment with the vast majority of those workers located in the Melbourne area.

Australian Capital Territory

Western Australia

-4

-1.6

-2

-0.6

0

0.1

0.1

2 4

4.7

6

5.9

6.8

8

10.3

10 12

Source: DEEWR, Finance and Insurance Services Employment Outlook 2012

9 |

Top Employing Occupations

Financial and Insurance Services

- Top 20 Employing Occupations in 2012 ('000s)

Employment is concentrated in three occupational groups:

Bank Workers

Financial Investment Advisers and Managers

1.

Clerical /Administrative (44%)

Insurance, Money Market and Statistical

Credit and Loans Officers

25.5

24.1

2.

Professionals (35%)

22.3

Financial Brokers

3.

Managers (16%).

Financial Dealers

18.2

20.2

Accountants

18.0

Over the last decade, there has been a decline in Clerical /

Administrative Workers and growth in the proportion of

Professionals.

Finance Managers

Insurance Agents

General Clerks

Software and Applications Programmers

Advertising and Sales Managers

Accounting Clerks

Personal Assistants

7.4

9.7

9.4

8.7

11.3

11.0

10.1

Occupations projected to generate

Call or Contact Centre Workers

Inquiry Clerks

7.3

7.2

growth over the next 5 years include Accountants (11 400),

Other Hospitality, Retail and

Service Managers (3,300),

Management and Organisation Analysts

Keyboard Operators

ICT Business and Systems Analysts

0

6.1

5.9

5.6

10 20 30

Finance Managers (3,100) and

Financial Investment Advisers and

Managers (3,100)

40

39.7

50

Employment of Bank Workers (the single largest occupation in the industry) is projected to decline slightly (by 1000 workers) in the coming five years.

54.9

60

Source: DEEWR, Finance and Insurance Services Employment Outlook 2012 (

10 |

Recruitment Difficulty

DEEWR analysis has identified that recruitment difficulty is not particularly widespread in the Financial and Insurance Services industry, but that vacancies for a number of the industry’s largest employing occupations are considered difficult to fill by employers.

Hard to fill jobs include:

Table 1: Occupations Difficult to Fill in the Financial and Insurance Services Industry by Skill Level

Higher Skill, Qualifications or Experience

Financial Investment Advisers and Managers

Personal Assistants

Financial Brokers

Lower Skill, Qualification or Experience

Bank Workers

Credit and Loans Officers

Insurance Agents

Other Hospitality, Retail and Service Managers

General Clerks*

Insurance, Money Market and Statistical Clerks

Source: DEEWR, Finance and Insurance Services Employment Outlook 2012

11 |

Skills in demand

The following occupations and job roles were reported as in demand in the Financial

Services industry at IBSA’s Escan industry consultation and validation forums conducted in

2011:

Accountant/

Manager

Accounts

Assistant/

Accounts

Officer/Senior

Supervisor

Auditor

Officer/Accounts

Debt Collector

Financial

Investment

Advisor

Financial

Investment

Planner/Adviser/

Insurance Broker

Insurance

Consultant Claims

Insurance Officer –

Health and Life

Insurance

Financial

Investment

Technical

Specialist

Financial Planning

Manager –

Development

Relationship and

Client Service

Compliance

Financial Services

– Call Centre/Card

Services

Officer/Customer

Service/Business

Source: IBSA Environmental Scan 2011

12 |

Relationship

Development

Superannuation

Advisor

Superannuation

Funds Manager/

Administrator

Workforce Development Challenges

Workforce development challenges identified by the IBSA Financial Services Environmental scan include:

Financial Services Workforce Development Challenges

Increasing regulation and compliance

Managing and monitoring compliance to mitigate risk and minimise impact on effective and efficient delivery of services and products

Skills convergence

Blurring of the lines between job roles and skill requirements

Maximising high speed broadband use capability

Having the skills and knowledge to develop innovative products and services to meet client needs.

Source: IBSA Environmental Scan 2011

13 |

Hume Overview

Financial and Insurance Services

Assistance by LGA

2006 vs. 2011 Census Data

Moira

159 (2006)

156 (2011)

G Shepparton

555 (2006)

474 (2011)

Strathbogie

50 (2006)

59 (2011)

Benalla

75 (2006)

69 (2011)

Indigo

71 (2006)

79 (2011)

Wangaratta

219 (2006)

217 (2011)

Wodonga

404 (2006)

338 (2011)

Alpine

58 (2006)

77 (2011)

Mitchell

234 (2006)

294 (2011)

Murrindindi

58 (2006)

67 (2011)

Source: ABS Census Data 2006 and ABS Census Data 2011

15 |

Mansfield

27 (2006)

38 (2011)

Total Industry

1,949 (2006)

1,904 (2011)

2.3%

Towong

39 (2006)

36 (2011)

Hume Region Boundary

Sub-region Boundary

Local Government Area

(LGA) Boundary

Employment growth Projection in

Hume

According to Monash projections employment is expected to decline steadily over the period to 2014-5 and level out over the 2015-6 period.

