Attrition rates a concern to fintech firms facing ‘opportunity paradox’

ATTRITION rates are becoming a bigger concern at Singapore fintech companies, with average employee tenure at less than three years.

A survey conducted by the Singapore FinTech Association (SFA) and Accenture found that 61 per cent of fintechs have their employees stay an average of one to three years, more than 44 per cent in 2021. Mature companies that have been around for five years or more have the lowest attrition rates.

The Singapore FinTech Talent Report boiled it down to an “opportunity paradox” – potential candidates look to join fintechs for opportunities to develop their careers, yet they leave for the same reasons. This indicates they may not be getting the growth they sought, the report said.

Survey results from 2022 and 2021 found that limited career development and insufficient monetary and non-monetary rewards were the top two reasons for why employees left.

On average, 42 per cent of companies experienced an attrition rate of 10 to 20 per cent this year, as compared with 31 per cent in 2021.

Fintechs are grappling with the employee retention issue even as a majority of them expect an increase in their workforce in the next one to two years, more than before.

The workforce is projected to grow at an average of 45 per cent from an estimated 14,000 employees, translating to an increase of 6,000 headcount over the next two years, according to the report.

Due to the relatively small pool of talent in Singapore, the demand for fintech talent continues to outpace local supply, the report added. Further challenges in hiring include candidates expecting higher pay than offered and difficulties in getting work permits for foreign employees.

The most sought-after fintech roles in the last 12 months and in the next one to two years are those in sales and marketing and business development, the survey found.

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SFA president Shadab Taiyabi said in a statement: “With the fintech sector expected to expand, the demand and competition for talent will only grow. As we brace for a challenging and uncertain year ahead, fintech leaders will need to prioritise the talent agenda and invest in the right talent in order to drive business growth.”