Does fintech have a problem holding onto talent?

I work for this cool Crypto fintech, but it’s chaos!  This sentiment is becoming increasingly common as opportunities within Fintech are on the rise, encouraging a continued candidate driven market. If you’re considering a new role right now in Fintech, you’d be spoiled for choice, especially if you 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%.

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% cited the working environment as the key reason. Our own data shows hiring leadership for tech companies requires a different approach because Fintech’s aren’t, by nature, designed to follow traditional management models. Most lack formal organizational design-thinking, leading to increased turnover in a market where retaining people is crucial to the disruption they seek to achieve.

Our experience places Fintech companies highest on the list when it comes to changing role profiles during the search process; 81% 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, candidate profiles tend to be evolutionary in keeping pace with the business.

Given these circumstances, how do we ensure search success and retention?

Honesty: At the outset, paint a realistic picture of what company 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 decipher early those who can and those who can’t. During 2019, 63% of our Fintech mandates did not leverage a traditional “job description” to present to candidates; the requirements and reporting structure were subject to fluidity. This scenario enables employers to quickly determine those who are comfortable progressing unstructured opportunities.

Chemistry: Determining cultural alignment in tech is crucial as it is often the reason for high attrition. Google, Amazon and Facebook have been curating 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, we religiously run informal events for clients as part of the interview process and attribute much of our 92% retention rate two years post-hire to this approach.

In the pre-IPO Fintech market, cash compensation is not the main motivator; it is the stake in and possible upside in the growth of these firms. 91% of candidates we introduce are critically evaluating the following: the opportunity to build cutting edge, disruptive solutions; professional growth; entrepreneurial experience and equity stakes.

Remain Open-Minded: With the evolving role specification, the chances are that candidates introduced for one role, may end up in another.

We recently placed a former Google executive into a Fintech client, originally introducing them for a Chief of Staff position. They were ultimately offered and accepted the role as CEO of the AI Platform Business as the client recognized their skillset was a unique blend. We partnered closely with client and candidate to best position this shift in search strategy.

Those working in this market should acknowledge the environment and cultural aspects of the broader Fintech market.  The most exciting area of Fintech we work within are for organizations 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. Are you ready for this journey?

Originally published in City A.M.