Employment will recover slightly in 2016-7 but will not return to previous levels.

3,580

3,560

3,540

3,520

3,500

3,480

3,460

3,440

3,420

3,400

3,380

Finance/insurance employment

2012-3 2013-4 2014-5 2015-6 2016-7

Usage is restricted to the Department of Education & Early Childhood Development and third parties undertaking work on behalf of Skills Victoria.

Source:

Monash Centre of Policy Studies, 2011 (Hume Employment: by ANZSCO occupation, '000 persons, 2010-1 to 2017-8)

16 |

Occupational Employment Levels

The top employing occupations employment levels in the region are as follows:

Finance & Insurance Services (Top 10 occupations by employment level Hume)

ANZSCO ID Occupation Employment (2011-12)

K

552

222

149

221

132

Finance/insurance employment

Financial/Insurance Clerks

Finan.l Brokers etc

Misc Hospitality Retail Managers

Accountants/Auditors etc

Business Admin Managers

3.490

1.119

0.572

0.252

0.129

0.111

551

611

531

Acc Clerks & Bookkeepers

Insurance Agents etc

General Clerks

0.108

0.101

0.093

224 Info & Organisation Profs 0.076

521 Personal Assistants etc 0.074

Usage is restricted to the Department of Education & Early Childhood Development and third parties undertaking work on behalf of Skills Victoria .

Source:

Monash Centre of Policy Studies, 2011 (Hume Employment: by ANZSCO occupation, '000 persons, 2010-1 to 2017-8)

17 |

Financial and Insurance Services

Occupation growth

Monash projections show variable growth in Finance and Insurance occupations.

The largest occupations Financial / Insurance Clerks / Brokers will decline.

Personal Assistants etc

Info & Organisation Profs

General Clerks

Insurance Agents etc

Acc Clerks & Bookkeepers

Business Admin Managers

Accountants/Auditors etc

Misc Hospty Retail Managers

Finan.l Brokers etc

Financial/Insurance Clerks

0,000

2012-3

2016-7

0,500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Usage is restricted to the Department of Education & Early Childhood Development and third parties undertaking work on behalf of Skills Victoria.

Source:

Monash Centre of Policy Studies, 2011 (Hume Employment: by ANZSCO occupation, '000 persons, 2010-1 to 2017-8)

18 |

Financial and Insurance Services

VET Education Data

Book keeper

Accountant

Bank Worker

Industry VET Enrolments Age Profile

The Hume Finance and Insurance services industry has experienced an increase in VET course enrolments across all age groups.

Significant growth has been experienced in those aged 35-49.

60

50

40

30

20

10

0

15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 and over

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

20 |

Not stated

2008

2011

Industry VET Course Level and

Diversity

300

Growth in VET course enrolments is attributable to increased enrolments in the Certificate IV level qualification.

The diploma level course has experienced a decrease in enrolments.

The diversity of students enrolled in

VET courses has been variable.

There has been an increase in the proportion of disabled students while

CALD students have decreased.

There has been a very small increase in the proportion of Indigenous students (1%>).

250

200

150

100

50

0

12%

10%

8%

Advanced

Diploma

Certificate

II

Certificate

III

Certificate

IV

Diploma

6%

4%

2%

0%

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

21 |

Disabled Indigenous CALD

2008

2011

2008

2011

Book keeper

Book keeper

:

VET Enrolments Age Profile

Book Keepers in Hume have experienced an increase in VET course enrolments across all age groups.

The strongest growth has experienced in those aged 45-49.

40

35

30

25

20

15

10

5

0

15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 and over

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

23 |

Not stated

2008

2011

Book keeper

:

VET Course and Diversity

120

100

Growth in VET course enrolments is attributable to increased enrolments in the Certificate IV level qualification in Financial Services (Bookkeeping).

80

60

40

The Certificate IV level qualification in

Financial Services (Accounting) has also experienced growth.

20

0

The diversity of students enrolled in

VET courses has been variable.

Certificate IV in Accounting

Certificate IV in Bookkeeping

Certificate IV in Financial

Services

(Accounting)

There has been a significant decrease in the proportion of CALD students enrolled in VET courses.

30%

25%

20%

The proportion of disabled students has been stable.

15%

There has been a very small increase in the proportion of Indigenous students (1%>).

10%

5%

0%

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

24 |

Disabled Indigenous

Certificate IV in Financial

Services

(Bookkeeping)

CALD

2008

2011

2008

2011

Accountant (General)

Accountant: VET Enrolments Age Profile

Accountants VET course enrolments have declined over the period from 2008-2011(from

118 to 86).

The decline has been variable across age groups with a significant drop in those aged

35-39 and 35-39.

The only age group to experience minor growth was those aged 15-19.

