10 months ago

June 2017 Credit Management magazine

The CICM magazine for consumer and commercial credit professionals


OPINION TEEING UP EDUCATION Karen Young discusses the skills gap in the UK and how the Government’s announcement of T-Levels will help to reduce it. THE recent Budget saw one of the most drastic shake ups of the education system in a generation, and was a welcomed move by many to aid future vocational careers. ‘T-Levels’ are planned for introduction in the autumn. These are technical qualifications providing skills based courses in fifteen areas including accounting and finance, digital, manufacturing, business, hospitality, construction and social care. The development will no doubt improve the acute skills gaps within these professions, and it’s particularly encouraging that accountancy and finance will be included. This grassroots investment is much needed, as the industry is keen to develop the entry routes into the sector to encourage talent from all areas of the education system. The CICM apprenticeship route is of course an example of how this is already being developed within credit management, with specifically-designed courses for those looking to become part of the growing credit profession. In addition, there was welcome news for those already within the workforce in terms of re-skilling to support a generation of workers at risk of job automation. The Chancellor announced the Department for Education will invest £40 million in pilot schemes to support building digital skills into our workforce. It is correct that now is the time to tackle the skills chasm in the UK jobs market headon. At Hays we have consistently warned of a widening skills gap across the country as employers tell us they are struggling to match the vacancies they have with the skills of the available workforce. We want to be encouraging more people into credit management, especially as data from our UK Salary and Recruiting Trends Guide 2017 revealed that the majority (75 percent) of managers hiring finance roles say the shortage of suitable candidates is their top recruitment challenge this year. We need to be promoting the job opportunities in the profession to the next generation – helping them to understand the career paths and the rewards on offer. The sector is optimistic, as our Guide indicated 93 percent of finance employers expect their business activity to remain the same or increase in 2017. Additionally, demand for credit professionals should only increase. In our mixed business conditions, both uncertain economic conditions and business growth create a greater need to manage risk and cash flow, highlighting the importance of hiring effective credit professionals. T-Levels are an excellent opportunity to generate a coherent dialogue between business and schools, and if organised properly, they should help address any future skills shortages. By ensuring robust qualifications and measurable targets are in place, T-Levels will equip the younger generation with vocational careers, demonstrating a programme that has been developed specifically with employers in mind. The introduction of T-Levels to a younger and digitally-minded generation will hopefully combine an education in financial skills with digital capabilities that already exist. This way the initiative can become a two-way partnership, as businesses work with the younger generation to share knowledge. It’s a pertinent time for change, thanks to ongoing business development, corporate deals, growth and a number of companies relocating, the demand for a wide range of financial skills looks set to stay high for the foreseeable future. Credit professionals are currently in high demand by organisations, and salaries are attractive, increasing by 3.7 percent on average in the past year. Additionally, at 28 percent, finance skills were cited as one of the top three skills most needed by organisations to achieve their business objectives this year. It’s clear that there are short- and longterm fixes which need to be addressed. It is vital that we tackle these now if we are to close the gaps and make sure we have the professionals in place who can start to make headway as a leading workforce with a vast amount of talented finance professionals. T-Levels present a golden opportunity for the UK to develop a well-trained and highlyskilled domestic workforce that will see Britain’s credit management industry primed to compete successfully on a global level. Karen Young is Director of Hays Accountancy and Finance. The CICM apprenticeship route is of course an example of how this is already being developed within credit management, with specifically-designed courses for those looking to become part of the growing credit profession. 16 June 2017 The Recognised Standard

OPINION INFORMATION AND TRUST Matthew Davies considers what has been holding the invoice finance industry back. SUPPLY versus demand arguments have dominated the access to finance debate for a decade since the global financial crisis. Arguably, they did for long before it as well but with the end of the good times the political prominence of the debate increased exponentially. Since then we have seen an everextending phase of bank bashing – amazingly Bob Diamond made his comments about ‘the period of remorse and apology’ for the banks needing to end in 2011. And we have seen some fairly dramatic direct policy interventions in the form of the establishment of the British Business Bank, various public-backed lending schemes including Funding for Lending, policy action aimed at combating late payment, at fostering greater competition, and with more yet to come out of the CMA inquiry. For the part of the Asset Based Finance Association – which represents the invoice finance and asset based lending industry and includes both banks and non-banks within the membership – we see ourselves as representing a ‘challenger’ industry. At any one time, ABFA Members will be advancing in the region of £20 billion to more than 43,000 UK and Irish businesses, but the industry could be providing more finance to more businesses, and over recent years we have been considering what is holding the industry back. The information gap is clearly an issue. All studies find a persistent lack of awareness and understanding of what different types of finance are available, when they are appropriate (and when they might not be), and where they can be found. This information gap is as much an issue for the rapidly evolving, technology-focused finance providers as it is for more established types of finance that have not always been understood as well as they should be. Which brings me to the point. The ABFA has been pleased to work with the Corporate Finance Faculty of the ICAEW on a detailed independent guide to the industry and its products and services – Growth through asset based finance. Written to be accessible for both small businesses and those that advise them, the guide follows up on the British Business Bank and ICAEW’s Business Finance Guide, which provides an integrated source of information on the full range of finance options available to businesses. The new publication provides more information about the products and how they work, as well as a range of case studies. Of course, the flip-side of better information is ensuring that clients and prospective clients – particularly smaller businesses that are most apprehensive about taking external finance – feel able to use the products with confidence. The publication also covers the issue of standards, in particular the ABFA’s Standards Framework. The Framework sets the commitments and principles that all ABFA Members will meet in their dealings with clients and incorporates independent means of investigation and, where appropriate, redress where those standards are found to have not been met. The chair of the Professional Standards Council, Lucy Armstrong, wrote a piece on the Framework in more detail in CM earlier this year considering issues around the treatment of SMEs as users of financial services. With potentially choppy economic waters ahead of the UK, information and trust have never been more valuable commodities. The ICAEW Corporate Finance Faculty best practice guideline Growth through asset based finance can be downloaded from: technical/corporate-finance/guidelines/ growth--through-asset-based-financeguideline-65pdf.ashx The British Business Bank and ICAEW’s Business Finance Guide can be found at: Further information on the Standards Framework can be found at: Matthew Davies is Director of Policy and Communications and Deputy Chief Executive Officer Asset Based Finance Association. The Recognised Standard June 2017 17

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