In recent months, banking, financial, and fintech companies are actively laying off their staff to survive the economic downturn. For example, Stripe, one of the leading US fintech unicorns, slashed 14% of its jobs and cut its valuation to $63 billion. PayPal also laid off 2,000 employees to adapt to a challenging business environment. With so many fintech professionals being let go, will talent acquisition for fintech become easier in 2023?
The answer is no. The fintech industry keeps growing. Its market evaluation grew from $105 billion in 2021 to $132 billion in 2022, and it is expected to reach $165 billion in 2023, according to the Market Data Forecast report. This means there are thousands of fintech projects. And these projects need teams. So, the competition in fintech talent retention and acquisition remains fierce.
In this article, we’ll take a closer look at the situation in fintech recruitment in 2023. We’ll also discuss the challenges businesses face and outline best practices that allow companies to hire and retain the best talent despite market instability.
The fintech job market: A general overview
The fintech market grew rapidly during the COVID-19 pandemic. The World Bank’s fintech report from 2020 stated that fintech companies saw 13% year-over-year growth in transaction numbers. Naturally, this resulted in high demand for fintech talent, and as of the end of 2021, there were more than 300,000 people employed by fintech companies across the globe.
The trend continued, and the beginning of 2022 saw North American banking entities with booming fintech vacancies — 72% of all open fintech roles in retail banking came from the US and Canada. There were over 40,000 fintech companies in Europe, with nearly 8,000 open vacancies in 2021.
However, this rampant growth slowed down when the US Federal Reserve System increased interest rates to combat galloping inflation. Borrowing and investment became much more costly, which forced Big Tech and the rest of the market players to reduce their headcounts which had become bloated during the COVID-19 pandemic.
As a result, we see massive layoffs happening at tech startups, scale-ups, and established IT companies, including fintech: 140,000 jobs were slashed in 2022 and more are sure to come.
But these big tech layoffs still aren’t enough to change the global situation in the fintech job market. People are still using apps to receive and transfer money, issue payments, and manage their finances — and will continue to do so for the foreseeable future. So, there are a lot of fintech products or services that need professionals to maintain and enhance them. Meanwhile, natural employee turnover still happens, which means fintech companies are looking for new hires.
Also, retail banks, which are more stable than VC-funded IT companies, are now using the economic situation to catch up on fintech initiatives. The wages are not sky-high — but they are constantly looking for fintech talent, creating competition for the fintech industry.
So, although hiring has dropped in general, there are still plenty of open positions in fintech, and hiring fintech talent can still be quite hard. For example, there were about 11,000 fintech vacancies on Indeed (US) alone as of February 2023. That’s a big figure for one niche in the entire tech industry amidst harsh economic conditions.
Let’s take a closer look at what job roles are most demanded in fintech.
The most in-demand roles in fintech
Fintech is a broad niche, and companies operating in it require the involvement of a wide range of specialists. The most popular fintech job roles include software developers, operational personnel, data analysts, and cybersecurity specialists. Let’s look at the situation within each of these categories in more detail.
In addition to the employees already laid off, about 40,000 more might lose their jobs in the first quarter of 2023 based on expert opinion voiced at TechCrunch.
However, the shortage of top software engineers still remains. And it's no wonder. Software development is the backbone of any industry now, fintech in particular. Top-performing developers are either safe in their current positions — or can get new offers shortly after being laid off.
On top of that, most industries, from banking to logistics, agriculture, and education, are actively adopting technologies. Naturally, they require tech expertise to build new products or maintain existing ones. So, we can expect that the demand for top tech talent will only get stronger.
On top of being well-versed in software engineering, fintech tech workers are required to have extensive industry knowledge, including knowledge of regulatory nuances. This makes finding the suitable candidate for software engineering positions in fintech even more challenging.
So, as of today, no market conditions give us reason to believe that finding top software engineers specializing in fintech will become noticeably easier in the foreseeable future. Big tech layoffs have not saturated the job market with qualified tech talent. Top software engineers can still pick and choose. This means you will still have to work hard to get them to work for you. The current market situation may only simplify the recruitment process of junior tech workers and fresh graduates.
Today, businesses focus more on filling mission-critical roles first. It means that organizations are now analyzing what departments and roles are most crucial to their survival.
For example, data from 365DataScience showcases that 27.8% of job cuts were in HR & recruitment. This figure can be easily explained: with the pandemic hiring spree stopped, internal recruiters are not needed as much. Marketing (7.1%), customer support (4.6%), and PR & advertising (4.4%) are also affected, as IT companies cut expenses on wages.
