Suddenly is it the fintech jobs that suck?

Technology “unicorns”—those companies valued at $1 billion or more—are meant to be the hip places to work, and fintech companies continue to attract talent from traditional financial institutions.

But a growing number of people find that once they arrive at their new role, there are plenty of long hours but a lack of career direction or clarity around compensation.

“Workflows that are meant to be agile just become ‘work it out for yourself’,” said Ben Quinlan, founder and CEO of consultancy Quinlan & Associates, which has released a report calling for the industry to take human resources seriously.

“Fintechs are bleeding talent and running reputation risk,” he said.

Warwick Pearmund, Asia technology lead at headhunting firm Hamlyn Williams, says too many startups are ignoring H.R.

“Startups begin with a core team but once they get their Series A or Series B funding, they need an H.R. professional,” he said. Too often this is viewed as an afterthought. “Early hires will have the same zeal and the incentives as the founders, but not your one-hundredth hire. These people won’t be working 15-hour days and weekends. Firms need to consider retention and rewards.”

Quinlan’s research says that the H.R. gap is already becoming a problem for virtual banks. Analyzing Glassdoor ratings of Hong Kong’s new crop of virtual banks versus its traditional incumbents suggests people at V.B.s are not happy.

The firm’s analysis shows V.B.s garnering an average 2.9-star public rating for employee satisfaction, versus 3.8 stars for incumbent retail banks. “That’s a big divergence from the firms the virtual banks are trying to disrupt,” Quinlan said.

Is this a generic problem to startups? Quinlan says no, as his research includes large, well-funded tech companies and licensed virtual banks, not just small fintechs.

Nor is it just about life under COVID-19, although remote onboarding of staff, remote management, and remote working will make things worse in companies that already have poor H.R. governance.

And it’s not a reflection of Asian working environments: these problems are global. The difference in Asia, Quinlan says, is that more companies are run along a more dictatorial or patriarchal system, which is fine when the boss provides direction, but a mess when there’s no real engagement with these issues.

“Too often the leadership is removed from the working level,” Quinlan said. “The reality is that at most firms, H.R. is considered a ‘nice to have’, but to retain good staff requires policies, processes and systems.”

Pearmund says fintechs are still attractive draws for either junior people with few financial commitments, or very senior bank MDs who are tired of the corporate suit-and-tie life and want to make an impact.

He agrees that fintechs need to implement H.R. policies to retain these people. They tend to join in the first place to do something interesting. Software developers and data engineers will need to be kept engaged through creative work.

Skills in banking readily translate to those in fintech, and many people are still flocking to fintech. Tech companies need people who understand how to operate in a regulated environment, be they virtual banks, crypto exchanges, or payments players.

But tech companies, particularly well-funded unicorns, are putting their reputation at risk if talent doesn’t feel like it’s got a clear career path, which usually requires a control process. One reason big banks can afford to lose people is that they have a system to slot in someone else; losing a few good people can devastate a small company.

Quinlan argues that whereas five years ago, bankers were desperate to escape the over-bureaucratic maze of incumbent firms for the freer, more creative and potentially lucrative lifestyle of a fintech startup.

Today those incumbents look a lot more appealing. They instituted new H.R. policies around flexible hours, work-life balance (particularly for younger people) and other lifestyle improvements. Plus the bigger firms are now digitally competitive.

Meanwhile plenty of bankers have found themselves slaving away at tech companies that are obsessed with getting the next product out and have forgotten to develop their employees’ careers. Specialists in areas like cybersecurity and data engineering can still get a job anywhere they like. Founders who neglect their people are at risk of losing a lot more.