Across the world, financial and fintech organizations are facing significant challenges in attracting and retaining the talent they need to grow and prosper.
There is no doubt there is a widespread demand for talent, especially technology-based talent, across the financial services sector. Financial services organizations of all types are struggling to fill the vacancies. The situation in the U.K. today shines the spotlight on these concerns.
Looking at U.K. situation
In a recent survey by Hays Financial Markets, which polled 900 workers and employers in the City and the rest of the U.K., 61% of employers said they faced a moderate to extreme skills shortage during 2017. Technology skills are among those that are highly sought after, according to the survey. This shortage of key technology skills will impact not just traditional banking and financial services organizations but also the rapidly burgeoning array of fintech-specific organizations.
The pending arrival of Brexit in 2019 looks set to make many of these skills shortages issues worse for U.K.-based businesses that rely on fintech. A new report from Innovate Finance, an independent membership association that represents the U.K.’s global fintech community, forecasts that, based on current performance the sector is set to grow to more than 100,000 employees, and the number of U.K. fintech companies more than double to 3,300, by the year 2030.
However, 82% of companies polled stated that they already face difficulties in recruiting non-European Economic Area migrants. Under the most likely scenario for future immigration policy, in which the system for EEA migrants moves closer to that for non-EEA migrants, the report predicts a shortfall of 3,200 highly-skilled workers by 2030. This is projected to equate to a direct loss of £361 million to the sector.
Against the backdrop of such a challenging environment, much of which is outside their control, it is increasingly important that fintech organizations do all they can to focus on recruitment and retention strategies that allow them to attract skilled staff, help them to foster their development and encourage them to stay with the organization over the long-term.
Finding a better approach to fintech recruitment
Most fintech organizations face similar challenges when it comes to recruitment. Typically, they are all looking for technology experts—designers, developers, and systems architects, who not only understand business but also how to use technology to solve business problems.
This kind of resource is in short supply. Finding fintech talent with relevant experience is rare indeed—and when businesses do find such candidates they often have to compete with a raft of competitors in order to secure their signature.
That’s why traditional recruitment approaches such as placing advertisements in relevant publications typically have limited impact. Fintech businesses must be much more proactive and make use of all outbound channels of engagement available to them in order to track down and attract potential recruits.
One such channel is what we at Fraedom call “crowdsourcing.” This essentially is a “bottom up” approach to recruitment, which involves likeminded people referring industry talent (who then subsequently also go through Fraedom’s rigorous internal recruitment program). At Fraedom, this approach has been extremely successful. We now achieve 40% of our placements this way.
In addition to pursuing such an approach, it is also important that businesses look to cast the net wider and leverage existing recruitment networks to bring in new talent.
More generally, this proactive engagement is critically important in positioning the opportunities of working with a fintech company correctly. After all, if the industry wants to ensure that a lot more people heading into work start their careers in the technology space, then we need to make certain that across schools, colleges, and universities there is a much better understanding of the industry and what it’s like to work for a technology company.
That’s why we see a place for fintech “boot camps” aimed at attracting more people into the technology talent pool. The focus could be on running intensive short courses of a week or so in duration, where interested parties visit multiple companies across the industry, speak in detail to senior staff, and learn about the business environment and the type of work fintechs generally do.
In what is becoming an ever more attractive landscape, it is critical that fintechs pursue this strong focus on attracting the best talent. After all, today’s candidates know that they are negotiating from a position of strength. Many have grown up with the culture of tech giants like Amazon, Google, and Facebook and are therefore looking for the kinds of perks and benefits that they perceive working for such businesses would bring.
The big draw varies depending on the employee. The attraction might be anything from stock options, which are particularly popular in the U.S., to generous salary settlements; more flexible working hours with a change to the typical 9-5 view of a job, to higher levels of autonomy often associated with working for a nimble, agile business with an enticing focus on innovation and disrupting the status quo.
While employee benefits are key in attracting candidates and retaining them within the organization, the prevailing business culture is equally, if not even more, important.
Keeping employees in the fold
Recruiting staff is only part of the battle, however. Fintechs also need to be able to retain them over the long-term. That means offering them the training they need to progress within the organization but also building the skills required to get more out of what they are doing today and gain more insight into how they might want to develop in the future.
With this in mind, in-house training courses should offer a broad selection of different options to match the needs of every employee. Courses should be carefully structured, rather than ad hoc.
Employees should be able to quickly and easily see what is available to them. New recruits might want to quickly build a rich portfolio of different skills, for example. Experienced workers, on the other hand, might be looking to move out of their comfort zone and try something new. They might, for example, be a business analyst, and be looking to try out becoming a tester, developer, or a product owner.
Whatever the precise scenario, the best fintech training schemes should offer a wide range of choice. It is critical that fintech employees are given the chance to improve and expand their skills. If they feel that there is little prospect to advance their career and/or their own skillsets, employees will be more inclined to leave and get a job elsewhere.
This opportunity for freedom of choice needs to extend beyond the training sphere, however. Typically today, fewer and fewer employees want to be shoe-horned into a traditional hierarchical approach and pushed into managerial jobs that might not necessarily suit them. Flat structures that empower workers to express themselves and remove all managers and team leads are becoming ever more popular. Rather than being constrained by technology, employees should be freed up to experiment and to express themselves without fear of failure.
For fintechs, the key must be around developing an empowering management philosophy where staff are encouraged to take risks together with a stimulating and inspiring workplace, where creativity thrives. From development, right through to product sales and marketing, it’s important that people are actively encouraged to excel and grow in an agile, collaborative, and inventive environment where talent is recognised and rewarded.
It’s all part of a twin track approach which fintechs will increasingly need to adopt if they are to survive and thrive in the future. Getting their recruitment strategy right is critically important for fintechs if they want to be competitive in the future. However, it will be equally key for them to nurture their employees, provide relevant training and engagement opportunities and focus on staff engagement, if they want to succeed in the long-run.
This is yet another example of the importance of workplace culture—this time in staff retention. Having a competitive benefit program is a “nice to have,” but if the prevailing business culture doesn’t appeal upfront, people won’t join the company. And conversely, if it fails to challenge and nurture, people will leave.
About the author
Russell Bennett is Chief Technology Officer at Fraedom. The firm is an international company that assists banks to enhance business and corporate card programs.