Global search firm TritonExec’s partner Georgina Pawley discusses fintech’s challenge holding onto talent.
Fintech’s Talent Problem.
Working for a cool fintech business that is innovating and developing cutting edge solutions sounds exciting for many, and with opportunities in this space on the rise, we are encountering a strong candidate driven market as demand for talent increases. Candidates in fintech right now will be spoiled for choice, especially if they have a background in software engineering, operations, cyber security or data & analytics. Despite the need for headcount growth, it’s not however all good news for business owners in this space. The problem is, start-ups to global tech giants in-the-making hold a particularly poor track record when it comes to hiring, retaining and fostering long lasting company culture; the industry overall has the highest attrition rate at 13.2 per cent.
The ISL Retention Report – Tech Scaleups 2019 surveyed nearly 200 people who had left their post in the previous four months and found that more than 80 per cent cited the working environment as the key reason. Our own data shows hiring leadership for tech companies requires an alternative approach because fintech’s aren’t, by nature, designed to follow traditional management models. Most lack formal organisational design-thinking, leading to increased turnover in a market where retaining people is crucial to the disruption they seek to achieve.
Our experience places these fintech companies highest on the list when it comes to re-calibrating role profiles during the search process; 81 per cent of executive mandates for which we were retained in 2019 were changed more than twice during the course of the search. These businesses are consistently shifting strategy; therefore the role requirements tend to be evolutionary in keeping pace with the business.
Given these circumstances, how do we ensure search success and retention?
Being transparent: At the outset, paint a realistic picture of what working life will look like based on the trajectory and goals of the business. It takes a specific kind of person to thrive in an ambiguous and evolving Fintech environment, so it’s important to determine early those who can and those who can’t. During 2019, 63 per cent of our Fintech mandates did not leverage a traditional “job description” to present to candidates as the requirements and reporting structure were subject to fluidity. This scenario enables hiring organisations to quickly determine those who are comfortable in progressing unstructured opportunities.
Aligning culture: Determining cultural fit in tech is crucial as it is often the reason for high attrition. Firms like Google, Amazon and Facebook have been designing informal “meet-and-greet” events for those under job offer, or immediately after acceptance. Our data reflects that this type of pre-onboarding approach contributes to success within our Fintech clients.
To ensure cultural alignment, as a search partner, we advise our clients to run informal events for clients as part of the interview process and attribute much of our 92 per cent retention rate two years post-hire to this approach.
In the pre-IPO Fintech market, cash compensation is not the main motivator as one of the biggest attractions is an opportunity to take or earn a stake in the firm and financially benefit from the upside in the growth. 91 per cent of candidates we introduce are critically evaluating the following: the opportunity to build cutting edge, disruptive solutions; professional growth; entrepreneurial experience and equity stakes.
Stay Open-Minded: With the evolving role specification, the chances are that candidates introduced for one role, may end up being hired into another.
We recently placed a former Google executive into a fintech client, we originally introducing them for a chief of staff position however they were ultimately offered and accepted the role as CEO of the AI Platform Business as the client recognised their skillset was a unique blend that they could leverage better elsewhere. We partnered closely with client and candidate to best position this shift in search strategy and ensure the process was managed smoothly.
Those working in this market should acknowledge the environment and cultural aspects of the broader fintech world. The most exciting area of fintech we work within are for organisations that are “Blitzscaling” – investing quickly and heavily to dominate market share. In these environments, everyone does what is required, knowing that they are building something great with rewards to be shared. Both candidates and companies in this space need to adopt these key principles to build longer lasting relationships into the future of this ever-evolving market.