25

20

15

10

5

0

15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

26 |

45 to 49 50 to 54 55 to 59 60 to 64

2008

2011

Accountant: VET Course and Diversity

120

The decline in Accountants VET course enrolments is attributable to a significant decrease in enrolments in the Diploma of Accounting.

100

80

60

The Advanced Diploma of Accounting has experienced some minor growth.

40

20

Despite a decrease in enrolments the diversity of students enrolled in VET courses has increased.

0

Advanced Diploma of Accounting

Advanced Diploma of Business

(Accounting)

There has been growth in the proportion of Disabled and CALD students enrolled in VET courses.

There are no indigenous students in

VET courses.

10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

27 |

Disabled Indigenous

Diploma of

Accounting

CALD

2008

2011

2008

2011

Bank Worker

Bank Worker: VET Enrolments Age

Profile

Bank worker VET course enrolments have grown slightly over the period from 2008-2011

(46 to 63)

The growth in Hume Bank Workers enrolments has been variable across age groups.

There has been significant growth in those aged 15-19 and 20-24.

There has been a decline in the 45-49 age group.

25

20

15

10

5

0

15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 Not stated

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

29 |

2008

2011

Bank Worker: VET Course and Diversity

Growth in Bank Worker VET course enrolments is attributable to a significant increase in enrolments in the Certificate IV in Financial Services qualification. There has also been minor growth in the Cert III level

Financial services course.

The diversity of students enrolled in

VET courses has increased with growth in both Disabled and CALD students.

5%

5%

4%

4%

3%

3%

2%

2%

1%

1%

0%

60

50

40

30

20

10

0

Certificate II in

Financial Services

Certificate III in

Financial Services

Certificate IV in

Financial Services

Disabled Indigenous CALD

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

30 |

2008

2011

2008

2011

Finance Broker

Finance Broker: VET Enrolments Age

Profile

Finance Broker VET course enrolments have grown slightly over the period from 2008-

2011 (1 to 12)

The growth in Broker enrolments has been variable across age groups.

There has been a decline in the 20-24 year old age group.

1,5

1

0,5

0

3

2,5

2

4,5

4

3,5

15 to 19 20 to 24 25 to 29 30 to 34 35 to 39

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

32 |

40 to 44 55 to 59 65 and over

2008

2011

Finance Broker: VET Course and Diversity

Growth in Broker VET course enrolments is attributable to a significant increase in enrolments in both Diploma of Financial Services qualifications.

The diversity of students enrolled in

VET courses has decreased with a reduction in the proportion of CALD

Broker students.

3

2

5

4

7

6

1

0

120%

Diploma of Financial Services Diploma of Financial Services

(Finance/Mortgage Broking

Management)

100%

80%

60%

40%

20%

0%

Source: Data prepared 9 March 2012, Market Analysis team, Skills Victoria.

33 |

Disabled Indiginous CALD

2008

2011

2008

2011

Future direction

What this means?

35 |

The Financial Services Industry employs 426, 900 people, representing around 3.5% of the total Australian workforce.

Employment growth has been gradual with some minor fluctuations over the period 1993-

2011. Total employment was 426, 900 people as at May 2012.

Over the next 5 years growth is predicted to be strongest in Superannuation Funds

(13.1%) followed by Health General Insurance (6.1%) and Auxiliary Finance and

Investment Services (5.1%)Segments predicted to decline include:

Non- Depositary Financing (-22.4%)

Financial Asset Investing (-15%)

Life Insurance (-9.4%)

Total industry employment in Hume is around 3,560 people. According to Monash CoPS projections Hume employment is expected to decline to 2014-5 and recover slightly in

2016-7, although it is not predicted to return to previous levels.

The Hume industry has experienced an increase in VET course enrolments across all age groups. Growth in VET course enrolments is attributable to increased enrolments in the

Certificate IV level qualification and an increase in the proportion of disabled students. The proportion of CALD students declined.

Data Quality and Limitations

The data challenges included:

1.

Different definitions of industries / occupations between ABS, Industry Skills Councils and Monash.

2.

3.

4.

5.

6.

7.

Different Time periods used by different sources

Old Data - ABS Census is now 6 years old. 2011 ABS Census data has been used where available.

Lack of HUME region industry data particularly for industries where employers are predominantly private sector (e.g. Retail, manufacturing and Transport and Logistics)

Lack of regional Skills Shortage Data – DEEWR lists are at the State level

Changes in name and level of VET qualifications (training packages)

Poor sourcing of data – The data source and date were unclear for some data sources.

Limitation of Liability

This Labour Market Snapshot has been compiled using data which, to the best of Workforce Planning

Australia’s knowledge, was current and correct at the time of printing.

WPA gives no warranty as to the accuracy of the information contained herein nor its applicability to any specific circumstances. It is intended as a guide only and Workforce Planning Australia will not be liable to any person as a result of any actual or perceived inaccuracy contained in this report.

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