Global Talent Shortage Threatens Growth of Fintech Sector

• 182% growth in tech roles within fintech – 3x pace of the general market.

• 90% of all fintech roles come from 8 ‘mega-hubs’.

• 1 in 3 new hires within fintech’s around the globe is software engineers & developers.

• Less than a quarter of the global fintech talent pool is female – lagging behind banking & technology.

Fast-scaling Nature of Fintech Means Average Tenure For Employees in 18 Months

The global fintech sector has seen an exceptional +182% increase in tech job growth for the first quarter of 2022 – with the top 8 fintech ‘mega-hubs’ accounting for over 90% of all new fintech jobs advertised around the globe.

The findings – from recruitment firm Robert Walters’ Global Fintech Talent Report – highlight how the fintech industry is one of the fastest-growing sectors post-pandemic, outperforming the wider market by 3x.

However, according to recruiter Robert Walters, the sector will face major hurdles this year as an acute tech talent shortage around the globe threatens to halt the fintech growth machine.

Toby Fowlston, CEO of Robert Walters comments:

“The forecast for organisations working in the global fintech market is a very positive one, however, their growth will be dependent on their ability to recruit and retain the right tech talent.

“The most advanced economies have long established that they cannot be ‘good at everything and instead have focussed their efforts on becoming specialists in a few core areas.

“For example – you have Germany for engineering, China for manufacturing, and the UK for banking. But no country quite has dominance over technology and given the remote & mobile nature of the tech industry, it seems that all major economies are competing for a slice of the fintech pie.

“Whilst the outcome of competition means heightened innovation and consumer choice, from a talent perspective this creates a challenge and as the adoption of fintech products continues to grow at an exceptional rate the concern is whether there is enough of the right tech talent to keep up with the growth.”

Robert Walters’ Global Fintech Talent Report considers various factors across geographies impacting talent attraction including skills in demand, retention levels, gender diversity, salary and VC investment.

UK vs Rest of the World

• VC Funding: The UK is behind only the USA when it comes to fintech funding – attracting $4bn in the past year, on par with tech giants China and Japan.

• Fintech Activity: With almost just as many active fintech firms as the USA – standing at over 1,500 – London continues to play an attractive home for fintech HQs, with surrounding areas such as Manchester and Birmingham proving to be attractive locations for satellite offices.

• Talent Landscape: Vacancies have grown year on year within fintech (+136%), with the UK fintech hiring predominately at the senior end of the market to accommodate the fast-scaling nature of the market.

Toby adds: “Exit strategies for UK fintech are front of mind and so it is not uncommon for professionals to move on to another role within 1.5 years once they have seen through one major growth cycle or investment round.”

Year-on-Year Job Growth in Fintech

The USA has seen the biggest jump in new tech jobs within fintech – illustrating a +223% increase across the board, with the majority of this growth in New York (+246%) and San Francisco (+200%).

Second in the running for job growth is Japan (+214%) – where blockchain technology represents almost a third of all fintech companies in the country as cryptocurrencies transactions continue to grow (+51%).

Toby comments: “Technology professionals is one of the most mobile talent communities in the world, and they naturally draw towards hubs or hives of activity where their skillset will continue to be in-demand and paid well.

“Now that travel and entry restrictions around the globe are fast disappearing it won’t be surprising to see a significant migration of talent toward the 8 fintech hubs.”

Top 8 Fintech ‘Mega-Hubs’ Ranked by Job Growth

According to the report, the most in-demand roles within fintech across the globe are software engineering & development – accounting for a third of all job roles advertised by fintech.

With San Francisco (40%), New York (33%), and Singapore (33%) all hiring en-masse for developers, it is clear to see which countries are heading into greater levels of disruptive innovation where we will see the emergence of fintech-as-a-service, hybrid cloud platforms, embedded finance, as well as a hyper-focus on customer experience.

Toby adds: “The increasing digitalisation of all sectors has meant that software development is in demand across almost any industry. With the technology behind fintech advancing at astronomical levels, the high level of specialism needed from developers is certainly being reflected in inflated salaries.”

Falling Behind on Diversity

Currently, less than a quarter of the global fintech talent is female – a stark contrast to the growing representation of female professionals in technology and financial services, which now stands at over a third. San Francisco fintech appears to have the most gender-diverse teams – with 28% female representation.

Toby adds: “It makes little sense why the representation of women within fintech is so low – in particular considering the difficulty in finding candidates. Fast-growing start-ups need to look beyond ‘quirky’ soft perks and consider adding more meaningful benefits that may attract female professionals.”

Survey findings from Robert Walters have found that females are more likely to assess company & job security, diversity policies, and enhanced maternity packages before applying for a job.

Retention Rates

Healthy employee retention rates are crucial to the financial performance of a company. Research indicates that the average cost of employee turnover is around £11,000 per person – and for specialist roles, the turnover cost can be significantly higher due to the amount of time and money that an organisation spends to train them.

According to Robert Walters analysts, fintech firms should try to aim to keep employees for at least 18 months – to 2 years, if they are to get maximum potential all whilst keeping a channel open for fresh people and ideas.

Currently, just New York, the Netherlands and San Francisco are able to retain their employees on average for 18months+, with fintech start-ups in other countries failing to keep new hires engaged for long enough.

Toby comments: “Excessive turnover drives up costs and diverts time and attention from the goals of a fast-growing start-up. For fintech that are more established, high turnover of staff can lead to a loss of institutional knowledge and hinder efforts to foster a workplace culture.

“Fortunately, most of the drivers behind employee turnover are preventable and fixable. Steps to reduce turnover include rethinking recruiting strategies, enhancing career advancement opportunities and providing more training and development offerings.”

Download a copy of Robert Walters’ Global Fintech Talent Report.

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