The Resurgence of the Fintech Industry Post-2022
After experiencing one of the toughest times in its history, the fintech sector is beginning to rebound. From 2022 through early 2024, valuations dropped, mass layoffs occurred, and valuable cultural advantages diminished. However, recent data, including successful IPOs and boosted fundraising, indicates a positive shift. Nonetheless, the landscape for fintech employees has transformed significantly.
Current Employment Landscape in Fintech
Despite signs of recovery, fintech teams remain streamlined. Recent findings from Peter Walker of the Carta fundraising platform highlighted that average headcounts for Series A and B startups have fallen. While Series C startups average about 79 employees, this is down from 126 in 2021, showing an ongoing trend of reduced personnel.
Workforce Dynamics in Recent Quarters
Walker’s analysis indicates a troubling trend: more employees left startups than were hired in the last quarter of 2024. In December, only 11,000 hires were reported compared to 14,600 exits due to layoffs or voluntary departures. This contrasts sharply with January 2022, which saw 73,000 new hires and similar attrition rates.
Noteworthy Exceptions in the Startup Scene
Some startups are defying these trends. For instance, Arda Global, a digital asset startup, raised $3 million in seed funding this year with a lean team of just 10 people. Founder Oli Harris, an ex-Goldman Sachs MD, mentioned plans for strategic hiring in their next funding round. Similarly, Finom Financial, a management platform, successfully secured $133 million in Series C financing and intends to expand its workforce from 500 to 600 employees.
Hiring Trends in the UK Fintech Industry
The overall UK fintech landscape appears more optimistic regarding hiring. A report by Morgan McKinley forecasts around 16,575 job openings in UK fintech companies, marking a 31.6% increase from 2024. American startups are increasingly viewing the UK as a cost-effective area for building engineering teams.
Challenges with Recruitment Processes
However, many vacancies remain unfilled, as recruiters report extensive hiring processes that can involve up to 17 interview stages, leaving candidates without offers. Companies often hesitate to extend offers even amidst substantial job openings.
Employee Equity Compensation: A Diminished Reality
Despite the reduction in workforce, equity compensation packages have not seen an improvement. Walker’s research revealed that early-stage employees are now receiving only 1.5% equity on average, which markedly drops to 0.3% by the sixth hire. As a result, employees are shouldering more responsibilities during startups’ growth phases without commensurate rewards, leading to growing concerns about this new norm in fintech employment.
Do you have insights or stories to share regarding your experiences in fintech? Reach out anonymously at Telegram: @alexmcmurray or email: editorstips@efinancialcareers.com.
Photo by Jackson Simmer on Unsplash.