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One of the biggest challenges for any fintech business is unwanted talent churn. Replacing an employee costs thousands of dollars, sometimes at least half a year of that employee’s salary, according to Society for Human Resource Management. There’s a lot of labor that goes into attracting, engaging and hiring new staff members, such as mapping out their salaries and budgets. As such, it’s key for fintech startups, especially those that involve workers with specialized skills, to prioritize retaining talent.
Employers often underestimate the costs of recruiting and training a replacement worker. Furthermore, fintech founders often overlook the thousands of dollars they could save retaining employees for longer. Nearly 43% of employees surveyed by Ernest & Young in 2022 said they planned to leave their current employer within a year. Since the pandemic, fintech employee churn has become especially high in roles related to engineering and support.
In order for fintech founders to increase retention, consider how to invest in human capital so that the business can succeed.
Value Productivity Over Presenteeism
Fintech founders often pride themselves on their agility, flexibility and ability to respond quickly to market demands. Likewise, the ability of any company to reframe what the post-pandemic office looks like has been a defining factor that differentiates successful fintech startups.
Hybrid and remote work options remain popular and economical. These options reduce “presenteeism,” the act of showing up for work without being productive, generally because of 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 work policies. Managing teams can be challenging when they are not physically present together every day, especially if they have not previously worked in such a manner. The firms that have the lowest churn rates are those that use models that suit their teams. Prioritize productivity, not merely 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 recognition, remote coaching, mentorship and leadership, all in addition to in-person strategies or processes. Firms that reduce presenteeism often see an increase in employee confidence and productivity that exceeds the original expectations. According to The International Labour Organization, flexible workplace policies can lead to more positive business outcomes. When productivity is the main driver, stretch performances become more common.
Create A Fearless Company Culture
The ongoing process of creating the fintech startup’s company culture is something that everyone on the team should feel part of. All employees should be asked their opinion and offered clarity on why the company will, or won’t, take action based on those opinions. When practiced routinely, companywide communication allows for a culture of resilience and positive growth.
The fintech world, in particular, is all about change, adaptability and agility. Using those principles to guide the company culture creation process 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 the fear of retribution.
The main reasons people leave businesses 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.
Growth Can Be Horizontal Or Diagonal
Finally, it’s important to regularly assess each employee’s career progression and skills development since they were hired. Growth is not only vertical.
Many fintechs now offer multiple opportunities for growth and advancement. They hire employees who have started in one role and then progressed to another. Examples are most often seen with support staff rising through the ranks to become client services or C-level executives. This is also true for engineers moving into DevOps and then infrastructure or coders moving into client-facing roles. When aware that personal productivity and growth directly contributes to the success of the company, it fosters a sense of loyalty. As a fintech company grows, its business needs also expand. A report by Ernst and Young in 2021 highlights the rapidly changing requirements of a developing fintech, suggesting that even the original founders may not have the skills necessary to meet future demands. Every employee’s skills should be regularly evaluated and every employer should be willing to shift individuals and their growing skill sets to meet the evolving needs of the business.
Any fintech founder who follows these three tips to prioritize productivity, foster a company culture of open communication, and actively evaluating employee skill levels along with growth opportunities, will retain more talent and grow the fintech startup’s in-house human capital.
Human capital in a growing fintech is a critical asset that can help the company innovate, adapt to changes, and achieve its goals. When a fintech startup has a fearless culture around communication, the corresponding teams are often fearless in their ideation and innovation as well.
