Waves of funding cuts and bad news about employee layoffs are battering the fintech world. In just the first five months of 2023, more than 168,000 people lost their jobs in tech, more than the whole of 2022.
Some of the biggest names in fintech – including Stripe, PayPal and Klarna – and small start-ups alike have had to slash their teams as they battle to stay afloat in choppy waters.
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Fintechs are battling for profitability that can fund new product and service development, but also sustain workforces with attractive pay and conditions, and the potential for further skills development. But without the right people in place, they cannot develop and launch the services they need to serve market demand and grow. It’s a particularly vicious circle.
With rampant consumer and B2B adoption of new payment services driving global e-commerce transaction value up 10% to reach nearly $6trn in 2022, the growing hunger for new, sleek payment services means fintechs will come under even more pressure to innovate faster, at lower cost, and meet increasing regulatory demands at the same time – and with less resources in the face of continuing economic turbulence.
The fintech industry is not alone in having to re-anchor amid the global turbulent economic storm, but the sheer scale of job losses could have a direct impact on the speed of innovation – and the pool of creativity from which to draw new ideas.
What are the unique needs of fintechs compared to other techs?
It’s not as if there’s a shortage of recruitment companies or agencies. Overall, the tech world is well-served by tech-focused recruiters. But fintech recruitment occupies its own unique niche and is acutely underserved, with a constant shortage of specialised knowledge and talent. Generic tech recruiters lack the deep-dive expertise and industry contacts to fill complex roles in fintech segments such as payments, processing, acquiring, orchestration, compliance, UX, risk & fraud management and other areas in high demand.
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By GlobalDataAdditionally, generic tech recruiters are largely localised and segmented as agency or consultancy, and lack the global breadth of coverage and networks needed to find and place talent where it needs to be. Right now, fintechs are being forced to source help from multiple providers, with all the associated time-consuming administrative complications of managing multiple relationships.
This leaves fintechs with extremely slow and costly hiring processes, at a time when competition for talent has never been so urgent. Slow hiring processes and increased staff turnover can damage business reputation and make it more difficult to attract top talent in the future.
The cost of a mis-hire
The cost of a mis-hire can lead up to a 10-fold cost of the annual salary, including time spent by different people on hiring, onboarding, the salary itself, missed deadlines and lost revenues. Those costs can increase further if working with multiple, unspecialised agencies. And that adds up to missed opportunities for future growth and negative impacts on customer experiences.
With no specialised knowledge of the industry, recruiters have limited capabilities for employee screening and can only reach candidates actively looking for work. With so many fintechs requiring teams for one-off ad-hoc projects, or new teams in a newly-defined niche or location, these needs become even more pressing, and require new levels of connections and flexibility that generic recruiters simply don’t possess.
Fintech recruitment is ripe for reinvention
What’s clear is that as technology advances at warp speed, to keep pushing the boundaries of what’s possible in payments, fintechs need to find and keep the right talent. But as fintechs big and small are forced to become smaller, leaner and fitter, and compete for a dwindling talent pool, another opportunity for innovation is presenting itself. And one that could have a transformational and profoundly positive change on the fintech industry as a whole.
Innovation doesn’t just mean creating dazzling new payment services – the way the firms recruit and retain their staff is also ripe for reinvention. Instead of down-sizing, fintechs now have a chance to right-size – to find, train and retain the right people with the right skills to ensure future growth and success.
The economic, operational and innovation advantages of getting recruitment processes right as soon as possible are clear, and have never been more critical to ensure continued success. Investing in employee training and upskilling can lead to a significant increase in revenues and productivity. Companies that invest in employee training on average see a 218% ROI, and lower turnover rate, while employees who receive regular training are more than twice as likely to be engaged with their work.
Diversity and inclusion are not buzzwords
Diversity and inclusion are not buzzwords – they drive success. Every available piece of data shows that when fintechs are welcoming and collaborative places to work, employees thrive, and their employers become so much more attractive to potential employees. When firms gain a reputation for great conditions and inclusive working environments, they will attract the brightest and best talent who will spark the ingenious ideas to drive continued innovation. But that means recruitment processes need to be fair and inclusive too. In today’s world of hybrid work, companies need faster and lower-cost hiring processes, including the capability to conduct remote candidate assessment, remote onboarding and remote training.
Targeted and streamlined recruitment processes can free up fintechs to create more positive brand images, forge deeper employee connections, and ensure continuous people development. With those game-changing capabilities in place, fintechs can enjoy lower operational costs, improve productivity and workflows, and ensure consistency in providing great customer experiences.
Reframing the recruitment process
Right now, with the cost-of-living crisis preying on the minds of many, employees will be suffering from lack of certainty, a growing sense of job insecurity and anxiety. If the fintech industry wants to deliver on its mission of being a force for good in the world, it needs to re-focus on the people who make the payment products and services we all depend on.
Companies need to look after the whole person, not just the employee. By reframing their recruitment processes with intuitive and holistic oversight at every step, fintechs can find the people they need to not just survive, but thrive well into the future.
Bram Vreugdenhil is co-Founder & MD, PaymentGenes Recruitment
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