Career Crossroads: The Talent Migration from Finance to Tech
Technology and InnovationSuccession PlanningTechnologyFinancial ServicesHuman ResourcesBoard and CEO AdvisoryExecutive Search
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July 06, 2017
31 min read
Technology and InnovationSuccession PlanningTechnologyFinancial ServicesHuman ResourcesBoard and CEO AdvisoryExecutive Search

​Executive  Summary

Our survey found that the greatest material differentiators between those who expressed a desire to leave finance or their company and those with a preference to stay was for a more engaging and value-focused work environment. Employees want to know the work they are doing matters. Benefits, including compensation, flexible work conditions, were mentioned but did not dominate the conversation. Here’s a summary of key observations.

  • Focus on Inclusion First. A feeling of being included, of being welcomed and valued, is one of  the most critical factors for employee engagement and loyalty. Hiring practices  focused solely on diversity may be limited in scope to programs and data—on recruitment  and retention numbers and how to  quantify the  presence  of  specific groups  in  the  workforce. It's easily measured. Inclusion, however, is about individuals, engagement, community and participation—all having a positive sense of being welcomed and valued.
  • Mission and Value Alignment Are Tantamount. More than ever, the heart of your organization—your mission—matters to employees. When it aligns with an individual's job focus, the bond can  be strong; when it does not, loyalty and the individual's sense of purpose at work can be compromised. An organization's proclamation that emphasizes that its mission is to serve      in the best interest of their clients may not resonate as a true mission. In terms of tapping talent for the future, Millennials, more than any other  demographic  in  today's workforce,  seek close alignment of their personal values, purpose in their daily work and for their organization's leadership to publicly support those values. Mid-career talent also reach a  point in their careers where compensation levels no longer balance out or mitigate an unmet desire to feel valued and to contribute. It's a shift that prompts the  "why stay" retention debate. This was a resounding theme voiced in our focus groups.
  • Flexibility & Choice Matter—But Not Most of All. Employees expect choice—where to work, when to work. For many, this flexibility is freedom. Employers that provide it send a strong, positive message to employees and help reinforce a culture of trust, openness and inclusion. While offers of telecommuting, extended parental leave, unlimited  vacation  and  other  benefits were not the primary reason for leaving or staying with an employer, they are part of the    mix. Companies that don't extend some form of these choices may face an uphill challenge   on  both  the  recruiting and  retention front.

Career Crossroads: Key Findings

To assess what we saw as a growing talent migration trend from finance organizations to technology firms, Toigo and Russell Reynolds examined not only who is making the move and to what degree, but what the motivating factors are behind these career changes.

We know from our long-standing work with thousands of finance professionals and a broader group of experienced leaders that career decisions are personal, often very individualized with circumstances specific to each decision. We also believed there was value in stepping back and analyzing the collective moves to determine trend lines that warrant further discussions.

We hope these insights, in turn, will be helpful to finance organizations as they assess and work to strengthen their talent recruitment, and most of all, retention strategies. The findings are also intended to spark a dialogue about where time, energy and financial resources are being invested to ensure greater alignment based on today's talent mindset and motivations.


Key Findings

Should I Stay—Or Should I Go?

At first glance, the assumption is that talent has its eye on Silicon Valley and growing tech-centric pockets across the country. There’s growth there. There’s opportunity. The work is engaging, often on the cutting edge. The lifestyle is cool. And the benefits can’t be beat. But those are the easy "tells" and are only a fraction of the story.

When Toigo published its Retention Returns talent survey seven years ago, similar insights were identified. Talent was motivated to depart finance firms in what Toigo termed a "cycle of departure"—a series of identifiable and preventable events that coalesced into a sense of mounting frustration ranging from micro-inequities, lack of access to high visibility key work assignments and inadequate performance dialogue, to name a few. The current Career Crossroads study reveals a continuing concern in some of these areas but draws additional focus to more enterprise-wide issues such as mission alignment, meritocracy and more.

