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Recently, my firm surveyed a group of registered investment advisor (RIA) firms, banks and wealth management firms about their plans for technology in the upcoming year. Approximately 75% will increase their tech investment in the next two years. Similarly, the majority of firms plan to hire more tech talent over the next two years. In contrast, however, the great resignation has seen high rates of attrition in the technology departments at many firms, and the landscape for hiring qualified talent is complex and obstacle ridden.
These conflicting narratives present a problem for firms that are in the race to hire the best technology experts. But knowing the landscape and how to navigate is a critical advantage. For firms looking to hire tech talent this year, here are some critical components to consider:
Demand dominates tech talent supply in financial services
Thanks to a never-ending news cycle and the prevalence of social media, many in the financial advisory profession have been inundated with news of the recent wave of tech layoffs. But that doesn’t mean that firms are suddenly looking at a massive pool of tech talent. For example, in the case of the most recent wave of Salesforce layoffs, many of the employees affected held customer service and success-related positions, not the firm’s top technology jobs.
There is still a finite number of jobseekers with the appropriate skillset. Many wealth management firms on the prowl for the best talent are in fierce competition with traditional technology companies. The latter organizations can often position themselves alluringly to candidates who want flexibility, opportunities to be creative, exciting projects, and benefits like unlimited vacation.
Many wealth firms can’t position themselves attractively to the talent pool, exacerbating their hiring headaches. When one considers that many firms have quite narrow requirements – pure technologists who can build something compelling without possessing sector-specific expertise – the pool quickly gets smaller and smaller.
The struggle to find talent
Firms can mitigate the impact of a small talent pool by effectively marketing the role, offering competitive benefits packages, and utilizing strong equitable recruitment practices. But once they find those few qualified candidates, the war is not won.
My consulting experience has taught me that many wealth management firms struggle to find the candidate who has decent technology experience but can also work well with others in adjacent and complementary roles – developers, architects, or even chief operating officers. The person who can evaluate critical business functions through a technology lens and introduce the appropriate efficiencies is seemingly the coveted all-star hire du jour. Firms that come up short in identifying this elusive individual may choose a platform that provides custom-technology services.
Is a technologist the best hire, or will someone who is “fintech savvy” suffice?
This is another important question firms should answer before diving into the often-arduous task of searching for the perfect tech hire. If a firm does not need a lot of customization, instead requiring support with implementing vendor solutions and understanding how tech platforms integrate and complement one and other, then a developer is not the optimal hire. The skillset for managing vendors and the dataflow between them is more common than you might imagine, and can often be found in a candidate who is “fintech savvy.”
But if your firm needs someone who can channel design and other requirements to build something incredible, fintech expertise or otherwise, then you need a true engineer. Anything custom-designed and built will require the influence of someone with a vast depth of expertise.
Depending on the project, the firm may need a full-stack developer, a front-end web designer, a database developer, an industry-agnostic technologist, or someone with another niche set of expertise. If finding the appropriate talent feels like an insurmountable task, leadership should seek alternative ways to meet their technology needs – perhaps tapping consulting and outsourcing platforms that can act as an outsourced chief-technology officer.
Hiring is replete with challenges, no matter the industry. But when it comes to hiring tech experts, firms must assess their talent needs carefully before deciding the role they’ll be filling. Sometimes the optimal hire is a person, and other times it’s a platform. Firms should choose wisely based on their long-term development and product needs, because their technology investment will only increase.
Scott Lamont is director, consulting services, at F2 Strategy, a wealthtech management consulting firm serving complex wealth advisory firms.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.