Large legacy financial institutions are scrambling to become technology powerhouses, competing for software expertise to create user-friendly apps and convenient digital service. Smaller startups — most of them “fintechs”— make up some of the fastest-growing companies in the U.S., and are hiring in droves. In the face of such competition, how can companies attract the best tech talent?
Based on our hiring activity data and what we’re hearing from financial clients, here’s how banks and credit unions can gain an advantage over competitors.
Update Your Work and Pay Structures
When Covid-19 shifted much of Wall Street to remote work, some employees loved it — software developers, especially, don’t want to go back to an office, according to our firm’s research.
Now, institutions from big banks to regional credit unions are thinking about how they can offer more flexible work structures. In fact, employers who haven’t started thinking about this yet are already behind. Larger, traditional financial institutions are still bristling at the idea of remote work — Accenture research indicates that many want tech staff to come in four or five days a week — giving an edge to modern fintechs who are happy to save on real estate costs and give candidates what they prefer.
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Consider that this is a candidate’s market, so larger financial institutions should consider a hybrid work model for their tech talent, which benefits more than the engineer. It allows employers to tap into a global talent pool.
If you want tech staff to report to an office, think about how to make your setup more attractive to candidates. For example, our research has shown that software engineers generally dislike open concept offices. Going all-remote? Invest in key home office perks, like company-provided standing desks.
The issue of pay and location must be considered. Should, for example, a Bay Area fintech have to pay Bay Area salaries to employees who are working in markets with lower costs of living?
Conversely, some companies that have built their workforce models around hiring from inexpensive cities are finding these areas increasingly unaffordable amidst a housing crisis. As a result, they’ve moved away from basing compensation on a city’s cost of living to a country-level model. This is a great tactic for attracting tech candidates who want the freedom to move around the country without changing salaries.
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Have — and Communicate — a Mission
Millennials and Gen Z value a “greater good” mission over money, according to research by LinkedIn that indicates that 90% of them would take a paycut for a job with real purpose.
Smaller fintechs have done a good job at this, but it’s been a challenge for older, larger financial institutions. In 2021’s hiring frenzy, bigger financial companies should think about marketing themselves to software engineers. There are a few ways to do that.
Know your target candidates. Engineers appreciate three things: challenges, purpose and details. Use job postings to spell out what problems your software engineers will solve and why it matters. (For example, modernizing legacy systems to reduce fraud). It’s a common mistake to write job postings that boast what the company has achieved in the past, neglecting what they are trying to solve for the future. Tech talent, by nature, tends to be future-thinking. To the extent your firm can do the same, it will help differentiate you from competitors.
Mention the exciting new technologies they will be exposed to. What technologies will they get to work on across the stack? What will they have the opportunity to learn? This tactic is particularly important for smaller firms that can’t offer the same level of compensation as larger shops. A talented candidate will be more open to a lower salary if they get to work on an exciting problem and learn new languages or systems.
Go beyond the job board and think about where your “customers” are getting information about you. Review your website, for example. Does your “careers” page still tout free snacks and a foosball table? Those perks no longer interest today’s best tech talent. Talented software engineers want to see that your organization is investing in people, solving problems, and hiring other great developers they can learn from. Update your mission-aligned, future-facing recruitment language on sites like Glassdoor and your company LinkedIn page, where candidates go to learn more about you and read employee reviews.
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Don’t Leave All Recruiting Duties to HR — Get Techs Involved
If you’ve typically left the job search to HR alone, now is the time to start involving your engineering team in — and across — the recruitment process. It will reduce the gap in technical expertise, will attract better candidates, and make for more cohesive engineering teams.
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Engineers love to give feedback, and want to know it will be heard. Can your HR team answer how the organization deals with change, and how they process feedback, in a highly technical manner? Do engineers have an opportunity to speak up? These are cultural aspects that require technical expertise to answer well.
Expanding the initial hiring process beyond HR is particularly important to smaller financial companies. While larger firms have more budget and room to experiment with hiring, small companies don’t — and any hire arguably carries more impact.
Prioritize Speed and Quality or You’ll Lose Out to Others
When you’ve drawn the interest of a stellar engineering candidate, know that they’ll soon be sitting on three other job offers. Hiring with speed — but also ensuring you’re sourcing quality candidates — is critical.
To do this, bring in assistive technology where it makes sense — for example, coding assessments. Before the pandemic, software engineers auditioning for jobs at financial institutions underwent live coding tests on site, but employers have had to do this remotely through 2020 — and have opened themselves up to fraudulent candidates. There are many technical screening platforms to choose from, so research which ones offer the best experience for the candidate and for the hiring team.
There’s a flip side to this. An antiquated coding assessment experience — are you really going to just have them code over Zoom? — will not convince your candidate that you are an innovative and desirable employer.
A strong technical screening provider will work with you to consistently optimize your process, and guide iterative conversations that help you evolve with trends in the financial hiring market.
How to Do Diversity Right Among Software Engineering Candidates
Studies have shown that big banks need to improve their diversity. In contrast, smaller fintechs have attracted top talent as a result of publicizing — and also acting on — their quest for diversity.
Larger institutions get burned out on trying to hire at scale while also pursuing diversity goals. Start by setting some achievable goals, and view diversity as a long-term journey that will attract better candidates, improve your bottom line, and above all, help build a culture that prioritizes ethics. (We like SmartRecruiters’ Diversity Hiring Toolkit, which is free.)
Great software engineering candidates are smart, and see right through corporate platitudes, so look at how inclusive and authentic your branding is across the hiring process. Be honest about where you’re struggling in your effort to become more diverse, and detail what you are doing to reach goals. We’ve seen financial institutions of all sizes have success with Employee Resource Groups, which can answer candidates’ questions about culture.
Midsize to large financial organizations have found success in designating coding boot camp graduates to be a percentage of their junior engineering hires. These candidates tend to have non-traditional backgrounds, which allows for a diversity of thought — and also provides your current engineering team with the chance to exercise their mentorship skills.
Any size company can build talent pools early for diversity. Start recruiting at Historically Black Universities (HBUs) and join the LinkedIn groups where female software engineers discuss what’s important to them.
No matter what your hiring strategy becomes in 2021, it’s important to be transparent about it. If you don’t clearly communicate the work setup, goals, perks, and mentality of your business — from job descriptions to formal offers —candidates simply won’t know what they’re missing.