According to the Career Crossroads survey, 50% of finance employees surveyed indicated they are likely or extremely likely to leave their job over the next 1-3 years. While this represents an alarmingly high level of desire among mid-level finance industry professionals to leave their current employer, it is tempered by a much lower percentage of those who desire or plan to leave the finance industry overall (20%).

A key contrasting data point—that 50% of those currently in finance are unlikely to leave and  30% are neutral—is heartening. It underscores the fact that those who choose finance-focused careers genuinely like working in the finance  industry, with organizations wholly dedicated to that  discipline.

The 50% of respondents who indicated they want to stay are the industry's best champions. Finding a way to galvanize this group will provide employers with tremendous returns via employee loyalty and stronger engagement. The 30% who are neutral represent a significant tipping point. Finding a way for them to re-engage and join those committed to staying within finance becomes a priority. We view that finding as an indicator that talent is predisposed to stay versus move to technology (or another industry sector); that means the onus of finding ways to cement that engagement with a culture and supporting policies is more vital than ever.

Career Shifts

When you take a closer look at recruitment versus retention of talent, data affirms Career Crossroads survey findings—the MBA talent pipeline, in particular, has materially shifted from finance companies and consulting firms as the top post-MBA career paths to technology.

According to the data, full time, young professionals or entry level talent are increasingly looking beyond traditional paths to exploring finance-focused careers beyond Wall  Street.

Not surprisingly, this shift is being further fueled by the presence of constant and active recruitment of talented recruiting professionals from finance organizations to lead and staff the expanding ranks within technology companies. In speaking with in-house technology company recruiters who transitioned from traditional global finance firms, the appeal of drawing in senior finance executives stems, in part, from the intention of technology companies to scale operations globally. Leveraging the experienced talent of global finance talent is, according to recruiters now in tech, a fast and effective strategy to support large infrastructure growth.

During the focus groups, several participants who made the transition from finance to technology expressed caution that as technology companies continue to grow and scale their operations, their culture and some of the flexibility and benefits offered may begin to shift.


Freedom & Flexibility

Work/life balance has become an all-encompassing term in society. The most significant difference between those who indicated they would consider leaving their employer and/or the industry and those who are committed to stay was a desire among Leavers to find an employer with greater work/life balance and increased workforce diversity.

While careers in the finance industry and technology sector can be  equally demanding, a key difference between the two is the perception of greater freedom and choice. Technology companies are widely perceived by talent to have a superior overall value proposition when it comes to work/life balance issues—in some cases this may be accurate, but not verifiable.

Flexibility in work schedule, time off and telecommuting were three of the four top factors for work/life balance. While companies often have limited ability to change office locations (2nd most important), the other three factors are directly within a company's policy control. The availability of telecommuting, in fact, helps mitigate or address the office location issue. In the medium to long term, companies can rebalance their geographic spread of teams towards locations that are more aligned with where talent wants to be, both at the city and at the global level.

Not surprisingly, the gap between how talent views what finance organizations deliver versus technology companies can be stark. Some of the biggest variances include telecommuting and flexible work schedules—both areas of noted importance. Casual dress was also an area where technology companies prevailed (by a factor of 100x), even with recent moves among several large global finance firms to adopt a casual dress policy.

For many years, the finance sector outpaced the technology sector in the compensation and immediate monetary benefits (base pay and bonus versus base pay and stock options that might—or might not—reach a 5 – 10x multiple.) To compete, technology start-ups loaded up offers with perks, from the requisite stock options to unlimited vacation time, as well as Uber rides, to in-house chefs preparing three meals per day, personal trainers, and paternity leave.


Today, the two industries are more aligned in terms of cash compensation. This parity stimulates MBA graduates and mid-career professionals to begin thinking about options, particularly if work is perceived to be less impactful. Compensation differences no longer become the driving factor for choosing—and staying with—a given career path. Given that, it's incumbent upon finance organizations to focus on culture backed by policies and operations that reinforce the value of individuals beyond the job that an individual performs. 

