Hiring hurdles faced by Fintech start-ups in India- A David-Goliath fight that can be won!
As a recruiter, I had to turn away business from a Fintech start-up recently. Partnering with such start-ups is challenging as hiring for them poses huge speedbumps. A Fintech start-up usually looks for niche talent that is highly valued in the market. The Goliaths in this market are massive international banks, Insurance giants, and FI’s setting up development centers in India. Fintech organizations that have turned Unicorns offer aggressive competition too.
Today, the knowledge economy talent market in India is exploding. Giant MNC’s across Retail, Banking, Insurance, Manufacturing & logistics are establishing their India footprint. A yawning gap in talent supply versus demand has resulted in spiraling salaries. We see candidates shopping around for multiple offers and corporates indulging them in what is almost a bidding war.
A 3-year experienced candidate just saw his salary increasing from 22 lakhs to 72 lakhs through me- thanks to the multiple offers he kept getting throughout the interview process. The job market has gone berserk in its hiring and compensation strategies. In this world, a Fintech start-up trying to hire strong engineering talent and technology architects is in choppy waters unless it gets innovative in hiring.
Investing in a strong social media presence gets them Mindspace with the right candidate. There must be a dedicated and consistent effort, on all the relevant platforms to create a strong social media stamp. I know a start-up that used humor in their SM messaging and their Recruitment team was flooded with resumes creating a unique supply line of talent.’
Gamification strategies help engage with candidates and keep them involved. Leaderboards, badges, tokens and a reward at the end gets a candidate who is passionate about technology quite excited. The recruitment team here, has to collaborate with functional teams to keep rolling out such programs.
A startup must be creative in sourcing from different talent pools. Today the gig economy is getting popular and has drawn in college students into the talent pool. An interested student (who can code, crunch data, or just brings common sense to the table), offers 4-5 hours of focused work per day, and can be used for grunt level work with the right kind of monitoring. A lot of experienced professionals are also exploring such options. I came across a Tech professional who was quitting his job to do a bar-tending course. This was after he was just given a 22% hike. So, while money is important, some of today’s youngsters feel that work life balance is also critical. This bar tender/java architect was open to working a few hours per day. Part-time work and short-term contracts help woo such talent.
A long-haul strategy is working with economically under privileged youth and investing in their education. I know a successful start-up which used to invest time in training less privileged localities within the city. They created a dedicated and totally committed workforce by sponsoring high school and college education for some of the sharper kids. This company today has one of the lowest attrition rates too!
A key takeaway from the pandemic is that working virtual works. A lot of companies are planning to offer a hybrid model (3 days office, 2 days home) from Jan 2022 onwards. Offering permanent WFH or work-from-wherever helps attract talent that a lot of regulated MNC banks cannot offer. Going forward, I believe a lot of start-ups will be using this as a differentiator while fighting with the goliaths to attract talent.
As an extension of the WFH strategy, actively hiring from non-urban centers will also make a difference. The sincerity, positive attitude, gratitude for the job and commitment that rural talent offers, more than makes up for their lack of polish and suave inter-personal skills.
Today recruitment firms are paid in an outcome-based model. A finder’s fee is given to them for every candidate who joins. With a 60% offer decline rate, this can be frustrating. A few companies are changing this by offering fees for Level 2-selects itself. Internal recruitment teams should also be incentivized for every joining. Functional leaders should be roped in for post-offer engagement with the selected candidate.
Above all of this, as we all know, money is a great leveler, Goliath or otherwise. Compensation should be attractive and today start-ups must be more creative on this front. Offering equity, tax friendly components, allowances, and retention bonuses could help in fighting attrition-linked hiring.
There is a war for talent out there. It’s not enough to have a bright idea and get funding. Fintech start-up’s must get disruptive with hiring strategies too!