However, this doesn’t mean that all employees of operational departments are equally affected. Fintech companies still need operational personnel to maintain their business activities. From consumer operations to product management, insurance, risk mitigation, fraud prevention, governance, legal and compliance — these tasks need to be covered. This means that key employees with valuable expertise will still retain their jobs.
This once again proves that while general roles (HR, marketing. customer support, etc.) will see an influx of candidates, top talent responsible for mission-critical operations will be harder to find than ever.
Fintech is 300 times more likely to be hit by ransomware and other forms of fraud. The average cost of a cybersecurity breach in fintech in 2022 was close to $6 million worldwide. According to a 2022 Cybersecurity Skills Gap report from Fortinet, 80% of breaches happened because there was insufficient cybersecurity expertise in place.
Given these numbers, fintech companies will likely want to strengthen their cybersecurity, which will be reflected in how they allocate their costs. For example, a quarter of surveyed global companies increased their cybersecurity budgets by 6-10% in 2022. The data for 2023 is not yet available. But with the number of cyberattacks constantly increasing, it’s reasonable to predict that these budgets will stay, if not grow, this year.
Alongside these factors, the 2022 Cybersecurity Skills Gap report shows that 60% of tech firms struggle to recruit cybersecurity specialists, and 52% find it hard to retain them. So, hiring top talent in this sector is complicated, with top specialists able to take their pick of plum jobs and work conditions.
It might seem that the data science job market is disappearing in fear of the recession — but it cannot be further from the truth. The higher-paying role of a data scientist is rapidly being replaced by more specialized roles, such as:
- data engineers
- data analysts
- data automation engineers
- business intelligence analysts, etc.
As of February 2023, there were nearly 25,000 open vacancies on Indeed for data analysts in the US. It means that finding a good specialist in this niche is still quite hard.
But the competition is not the only challenge in fintech talent acquisition. In the next section, we’ll discuss other obstacles you might face.
Challenges of hiring top fintech talent
Closing open positions with the best candidates at the optimal cost isn’t easy in all industries, and fintech is no exception. Let’s now take a closer look at the key challenges of fintech recruitment in 2023.
Shortage of tech talent with appropriate skill sets
There already are 100,000 unfilled vacancies with the specific skill sets and experience needed to work in the tech industry, and over 17,000 job openings were added in January 2023 in the US alone. Meanwhile, approximately 70% of Nash Squared’s Digital Leadership Report respondents stated that “a skills shortage prevents them from keeping up with the change.”
In fintech, the talent shortage problem is particularly severe. First, fintech skill sets are not easy to come by outside of the industry. Second, skilled fintech specialists can seek stable jobs in other sectors not susceptible to VC funding cuts, perhaps shifting to retail banking, agriculture, logistics, and other market segments. As a result, fintech companies need to compete both between themselves and other industries to attract and retain top talent.
This means that successful hiring in the fintech job market demands a sophisticated recruitment process and tactics. Companies should dedicate significant resources if they want to hire really skilled candidates. They must know where to look, how to pique their interest, and how to tip the scales in the company’s favor. All of this requires effort and experience in fintech recruitment.
Validating the candidate’s expertise
As we’ve shown, top talents and mission-critical roles are less affected by layoffs. This means that the brunt of the job losses falls on junior specialists (who are not top performers and are most likely greenhorns at their jobs) and mid-level talents (who had not had the chance to become mission-critical in their roles yet).
We can expect that these categories of candidates will most actively look for jobs and might apply to more senior-level positions. Thus, correctly validating the candidate’s expertise level will be one of the most common (and complex) recruitment challenges amid the economic downturn period.
Meeting the candidates’ expectations
Whatever great goal your product or services pursue, remuneration levels remain one of the key features influencing the choice of employer.
While top fintech talents usually have quite high salary expectations, they also expect various perks and benefits. Pension payments, 401k plans, free lunches and snacks in the office, gym memberships, paid paternal/maternal leave, legal assistance, and various types of health insurance — the list of perks fintech talent expects to receive can be quite lengthy.
With tight budgets, fintech IT companies might need help to offer competitive compensation/perks packages in crowded markets like the US, Canada, the UK, or Switzerland.
Retaining top talent within the company
Simply attracting talent is not enough, though. As many as 50% of fintech workers were planning to change their job in 2022. Why?
The reasons are similar to those existing in other industries. Employees want bigger paychecks, flexible work schedules and locations, and career advancement opportunities. At the same time, employers try to ply their teams with educational opportunities, flexible office working hours, and well-being perks like gyms or medical insurance.
Factors that influence talent retention also include the company’s policy of building a more inclusive workforce, leaning on tech roles for guidance on business decisions, forming employee resource groups and mentorship programs to help talents advance their careers, and transitioning to fully remote work.