Core Themes: A Look at What Matters Most

Three core themes emerged from both the survey findings and focus group discussions. Exploring each provides a look into the talent migration trend; we hope, in turn, that these insights inspire finance organizations to take a careful and critical eye into their own culture and operations, address some systemic issues and stem (or better yet) reverse the tide of departures.

1.      Inclusion—The Critical Starting Point

A feeling of being included, of being welcomed and valued, is one of the most critical factors for employee engagement and loyalty. Too often, diversity and inclusion are used interchangeably; yet, the two efforts are different. Inclusion is an impassioned, distinct step in an organization's strategic process. Inclusion captures the culture and values of an organization. It allows for a seat and voice at the table, in the investment project or deal, in the strategy of the team—and ultimately in the growth of the organization and individual.

Hiring practices focused too heavily on the concept of diversity can begin to sound like the construct or traditions of affirmative action of the 1960s and underscore emphasis on measurable programs, numbers and data, including tracking the presence of specific groups in the workforce.

In contrast, an emphasis on inclusion brings attention on ensuring individuals—all individuals— have a positive sense of being a part of the organization. Career Development initiatives and performance management are key components of inclusion. How to evaluate talent potential, to match with future opportunities, and improved communication on potential are a few examples that drive potential for great inclusion.

Inclusion, as many leaders know, is the more challenging and elusive element to achieve and sustain. It's a confluence of different factors, including leadership / tone at the top, workplace policies, tenor of employees, and more. A resounding sentiment voiced during the focus groups is that the commitment to inclusion must be absolute and ingrained in the organization's DNA— it needs to be honest and authentic. If it's proclaimed from the top, but policies or practices in place fall short of that commitment, employees begin to question the value of the claim.

At the same time, for some organizations, a focus on diversity becomes very narrow with a focus on race, gender or cultural heritage. Unfortunately, diversity of mind or thought is rarely woven   in to the mix. As a recent HBR article authored by Alison Beard entitled "If You Understand How the Brain Works, You Can Reach Anyone" notes "you can have women and minorities represented, and that's great—but they may all share the same temperament, so the group isn't as diverse  as  you think."

This absolute creates appeal to organizations to reconsider how they are investing their efforts—and budgets—when it comes to initiatives intended to make all talent feel connected. Both Toigo and Russell Reynolds view the issue as an opportunity for teams to reflect and measure 


"After a few years in an analyst program where life can be pretty brutal, I transitioned to tech where the company says: 'We care about you.' That message alone gives you a sense of belonging and value. In banking the messages are conveyed through your bonus. Not everyone is motivated solely by money. We want to feel engaged."

"Finance could be better served if they tried to flatten their organizational structure and get to know their people—even at the department level. I'm much more than simply a pitchbook."

"In tech and media, it is not perfect—but in general, there is a much higher level of awareness and consciousness around bias than in finance."

"To build an inclusive culture, you have to be authentic and genuine about it. Simply updating a website or recruiting materials to show underrepresented talent doing cool work won't change an employee's mind if they are considering Facebook.  They have to do more."

"Banks feel they are above fray and when they do outreach. People can see through that. If you tell someone you are doing 'XX,' they'll do a quick reference check to see if it's true. I have to experience the change as a part of the firm's culture."

2.       What You Stand For and How Employees Hook Into That Matters—A Lot

One of biggest tipping factors among talent currently working in the finance industry to explore alternative career options was a perceived absence of a mission-driven ethos within the industry. While an organization may generate hundreds of millions in revenue, it's mission and what the business itself stands for—beyond, of course, serving clients— is not always articulated clearly. As one focus group participant noted, "the perception is that finance companies' "mission" is a monetization strategy. The importance of mission and alignment or a belief in that mission is amplified among Millennials who seek purpose and impact in their work; in fact, for next generation talent, impact is no longer a nice to have, it's a basic requirement.

