In stark contrast to traditional financial companies such as banks and old-school insurance companies, fintech companies are innovators and disruptors that are revolutionizing the financial services industry.
With technology at the very core of these companies, HR needs to keep up with modern HR practices and platforms when attracting, engaging and retaining talent. With this in mind, we have defined 5 challenges faced by HR professionals working in fintech:
1. Hiring and retaining the best talent
As the fastest-growing segment of the workforce, and as digital natives possessing the technological skills that fintech companies seek, millennials are in high demand by fintech companies. To attract this talent pool, attractive starting salaries and bonuses are high on the agenda.
However, it is also no secret that millennials are prone to job-hopping every two to three years, leaving their jobs for positions offering superior growth opportunities or higher salaries. There are high costs associated with employee turnover; therefore, fintech companies must employ retention strategies aligning with what millennials value. These perks go beyond monetary compensation and include professional development workshops, learning and development opportunities, and providing great company culture.
2. Empowering and engaging your people
The traditional role of HR, people management, and admin tasks has undergone an evolution. While these tasks are still needed and relevant, HR departments in modern tech companies have shifted their focus to managing employee engagement and building culture. Company culture is considered very important by today’s workers, particularly millennials who make up a large proportion of fintech employees.
Recognizing this need, tech companies have started hiring CPOs (Chief People Officer)/CHROs (Chief Human Resources Offices). This role focuses on employee engagement rather than paperwork. CPOs oversee building the company culture and ensuring that the correct processes are in place that engages and empowers the people.
3. Defining the company’s values and mission
The mission statement and company values should not just be a sign hanging up in the kitchen or meeting room. It should be authentic, state the company’s overall goals and values and its code of conduct. Above all, these standards should be enforced and become part of the company culture.
According to LinkedIn’s Workplace Culture report, 86% of millennials would take a pay cut to work at a company that they feel has values that align with their own. By comparison, only 9% of baby boomers would do the same.
Defining and enforcing their company values enables fintech and other tech companies to differentiate themselves in the market and eliminate the many challenges that accompany a modern digital workforce, such as absenteeism, productivity loss, and employee turnover.
HR in modern fintech companies cannot take company culture lightly and need to help drive it even when most of the company works remotely. Their teams expect to work for a collaborative company with a strong, cohesive culture they can be proud of.
4. Grooming the leaders of tomorrow
A company is only as good as its leadership, and HR departments are tasked with continuously finding, training, and preparing tomorrow’s leaders. Since fintech companies are mostly young and modern, it is very hard to fill management positions with people from other industries.
Fintech companies need to look to the future, creating internal programs for learning and development, and building mentoring programs between managers and employees, which foster an environment that sets up its people for success.
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5. Implementing a modern, technologically driven HRIS
Fintech companies are innovative technology leaders. This emphasis on technology must also be reflected in how their HR departments manage their processes and their people.
A modern people management platform should incorporate all aspects of human resource management, such as culture, engagement, core HR processes, compensation management, and performance management. It should operate as the core of the company, used by HR and employees alike, and put individual employee growth at the front and center.
Make sure that the technology you use within your organization reflects the innovation of your product.
The days of offering employees a salary and a basic benefits package are long gone. Today’s candidates and employees have aspirations and expectations that are very clear-cut, and tech companies who want to attract and retain the most talented people need to get with the times and start to carve out an HR strategy that aligns with this new reality.
From David Sussely
David, HiBob's CFO, is a skilled finance executive, highly experienced in fast-growing, global companies in diverse industries including hi-tech, software, biotech, and manufacturing. He holds extensive experience in M&A transactions, information systems implementations, global finance, and operations management.