3 tips to retain Fintech talent and invest in human capital

3 tips to retain Fintech talent and invest in human capital

One of the biggest challenges for any fintech company is unwanted talent attrition. Replacing an employee costs thousands of dollars, sometimes at least half the employee’s salary, according to the Society for Human Resource Management. There is a lot of labor involved in attracting, engaging and hiring new employees, for example mapping salaries and budgets. As such, it is key for fintech startups, especially those involving workers with specialized skills, to prioritize talent retention.

Employers often underestimate the costs of recruiting and training a replacement. Also, fintech entrepreneurs often overlook the thousands of dollars they can save by retaining employees longer. Almost 43% of employees surveyed by Ernest & Young in 2022 said they planned to leave their current employer within a year. Since the pandemic, the turnover of fintech employees has been particularly high in roles related to engineering and support.

For fintech entrepreneurs to increase retention, consider how to invest in human capital to help the business succeed.

Value productivity over presenteeism

Fintech entrepreneurs often pride themselves on their agility, flexibility and ability to respond quickly to market demands. Likewise, any company’s ability to reshape what the post-pandemic office looks like has been a defining factor that differentiates successful fintech startups.

Hybrid and telecommuting options remain popular and economical. These options reduce “presenteeism,” the act of showing up for work without being productive, usually due to tradition, habit, illness, or expectation. The concept of presenteeism was described by the Harvard Business Review as someone being physically there but not performing at their best.

On the other hand, some companies struggle with remote working guidelines. Leading teams can be challenging when they are not physically present together every day, especially if they have not previously worked in such a way. The companies with the lowest churn rates are those that use models that fit their teams. Prioritize productivity, not just attendance.

Fintech companies with distributed teams must offer managers training on how to manage people accordingly, including remote or hybrid work environments. This can include a focus on remote sensing, external coaching, mentorship and leadership, all in addition to personal strategies or processes. Companies that reduce presenteeism often see an increase in employee confidence and productivity that exceeds initial expectations. According to The International Labor Organization, flexible workplace policies can lead to more positive business outcomes. When productivity is the main driver, stretch performance becomes more common.

Create a fearless corporate culture

The ongoing process of creating the fintech startup’s corporate culture is something that everyone on the team should feel a part of. All employees should be asked for their opinion and offered clarity as to why the company will, or will not, take action based on these opinions. When practiced routinely, enterprise-wide communication enables a culture of resilience and positive growth.

The fintech world in particular is all about change, adaptability and agility. Using these principles to guide the process of creating corporate culture builds a great environment for employees seeking long-term career growth. Being fearless in the pursuit of open communication allows for disagreement or conflict resolution without fear of retaliation.

The main reasons why people leave companies are usually associated with uncertainty. Transparent communication is best when the message is sent multiple times through multiple formats. This can be seen from announcements to emails and one-on-one conversations, allowing for questions and openly welcoming feedback.

The growth can be horizontal or diagonal

Finally, it is important to regularly assess each employee’s career progression and skill development since they were hired. Growth is not just vertical.

Many fintechs now offer more opportunities for growth and advancement. They hire employees who have started in one role and then moved on to another. Examples are most often seen with support staff rising through the ranks to become client services or C-level managers. This also applies to engineers moving into DevOps and then infrastructure or coders moving into client-facing roles. Realizing that personal productivity and growth directly contributes to the company’s success fosters a sense of loyalty. As a fintech company grows, so do its business needs. A 2021 Ernst and Young report highlights the rapidly changing demands of an evolving fintech, suggesting that even the original founders may not have the skills necessary to meet future demands. Each employee’s skills should be evaluated regularly, and each employer should be willing to shift individuals and their growing skill sets to meet the evolving needs of the business.

Any fintech entrepreneur who follows these three tips to prioritize productivity, foster a company culture of open communication, and actively evaluate employee skill levels along with growth opportunities will retain more talent and grow the fintech startup’s internal human capital.

Human capital in a growing fintech is a critical resource that can help the company innovate, adapt to change and achieve its goals. When a fintech startup has a fearless culture around communication, the corresponding teams are often also fearless in ideas and innovation.

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