Tech Worker Layoffs – Should Banks be Recruiting?
Savvy banking leaders can look at the ongoing “big tech” and fintech layoffs as an opportunity to recruit talented and highly experienced new team members. Hiring managers should think more broadly about their talent acquisition strategy in 2023 and consider the attractiveness of their bank to the newly available tech talent pool, and in doing so add value to their organizations.
At this point you’ve seen the alarming numbers announced at large, well-known tech firms — totaling more than 150,000 cuts in 2022 with acceleration in Q4. At the start of this year, tech cut another 40,000 jobs, leading all industries in layoffs. In the fintech space specifically, SoFi, PayPal, LendingClub, Coinbase, and Blend lead the list of top names reducing headcount by double-digit percentages over the past year. This new talent pool may present an opportunity for enterprising banks.
Banks should think about this recruiting opportunity broadly. First off, it’s worth considering where in the country the biggest technology talent pools are, beyond the obvious epicenters in the Bay Area and Seattle. According to Oliver Wyman and CBRE research, New York (#2 nationally), Washington DC (#3), Los Angeles (#4), Dallas-Austin, Chicago, Boston, and Atlanta round out the top 10 markets of total tech worker populations. Other US cities, with smaller real numbers of tech workers, rank highly in tech’s percentage of the total labor force (concentration). We can include Salt Lake City, Charlotte, Denver, and Portland (OR) in that list. Banks with technology operations in any of these metros are well positioned to recruit local talent.
But does geography actually matter? Some banks have remained solidly remote for non-customer-facing teams, while others have returned to in-person (or at least hybrid) work. For banks with a proven and so-far-successful remote work operations model, tech talent in other regions of the country is part of the available talent pool. Of course, some technology workers may be willing to move to a different area of the country.
It’s unclear how many laid off technologists will become actual job seekers. Many are likely to land new roles quickly, others may choose to remain out of the job market for some time. The latest weekly unemployment claims from the Department of Labor aren’t yet reflecting any of the late-2022 announced cuts.
Not all banks are able to hire right now. Large FI’s have been reporting their own hiring freezes and staff reductions, although not all of those have been in technology areas. And some are very actively still growing their digital teams. Notably, we see Wells Fargo hiring for 1,500 tech positions including design and product, as of this writing.
For banks that are hiring, how has your recruitment approach evolved during the “tech talent war” of the past 2 years (prior to 2H2022)? If salary scales haven’t stayed up to date, it could be time for a rethink. Latest communications tools and approaches (think: agile, dev-ops, product design, and collaboration) will be attractors for candidates coming from big tech. Is your organizational culture a fit for technologists who might be used to very progressive, employee-experience-centered work environments?
Banks can benefit from fintech-industry-experienced hires, both within and beyond the digital team. Within technology, CIO, CTO, CISO, Project Managers, Data Analysts, and Network Engineers are positions that every bank should be staffing with experienced hires. While only a small number of banks might currently be dealing with vacancies in tech executive positions, smart leaders are constantly recruiting for team-scaling roles like data scientist and project manager. And, smaller banks may have just recently defined new leadership roles like Chief Digital Officer that can now be sourced from a larger and more experienced candidate pool.
Digital leaders can use this moment to add value to their organizations.
After thinking more broadly about the new tech talent landscape, digital leaders in firms that are actively hiring should keep these five ideas in mind:
- Think honestly about your culture. If you’ve established a great remote work model, leverage that. Consider your brand recognition to candidates in other geographies if you are recruiting remotely. Make sure your recruiting process has been updated to newer techniques that can move fast with the right candidate.
- Emphasize your strengths. You may be able to offer a better quality of life (e.g., amenities and cost of living) to recruits. Your size or structure may allow them to assume leadership positions previously unavailable. And you may give them a chance to be *the* expert in your institution, rather than one of the many in their prior firm.
- Contribute to your organization’s overall recruiting process. Add your perspective as a digital leader. Provide value across your organization and not just for your team or your channel.
- Consider hiring good digital “athletes” in vacancies across your organization, not just specific roles or “position players” in digital.
- Be realistic about compensation. If you haven’t hired in a while or plan to be recruiting in remote geographies outside your home market, there could be adjustments needed to salary scales.
Even if your organization is not actively hiring now, considering the new tech talent landscape more broadly will help decision making throughout the bank when the team is ready to grow again. Digital leaders can help drive that thinking.