In January 2023, Hanover made eight predictions about what financial services (FS) could expect from 2024. Now, it’s time to assess how well our crystal ball fared. From the rise of AI and NDAs to how firms have navigated People Risk, we’re here to reveal what we nailed, where we missed the mark and what surprised us.

1. Empathy will become a sought-after leadership quality

What the prediction said: Empathy would shift from being a desirable trait to a critical leadership skill, with companies making greater strides to measure it effectively and embed it into organisational culture. 

Were we right? Partially. In 2024, empathy became one of the most in-demand leadership skills in financial services. But this awareness didn’t always translate into action. One report found that only 66% of FS workers felt empathy was a core part of their organisation’s culture, and just 68% saw leaders backing empathetic words with meaningful action. Empathy seemed to remain a performative lip service, not a genuine driver of change, with efforts to measure and integrate it into culture progressing slowly.

2. Hiring freezes will continue to impact financial services

What the prediction said: FS firms would extend hiring freezes into 2024 and start prioritising resilient talent management strategies to build a stabler talent pipeline.

Were we right? Yes. With ongoing economic uncertainty, the FS sector continued to hit pause on recruiting. Between September 2023-2024, APSCo data revealed that permanent and contract vacancies declined by 30% and 13% respectively. Meanwhile, a Davies Group survey reported that 63% of respondents said their business prioritised training and upskilling existing staff over recruiting new employees.

3. More businesses will rely on talent advisory firms

What the prediction said: Companies would increasingly turn to talent advisory firms to optimise their talent strategies, particularly in executive search and leadership development.

Were we right? Absolutely. 2024 was marked by a critical skills shortage. As new technologies rise and regulatory pressures mount, financial services has been sitting on the brink of a talent crisis, requiring a more strategic approach to talent acquisition. The shift to talent advisory firms was driven by the need to access deep industry insights, leverage advanced assessment tools and ensure resilient succession planning amidst economic uncertainty and tightening labour markets.

4. People Risk will be at the top of the agenda

What the prediction said: In 2024, businesses would prioritise mitigating People Risk by addressing mental health and strengthening Environmental, Social and Governance (ESG) and Diversity, Equity and Inclusion (DE&I) initiatives.

Were we right? Yes and no. The FS sector’s 36% reduction in stress-related reports to the HSE suggests a positive trend in workplace mental health. Additionally, ESG remained critical, driven by new FCA regulations enforcing anti-greenwashing standards.

But firms were slow to move the DE&I needle. They may have filled their hiring quotas, but 40% of women working in FS say their company’s DE&I policy was not effectively implemented, while 82% of ethnic minorities in financial services reported experiencing discriminatory comments at work. As we head into 2025, the DE&I agenda must move towards prioritising a psychologically safe environment where everyone feels welcome and represented. 

5. Private equity will shift focus to niche sectors amid a challenging climate 

What the prediction said: As debt markets and the broader economic environment tightened, private equity (PE) firms would focus on niche sectors like artificial intelligence (AI), healthcare technology and cybersecurity to find growth opportunities.

Were we right? Yes. PE made a strong recovery in 2024, driven largely by significant investments in Generative AI (GenAI), a strategy backed by 98% of PE portcos. Meanwhile, four PE deals in British medical devices were announced in Q3 2024, worth a total value of $546.7m. These were key contributors to the rebound of PE deal activity in the UK, which surged by 8183% in Q3 2024. 

6. More businesses will enhance their EVP by offering outplacement support

What the prediction said: Companies would increasingly offer outplacement services as part of their Employee Value Proposition (EVP) to support transitioning employees and maintain a positive brand reputation.

Were we right? Yes. The demand for outplacement services exploded in 2024. The UK outplacement market size was valued at $3.76bn and is projected to reach $8.41bn by 2031, reflecting the priority firms are placing on supporting their exiting staff. The increase in outplacement support has likely been spurred on by widespread downsizing initiatives across FS. With talent retention remaining a top priority, highlighting outplacement support in their EVP is a great way for organisations to safeguard internal culture and attract top-tier executives. 

7. NDAs will reshape financial services

What the prediction said: As leadership competencies continue to change, companies would increasingly work on confidential, high-stakes projects. We predicted that NDAs would become standard in financial services executive search as firms fiercely compete for talent. 

Were we right? Yes. Confidentiality remained a priority in hiring processes last year, with over 70% of executive search assignments being conducted under an NDA. This was likely in response to heightened performance pressures, evolving leadership demands and companies’ impatience with underperforming executives. As businesses face slim margins for error, they’re seeking leaders who excel in tech literacy, adaptability and commercial acumen. Firms are also proactively refreshing stagnant leadership teams to drive transformation and stay competitive.

8. AI will transform the talent landscape

What the prediction said: Businesses would gain the confidence they need in GenAI to drive efficiencies across every stage of the talent lifecycle, from speeding up data analysis for precise candidate sourcing to empowering teams and improving talent retention.

Were we right? Partially. FSorganisations definitely gained confidence in AI adoption. In one report, 75% boasted industry-leading AI capabilities, with 69% using AI-powered data analytics and 43% using GenAI. However, according to Oleeo, only 15% of firms fully embraced AI in talent acquisition, so many are yet to fully leverage its potential in long-term workforce planning. This gap indicates that while tactical applications of AI are growing, there’s still progress to be made in embedding AI as a core component of strategic talent management.

Despite the twists and turns, 2024 was a year of transformation in financial services. Stay tuned for our 2025 predictions on what the next 12 months will have in store for the industry.