One of the more noticeable trends in the UK employment arena at the moment is the drift of top talent away from finance and into the technology sector. A recent GMAC survey and an article in the Financial Times suggested that professionals who may have previously opted for the former industry are now increasingly looking at the latter. In fact, in 2008 just eight per cent of Harvard Business School graduates moved into tech, while last year the figure had risen to 24 per cent. In addition, a further analysis has found that graduates from the world’s top 10 MBA schools are now 40 per cent less likely to move into investment banking than before the recession. So what has prompted this trend and how can technology firms continue to make themselves attractive to finance professionals?
Historically, and up until very recently, the financial sector has drawn the brightest and the best from universities and business schools around the world. However, a combination of factors including growing negative sentiment towards the financial arena combined with the ever-increasing regulation being placed on the sector have meant that many of these high performers have been put off working here, despite the highly attractive salaries and bonus packages on offer. In addition, millennials, or Generation Y, want different things from their employers and are motivated in different ways than their predecessors. Factors like working on a flexible basis, or with bleeding edge technology often drive these individuals. The media also has a part to play. Some commentators have suggested that the battering the sector has taken from the press following the global recession is dissuading people from wanting to work in finance.
But what is it about the technology sector in particular that’s attracting these individuals? Some reports have suggested that business school graduates are accepting lower pay for the chance to work on what they see as more meaningful projects – something that would previously have been almost unimaginable. Technology firms are also able to use the offer of shorter hours and a more relaxed and open culture to attract talent. As one MBA student has said, “People used to brag and say, ‘Oh yeah, 21-hour days, seven days a week for eight months,’ as if it was a badge of honour […]. The humble brag is now ‘Oh yeah, I work 9 to 5 and I have a great life.”
However, while there has been a sizeable shift in the employment markets away from finance and towards technology, firms in the latter sector certainly can’t afford to put their feet up. The financial sector has been through the wringer, but it’s by no means dead. In fact, it’s probably still the UK’s leading industry and since the drop off in manufacturing over the past few decades, is probably the only area where British firms are global leaders. The sector is coming back stronger and institutions are quickly learning that they need to do more to attract and, crucially, retain the top talent. As a result, they’re innovating their recruitment strategies in order to tap into the drivers of this new generation of the workforce and becoming more flexible about the ways they attract potential staff. They’re also looking to mimic the tech sector by embracing newer forms of technology and innovative ideas like flexible working, which should help to lure back some of the lost talent.
In addition, let’s not pretend that money doesn’t still go a long way in affecting someone’s decision where to work. Yes, people are motivated in different ways but money still does a pretty effective job. While technology salaries are on the rise, unless you’re the founder, or got in at an early stage with something like Instagram or WhatsApp, it’s going to be a long time before you can make anywhere near the sums available in the financial industry. Professionals are well aware of this and it’s particularly difficult to lure the brightest and best when their friends are earning huge amounts of cash and they’re stuck with a low salary and stock options should the firm ever hit the big time.
All of these factors mean that tech firms may be winning the battle for talent at the moment, but they’ve still got a long way to go to win the war. Factors like flexible working may appeal to those who would have traditionally wanted to work in technology, but do they really motivate those who may have previously chosen the financial sector as their career of choice? Tech firms must reassess whether their attraction strategies are suited to the new area of the workforce that’s becoming available to them and if it’s not, they have to reassess their approaches. Let’s not be mistaken, these organisations don’t need to make sweeping changes, after all, the talent is still moving across. But if they are serious about making the most of some of the leading talent this country has to offer, they can’t sit back and must keep evolving to ensure they’re providing not just the best possible, but crucially, the most appropriate packages for talent.
What do you think technology firms can do to attract talent migrating from the financial sector?
Richard Knights is Regional Sales Manager at ReThink Recruitment