Consider those with six to ten years of finance industry experience—the spot when individuals are looking to move up but finding themselves moving out. Recruiting and hiring (particularly diverse hiring) slowed significantly during the downturn in 2008/09/10. With class recruiting at an all time low for those periods, the population of diverse talent with eight to ten years experience is sparse. Given that, the need to retain this talent segment is key.

For technology companies, the underpinning of a company's purpose is innovation—a push for new, better, different. We are wired with a desire to feel like our work matters, that it contributes directly to the advancement of a cause (innovation that saves lives, helps to connect, educate, etc.). If that advancement directly contributes to positive growth—increased share value, team success, a new product that customers love—the engagement and sense of purpose is amplified.

Employer and mission alignment goes even deeper than the company's business focus—it extends to  social  awareness  and  interaction  as  well.  While  finance  organizations  operate  in a more regulated arena that often constrains and prohibits certain public or internal communications, technology companies operate outside those constraints. For some, that difference  matters.


"I envied my counterparts at the Googles and LinkedIns of the world—any time a crisis popped up,  the CEOs would take a stance and employees would feel energized to act. That would never happen in finance, they've always tried to be neutral."

"A lot of tech perks are frivolous but what people want at the end of the day is a sense of fulfillment."

"Waves of regulations have instilled an unfortunate mindset of 'don't rock the boat' or do what is necessary—losing opportunity for innovation and new approaches."

"To hear, 'Don't spend a lot of time being creative because you'll spend energy and people will get mad   at  you,'  is disenchanting."

"I enjoyed some of the work in finance but to what end; I could not see myself doing it for 20 years."

"The term "innovation theatre" has emerged. Every Wall Street firm is guilty of it: let's get an incubator, get $100 million dollar venture firm to buy this venture out and have APIs."

"Fundamental issue is finance companies don't align very well  with a  mission;  Google  has a  mission  and a monetization strategy which is its business model. Google's mission is to organize the world's information and its monetization strategy is to be the best advertising company  in  the  world.  If  Google  was started as an  advertising company,  it would  never  have  existed."

3.       Flexibility & Freedom Are Important—But Not A Deciding Factor

Change and transition on the talent front is inevitable. Gallup's sweeping 2016 "State of the American Workplace" study indicates that 50% of current employees are considering a job change. Our Career Crossroads findings, albeit using a smaller sample size and concentrated solely on finance firm employees, mirrors the trend.

Career Crossroads has helped shed light on what may be the underlying catalyst for talent migration , and it is deeply entrenched—both in the minds and hearts of talent and within the corporate culture. A lack of feeling included and valued, and a misalignment of personal values and a company's perceived values are a strong and persistent undertow.

Addressing what internally might be seen as "easier fixes" is often the first, logical move— mostly because a deep and thoughtful examination of corporate culture requires an enterprise- wide effort. The "fixes" often include adding benefits, like shifting the dress code to casual  or dry cleaning on site. While benefits aimed at addressing work/life imbalance are welcome and often applauded, they will not, on their own, stem the tide of departures or amount to a sustained cultural shift. They may prompt a rising professional to pause and take note, but in the end, all the benefits in the world will prove hollow (even disingenuous) without a broader, inclusive corporate culture.

One theme that was continually raised during the Career Crossroads focus groups was authenticity. It's important that teams consider authenticity in relation to both diversity and inclusion. If a firm's initiatives do not ring true, they discredit all efforts put forth to draw in new talent. Holding a women's leadership lunch once a year while retention of women continues to slide and hiring remains flat, for example—illustrates that the efforts quickly become counterproductive.

New policies and offerings have been adopted by financial institutions to address work/life balance concerns. Intentions are genuine, as teams want to better understand and actively addr