This is in stark contrast with strategies and policies in many companies. The gap between what talents want and what companies offer is huge, which poses a serious challenge in fintech talent retention.
These challenges are quite serious but not insurmountable. Here are the best recruitment practices followed by leading fintech companies.
Best practices & trends in fintech recruitment
While attracting and retaining top talent is hard — it is totally doable if you understand the talent market dynamics and the factors influencing it and know where to look. Below are the 2023 market trends and best practices for fintech recruiting.
Hiring from locations with proven expertise in your niche
While the talent shortage remains an essential challenge, there is an important factor differentiating the job market in 2023 from the previous years. As the global economic recession looms on the horizon, fintech IT companies are striving to keep budgets slim, even on talent acquisition.
To achieve this, US, EU, and UK companies are increasingly looking to Eastern Europe, Transcaucasia, and Latin America. According to Nash Squared’s Digital Leadership Report, 60% of respondents said that as the cost of living is rising, their workforce is looking for salaries to keep in line, which is becoming unsustainable. And 25% of IT companies have started recruiting from overseas to satisfy talent shortage while staying within reasonable cost limits.
Remote hiring solves a lot of problems and challenges:
> First, it enables you to tap into a diverse talent pool. There are many countries with a large number of tech experts that can provide fintech talent if there is a shortage in your local market.
> Second, the best alternative to hiring in a highly competitive market is offering competitive salary levels with fewer perks in other markets. There are markets where the cost of living is much lower than in the US, Canada, the UK, or Switzerland, so it’s easier to meet candidates’ salary expectations there.
> On top of that, remote hiring fosters building an inclusive workforce, with people more dedicated to achieving company goals. When talents from different countries and with varying backgrounds are appraised for their contributions, they try to deliver even better results. Inclusivity results in happier workers and better performance, which is essential amidst the economic downturn.
Many prominent IT companies follow this approach and hire talent from around the globe — from Booking and Dolby to Atlassian and TikTok.
Searching within IT clusters
If you are considering remote hiring, it makes sense to search for the required talent within established IT clusters. When lots of companies in a certain area work on fintech projects, tech professionals have a ton of opportunities to gain valuable skills, master new tools, and use innovative technologies.
For example, regions like Poland, Ukraine, Romania, and Transcaucasia have built big pools of skilled software engineers, as shown in multiple HackerRank and Pentalog reports.
These countries are well-known for their tech expertise, as they house international R&D centers for Fortune 500 companies and organize conferences, hackathons, and panel discussions. Developers there follow the Western business culture and are mostly fluent in English. This helps build numerous vibrant communities that can provide talent for any innovative fintech project.
Summing up, it makes sense to look for talent in regions where this talent is present. And many companies are already actively looking outside of the US IT hubs.
Tracking political and economical factors influencing relocation possibilities
The world is quite unstable in 2023, with the Russian invasion of Ukraine, the war-induced energy crisis, earthquakes in Turkey and Romania, tensions between China and Taiwan, and other economic and political factors in regions across the globe. Hundreds of thousands of people with in-demand qualifications have lost their jobs and are now actively searching for new ones.
To find fintech talent, you should understand where to look for a workforce ready and willing to apply for your job openings and what conditions to offer to different candidates. Understanding the current geopolitical situation will help secure successful hires from outside competitive IT hubs like the US, UK, and Western Europe.
Getting professional assistance from an external service provider
In-house hiring teams are usually well-versed in the factors and conditions of their local markets — but are not as proficient with global recruitment. Even if recruiters do know all the ins and outs of hiring in a particular location, searching for talent can take quite some time. So many IT companies partner with professional recruitment agencies.
In addition to reducing the workload for your internal team, professional recruiters bring other benefits to the table. They know how to make your offer competitive and overcome any challenges in target markets, where to look for relevant talent, and how to get their attention. Also, professional recruiters have experience in correctly validating tech backgrounds and can help hire talent with the right cultural fit. This approach can help provide better results in fintech recruitment.
Indigo Tech Recruiters is glad to lend a hand to fintech companies in search of top talent worldwide. We provide a full cycle of recruitment services to find the best talents from Europe, Latin America, and globally.
2023 promises to be a turbulent year for fintech top talent acquisition and retention. You’ll have to implement well-thought-out hiring strategies to be able to snatch up great candidates in this environment.
To overcome talent shortage, hire relevant expertise, be competitive, and successfully retain talent in 2023 and beyond, you should be open to hiring from other countries with fintech expertise, search for talent within IT clusters and keep an eye on the changing geopolitical and economic conditions across the globe.
The best way to make this happen is to hire a professional recruitment agency like Indigo Tech Recruiters to do all the heavy lifting. Our expertise in fintech recruitment enables us to find the best match for your needs.