Over the past few years, the UK fintech sector has experienced unprecedented growth as more customers and businesses take advantage of the pioneering financial solutions on offer.
However, this success has not been without its setbacks: from regulatory problems to data security issues, firms have had to adapt as they’ve moved forward. In 2019, a new set of challenges beset the sector in the form of Brexit negotiations reaching fever pitch, presenting a host of fresh hurdles to jump. One of the biggest Brexit-related hurdles facing fintech firms right now is being able to source the talent that’s required to continue innovating. In this article, I’m going to look at the recruitment issues the fintech sector is contending with and offer some potential solutions.
Why is Brexit impacting the fintech talent pool?
In recent years, a fifth of the skills needed in the industry have come from the EU but, since the UK voted to leave, we’re now seeing tech graduates migrate back to the continent, leaving a huge skills gap (TheCityUK). I think most fintech firms would agree that the talent pool has significantly diminished since 2016, and correlation with talent leaving the country is undeniable. There are a few reasons why I believe this has occurred. First and foremost, we’ve seen sterling devalue considerably in the wake of the referendum, with volatility becoming the norm for a once-stable currency. As such, for EU workers, the pull factor of our currency versus the euro and others has been reduced. Another big factor in the reduction of the UK’s fintech talent pool has been the recent success of nations that would have previously supplied many qualified migrants. A number of EU countries, such as Ireland, Poland, and Malta, are either thriving, or are on the up, which means fewer residents from the EU feel the need to migrate here, and many that have already moved may be returning to their home countries. The UK’s closest EU neighbour, Ireland, in particular, has recently posted record high employment numbers, with over 50,000 jobs added in 2018 (CSO). Additionally, there is a school of thought that the climate has become less welcoming of immigrants in general since the Brexit vote, although this is much harder to quantify. Attracting skilled fintech workers could also become more of an issue if an eventual Brexit deal imposes limitations on the freedom of movement, which would make the recruitment process even more difficult, weighing it down with expensive work permits and time-consuming admin. To what extent each of these factors play a role is subjective, but there can be no doubt that recruitment of top-class talent within fintech has become more challenging.
What can fintech firms do to counteract this?
Despite the challenges of recruiting fintech workers from the EU, there are ways that firms can work to counteract the current trend and avoid a skills shortage in their personnel.
Most importantly, it’s vital that a defeatist attitude doesn’t take root, and we remember that the UK remains a great place to live and work, particularly within dynamic sectors like fintech. And, in spite of all the political and economic uncertainty, fintech remains an industry that hasn’t suffered due to Brexit, with investment continuing to flow — it reached a staggering £16bn in 2018. We should be proud of this success, and, as a collective, advertise the fact that UK fintech is the place to be for aspiring talent looking for opportunities in a robust sector. At an individual level, it is also key that we find new dynamic ways of improving our workplaces. We should look to create company cultures that encourage and reward innovation, which, if implemented well, will resonate with talented fintech professionals. We also need to make sure that there is room for both personal and professional progression, with a clear career path and opportunity for a worker to enhance their skillset. We can look to more-tangible workplace perks to attract world-class talent, too. This could be finding more flexible ways of working, providing better office spaces, placing more of an onus on teambuilding, offering new social activities, or anything else that makes it more attractive to work for a budding fintech firm. It’s often the little things that can make a talented candidate take note.
What do fintech firms want to see from a Brexit deal?
In my opinion, we’re in greatest need of some certainty, and soon. The fog of Brexit, with no clear plan for what the future relationship holds with the EU, hasn’t done anyone in fintech (or any other sector) any favours. The sooner a line can be drawn under this stage of negotiations, and a clear path forward for business is communicated, the better.
But it is also crucial that we do not cut ourselves off from world-class talent, and we believe it would be hugely counter-productive to put prohibitive barriers in the way of fintech firms hiring the best workers possible. This is particularly important for start-ups who rely on attracting fresh talent that’s eager to succeed. We hope a compromise can be reached, and that a fair reciprocal system is agreed with the EU that enables the flow of skilled workers to these shores. Finally, we hope to see frictionless trade with the EU, particularly across the services sector as a whole, which is the lifeblood of our economy. Brexit may bring about many great opportunities, but it is important that we get things right with our nearest neighbours with whom we do the most trade.
Brexit has created new challenges in recruitment for fintech firms, especially when sourcing talent from the continent. However, by taking the right steps to address these issues, I can foresee the sector going from strength to strength in the future.
Interested in recruitment after Brexit? we recommend the Immigration for Recruiters: Right to Work in the UK training day.
Nicholas Harding is the founder and CEO at Lending Works, a peer-to-peer lending platform that offers an alternative to established banks and building societies by directly matching shrewd lenders with willing borrowers.
Coming from a background in traditional finance, Nicholas founded Lending Works with the aim of creating a fairer service, where people can control and benefit from their own transactions.
The firm has been established in the alternative finance sector since 2014, with a particular focus on providing market-leading protection for their lenders.
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