Everyone is focused on senior hires and everyone is investing in graduates. Meanwhile, the part of the workforce that actually keeps regulated sectors moving is being quietly squeezed. Mid-tier professionals are carrying more responsibility with fewer options to progress, even as expectations continue to rise.
Call it the hidden middle or the missing engine room. If you work in financial services, insurance, payments, private markets, or any sector built on compliance, trust and precision, the pressure is already visible. Delivery feels harder than it used to. Risk feels tighter. Teams feel thinner, even when headcount looks fine on paper.
Most organisations are not short of talent, they are short of mobility. Nowhere is that more apparent than in the three to eight year experience band, where capability often outpaces opportunity.
This is the workforce tier few organisations talk about, but most depend on. These are the people delivering regulatory upgrades, running complex workflows, maintaining controls and interpreting nuance. They spot early cracks in processes before they escalate, bridge strategy with execution and absorb risk long before it reaches senior leadership or the board.
Yet this group is shrinking. Not because the talent does not exist, but because internal systems make it difficult for people to move, develop, or step into larger roles without hitting a wall.
In regulated sectors, pathways are structured and responsibilities are rigid. That structure exists for good reason. But the same compliance frameworks designed to protect organisations often end up throttling the talent pipeline that keeps them operating safely and effectively.
Mid-level talent stagnates for a few consistent reasons:
Promotions frequently require experience people cannot access. It is the familiar catch-22. You cannot step into a more senior risk or compliance role without exposure to a specific area, yet that exposure is only available once you already hold the role. Progression exists on paper, but governance blocks it in practice.
Tenure is also prioritised over capability. Consistency matters in regulated environments, but time served is not a skill. People with five years of intense, hands-on operational experience are often overlooked because they are not seen as seasoned enough, while others progress largely on longevity. Talent is not the constraint here. Credentialism is.
Managers play a role as well. In environments where losing one capable mid-level operator can derail a project or assessment cycle, mobility starts to feel risky. Strong performers are held onto rather than developed outward. People stay out of loyalty or guilt, not because they see a clear future path. Guilt is not a retention strategy.
Career frameworks add to the problem. Risk, data, governance, cybersecurity, AML and payments operations do not operate in neat tiers. Responsibilities overlap and capability develops across functions. Progression should reflect that reality, but outdated frameworks still force linear paths. Many mid-level professionals look at those paths and conclude that progress will only happen when someone leaves. So they leave instead.
Workload compounds everything. In regulated environments, the safest pair of hands often ends up carrying the heaviest load. The more capable someone is, the more work they absorb, until there is little space left for learning, movement, or cross-functional exposure. Development gets deprioritised in favour of delivery and people remain stuck not because they lack ambition, but because the system relies on them staying exactly where they are. Growth is hard when every day is spent firefighting.
At that point, this stops being a talent issue and becomes an operational risk.
Regulated sectors depend on continuity, expertise, judgement, disciplined documentation and audit confidence. When the mid-tier pipeline starts to dry up, organisations lose far more than headcount. They lose future leaders, credible succession plans, internal knowledge transfer, regulatory resilience and delivery capacity.
To compensate, firms fall back on familiar but expensive patterns. They overspend on contractors, promote people before they are ready, or rely on small groups of exhausted high performers who are close to burnout. The hidden middle is where stability lives. When it weakens, the entire structure becomes fragile.
Breaking the internal bottleneck does not require gimmicks or talent pools hidden in slide decks. It requires structural change.
That starts with creating rotational exposure without breaking compliance. Full job moves are not always necessary. In many cases, controlled exposure windows are enough, such as:
- shadowing regulated processes
- shared ownership of defined projects
- short, time-bound assignments
- supervised scenario or incident cycles
Regulated does not have to mean rigid. Learning can be structured without increasing risk.
Career frameworks also need rebuilding around skills rather than years. The focus should be on what people need to be able to do, not how long they have existed in the industry. Flattening the culture of waiting and creating more than one route into senior roles makes progression realistic rather than theoretical.
Managers need incentives to develop talent rather than hoard it. Mobility should be rewarded, not treated as disruption. Developing people is value creation, not a cost.
Organisations also need to stop defaulting to senior hires to solve mid-level problems. The automatic response to capability gaps is often to hire at the top, yet mid-level professionals are closer to the work and more adaptable. What they lack is opportunity, not ability.
Finally, capacity has to be built into the system. If someone is too essential to move, that signals a structural weakness. Knowledge needs duplicating. Ownership needs spreading. Single points of failure need reducing. Mobility strengthens resilience rather than undermining it.
The pressure on mid-level talent is not a recruitment problem. It is an organisational design issue.
People are not leaving regulated sectors because the work lacks meaning. They leave because pathways are blocked, frameworks are outdated and the internal mobility story does not match lived experience.
Fix that bottleneck and you unlock stronger succession, better regulatory outcomes, improved delivery capacity, lower hiring costs, reduced operational risk and higher retention.
The hidden middle is not the problem to solve.
It is the engine room worth protecting.
