Lopez: What strategies are successful fintech organisations employing to attract and retain top talent amidst increasing competition from both traditional financial institutions and tech giants entering the space?
Goudsmit (Netherlands): Fintech companies seeking to fill high-skilled roles often leverage external experts to complement their internal hiring strategies, particularly for hard-to-fill skill sets. They also offer attractive salaries and benefits to entice the best talent. Moreover, successful fintech firms prioritize cultivating a strong and positive company culture that aligns with the values of potential employees. They invest in career development opportunities to retain talent and reduce attrition rates, while also focusing on building a robust employer brand that resonates with potential candidates and sets them apart from competitors.
Ignozzi (U.S.): With competition intensifying in the market and talent sought after by various sectors, fintech executives are becoming appealing targets for a range of companies, from startups to established financial institutions. To retain top talent, fintechs are implementing several strategies. One key approach is mobile empowerment, allowing employees to choose how and where they work—whether as digital nomads, hybrid workers, or fully remote. Many candidates prioritize the freedom to work in any location for cost-savings, efficiency, and work-life balance. Additionally, fintechs are responding to increased M&A activity by offering recruiting incentives such as payout incentives and exit acquisition strategy benefits. Incorporating market conditions into talent acquisition strategies is considered a best practice among many fintech companies.
Lopez: Given the expectation for increased M&A activity in 2024, how do you envision this impacting the recruitment and retention of senior executives in both acquiring and target companies?
Mejia (U.S.): The anticipated surge in M&A activity, driven by partnerships and fintech growth, is poised to reshape recruitment practices within the financial services sector. Companies will need to adapt their hiring strategies to attract top talent, address skill gaps resulting from industry transformations, and ensure successful integration post-merger or acquisition. Fintech firms involved in M&A activities will seek senior executives aligned with their post-transaction goals. With this uptick in M&A, senior executives experienced in navigating complex deals, integration processes, and change management will be crucial for success. Talent retention will be paramount to ensure long-term growth and a smooth transition. A strong cultural fit between senior executives and the company will also be essential for integration. Fintech companies will continue to require executives who thrive in ambiguity and uncertainty, are motivated by undefined challenges and potential rather than job security, and collaborate effectively to shape the business.
Lopez: In light of the reduced number of fintech IPOs in 2023, how might this impact the demand for executive talent in the fintech sector?
Pouplard (France): Amidst the tumultuous past 18 months, fintech experienced a significant decline in IPOs and M&A activity. Fintech, for instance, saw a decline of -76.1% YoY, representing $5.9 billion in VC exit value. Additionally, Fintech M&A activity dropped by -33.6% YoY to $47.1 billion in 2023. Valuations, in both public and private sectors, have recently been mean reverting.
Many fintech executives and candidates view exit strategies as a key part of the compensation model. Since there is pent up demand for fintech IPOs and an uncertain outlook; fintech talent is starting to view talent opportunities as longer-term employment horizon. Traditionally, high demand and low supply of fintech talent created retention issues where the average tenure was less than 3 years. As exit strategies and IPOs have been delayed, the average tenure of fintech executives is increasing. This means less talent movement and more stability for the executive team. As tenure increases companies need to shift by incorporating strategies that focus on talent engagement, learning and development.
Goudsmit (Netherlands): The reduced number of fintech IPOs may lead to increased demand for executive talent capable of navigating a challenging funding environment and guiding strategic pivots or alternative growth strategies. Professionals with strong finance and capital markets backgrounds may be sought after to explore other forms of fundraising and capital structuring. Furthermore, the shift from rapid growth to sustainable value creation will require executive talent capable of driving operational efficiencies and profitability. Additionally, the reduction in IPOs may heighten the need for candidates skilled in risk and compliance as fintechs prepare for a more regulated environment. Overall, the changing investment landscape may prompt a re-evaluation of the skills and experiences required in fintech leadership, with a stronger emphasis on strategic, financial, and operational expertise.
Ignozzi (U.S.): The reduced number of fintech IPOs has influenced the perception of exit strategies among fintech executives and candidates, leading to a longer-term outlook on employment opportunities. Traditionally, high demand and low supply of fintech talent contributed to retention issues, with average tenures less than 3 years. However, delayed exit strategies and IPOs have led to increased tenure among fintech executives, resulting in less talent movement and greater stability within executive teams. As tenure increases, companies need to adopt strategies focusing on talent engagement, learning, and development to effectively manage this shift.
