Fintechs are getting far more choosy about who they hire
Things aren't like they used to be for the fintech industry. Fintech firms are still hiring, but they're getting a lot more choosy about who they recruit.
Deepali Vyas, Global Head of FinTech, Payments, Crypto & Applied Intelligence for Kornferry in New York, says candidates for fintech jobs no longer have multiple offers. The supply of fintech roles is shrinking.
It's easy to see why the fintech industry has lost its spring. CB Insights says fintech funding fell 18% year-on-year in the first quarter, to reach its lowest level since 2018. Banking fintechs specifically experienced a 48% drop in funding. James Gorman, CEO of Morgan Stanley, says the fintech space is heading for "a little bit of a washout" after companies had been trading at valuations the bank "could only dream of." Consolidation is coming to fintech, said Gorman. And consolidation usually means job cuts. “A lot of leaving will be happening,” says Vyas.
As the uncertainty sets in, Vyas suggests people in fintech are more wiling to move jobs. In the past, candidates with stock options were difficult to persuade into new roles. Now that valuations have fallen massively, the willingness to contemplate alternatives has increased. And Vyas says fintechs are, "taking advantage of some of the talent that’s on the market that wouldn’t have been before.”
No one wants to jump from one shaky fintech to another though. With candidates skeptical about stock valuations, Vyas says fintechs are under pressure to pay higher salaries, which could in itself increase the pressure on their cash flow. To overcome this, she suggests awarding candidates "milestone bonuses" for sticking around and "equity refreshes" with additional stock to reward achievement (or compensate for a falling share price).
While some people are still being lured into new fintech jobs by the compensation, the real selling point of fintech careers is lifestyle. Banks want people in the office and are demanding non-hybrid working practices, says Vyas. Fintechs, however, have the "agility and nimbleness" to create a hybrid environment. Some, like Revolut, allow employees to work where they want within their home countries.
As fintech hiring slumps, Vyas says smaller firms are better placed to recruit. Salaries are no longer "over-inflated." Early stage fintechs can be especially interested in people from traditional finance, she added. - They need to build their institutional knowledge.
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