FinTech is hot. It’s attracting entrepreneurs and increasingly large amounts of capital. We all know that finding the right talent – whether CTO, CMO, CEO, head of product, head of sales – is a key to success for growth-stage FinTech companies.
At the same time, many banks and other incumbent financial institutions are in the midst of their own digital transformations, pledging to spend hundreds of millions (or billions) of dollars on the process. And if they’re not, they soon will be. The use of digital technology is transforming the financial services industry.
All this activity requires large amounts of talent, causing demand for FinTech skills to rise sharply. How do you uncover, attract, and retain best-in-class talent from inside or outside the sector? One alternative is to turn to an executive recruiter specializing in financial services and financial technology. Heidrick & Struggles is a leading global executive search firm, one of the few with a dedicated FinTech practice, working with “organizations from start-ups looking to quickly build out a leadership team . . . to established companies that need a specific talent injection to help build or turn the business around.”
David Boehmer leads that practice from the firm’s London office. Officially, David is Regional Managing Partner of Heidrick‘s Financial Services Practice for Europe and Africa. He also leads the payments, FinTech, and consumer & commercial finance sectors. David’s portfolio of search and advisory work over the years spans senior front office and functional roles including board, CEO, CIO, COO and general management positions across FinTech, payments, banking, asset management, hedge fund, capital markets, insurance and alternative investment clients. Previously, he divided his time between Heidrick’s New York and San Francisco offices, leading the Financial Service Practice for the Americas.
This is part one of a two part interview
Q. David, FinTech is a very big space. Where are you seeing the most activity?
A. FinTech hiring activity comes in waves. In terms of industry sectors, I’d say the latest wave started in payments, but in the last year we’ve seen more activity in institutional areas like clearing and settlement.
Q. Which skills are most in demand right now? Which positions are hardest to fill?
A. We’re seeing a lot of demand for senior, experience sales executives. Companies are looking for people who can not only sell, but who can also build a sales organization from scratch.
We’re also seeing growth in demand for general managers with the right types of experience. Companies are looking for people who have a blended background – someone who has done something entrepreneurial before but who has also been successful getting things to significant scale.
And, good engineers and technology leaders are also in demand.
Q. What regional differences are you seeing? Is demand for FinTech talent greatest in London? What about New York, San Francisco, Singapore?
A. The San Francisco market has certainly been a leader and it has been so for quite a while in the payments space and on the consumer FinTech side of things. London and New York have taken the helm on the institutional side of FinTech. London has certainly been very public about it. New York was probably about a year ahead of London, but now we are seeing much more activity in London. So it is those three, with Singapore also having a piece of it. The other place we’ve seen FinTech hiring pick up is in Continental Europe – Germany, the Netherlands, the Scandinavian countries. The Nordic countries have been creating some really interesting payments companies.
Q. Innovation inside the industry requires reaching into different talent pools, reaching into the software industry, into the retail industry, to find people who are used to a faster pace of design and engineering. Where is the pool of people with required experience deepest?
A. It’s a really good question. Quite frankly, if I look at the hiring we’ve done in the last three or four years, about a quarter of hiring is from outside the client’s core industry – if not more. We’ve spent a lot of time looking into different pools. I think if you are a bank, the area or the pool that is most like a bank is found in the telecom space. We’ve had great success pulling people from telecom into payments or into banking. It’s multi-channel, it’s highly regulated, it’s global. You’ve got the franchise, you’ve got the brand. There are similarities there that work quite a bit. We often think of innovation in terms of new services but you also need to think of innovation in terms of efficiency. This has led us to place a lot of people in financial services from manufacturing and from automotive. If you think of industries where margins are razor thin, those places are where we might look to fill certain technology and operation roles, or call center roles.
The area where we see the greatest amount of outside-the-industry hiring has been in data, where there are a lot of great people who can translate into the financial services world very well. And for FinTech startups, we like pulling someone from enterprise software into those businesses to help take them from being a bunch of really interesting products to a sustainable business. When we do a CEO search for a FinTech startup, half the candidates are from the FinTech world and half come from enterprise software or the broader technology world.
Q. What are they looking for? Do they need a CEO who has experience convincing banks and brokerage firms to take new products into their data centers?
A. Even startups that have reached that stage are asking themselves, “How do we now bring metrics and rigor to our sales organization? How do we think about subscription revenue? How do we add professional services on top of the technology?” People from established enterprise software companies are trained that way. It’s something they know how to do.
Q. Let’s focus for a bit on startups. At what point should a startup reach out to Heidrick for help finding talent? Is it when they raise their B round? How far along in general do they need to be before they call you?
A. When the company needs to scale is when we get a call. It’s when that founder who has an amazing idea now needs to bring in additional rigor, process, and structure to help the company accelerate growth. What tends to happen is that the different stages of growth call for different skill sets and a different type of role. The Series A may mean we need a new CEO or maybe a CFO because now we’ve got much more pressure on the numbers. The CEO and CFO tend to be the first two roles a recruiting firm is asked to fill. Often, if the founder remains the CEO, he or she needs to partner with a really strong CFO.
Q. In those instances, do you get a call from the VC, or do you get a call from the founder who recognizes that the company he or she started needs a different kind of leader to take them to the next level?
A. It’s honestly both. Sometimes the founder is that self-aware, and sometimes investors will influence that decision by saying that as part of this new round, we want you to bring in someone who can help the company scale. But it’s done in partnership. It’s very, very rarely contentious.
At the next stage, we’re asked to find a head of sales or a head of marketing.
Q. When you need talent to join a fast moving, innovative, probably pretty loosely-manage startup, what are you looking for?
A. Taking it from the abstract, you are looking for agility and low ego. And there are ways to look for that. Things are changing rapidly at these companies. They don’t have beautiful offices. You don’t have much in the way of administrative support. So you have to have low ego, you have to be willing to roll up your sleeves and do what’s needed. And the agility is the ability to think, and to speak, at that 30,000 foot level and then roll up your sleeves and get something cranked out.
What you look for is someone who has done something like that in a different environment. Maybe they’ve started their own thing – that’s an obvious one. But there aren’t a lot of those people so you look at who has created a new business within a large firm, or who has done something disruptive within a bank where they had to go do it on their own initiative. Those sorts of clues make you feel more comfortable pulling someone out of a large organization.
Q. And, where do you look?
A. We really run all parallel paths. We will run the path with clients and potential clients. Clients know what’s possible, they know the space. The great thing there is that they bring amazing content knowledge. You also go down the path of people who have built a business before. And that’s wonderful if they want to be part of that experience again. And then you look outside the box at the dark horse candidates.
Q. What trends are you seeing in compensation at FinTech startups?
A. At a high level, it’s certainly equity over cash, same as in the rest of the tech world. It’s a little different in later-stage companies, where you may use cash to buy out a big equity stake or to compensate someone who is walking away from a bonus. Sometimes there are signing bonuses that act as a bridge for candidates who are going from a high cash compensation package to low cash, high equity compensation package. But people make the move because they want to do something exciting, they want have an impact, do something that’s high growth, and disrupt an industry that is going through a reshuffling.
Please join us next week for part two!