Is Australia the answer to UK Fintech's talent shortage?

By Christian Faes on Monday 11 November 2019

OpinionAlternative LendingDigital BankingSavings and Investment

Our visa system should show how grateful UK businesses are to talented migrants, writes LendInvest CEO Christian Faes.

Is Australia the answer to UK Fintech's talent shortage?
Image source: Photo by Ethan Brooke from Pexels.

Christian Faes is CEO and Co-founder of LendInvest.

I should start with the disclaimer that I’m an Australian. As such, I have a tendency to compare the way I’ve seen things done down there with how they're done in the northern hemisphere. In most regards, I would say that the United Kingdom is a very ‘business-friendly’ place, and the infrastructure is in place for entrepreneurs to start businesses and to scale them. However, there are some things that can be taken from Australia - and I think there are elements of the immigration system that we should be bringing to the UK.

One of the first things Boris Johnson did as PM was ask the Home Secretary to look at whether the UK’s existing visa system can be replaced by the Australian points-based migration system.

The Home Secretary, Priti Patel, has been unequivocally clear: she wants an immigration system that “people can have confidence in.'' I’d add that we need an immigration system that says the UK is open for business, and I’d argue that what we have now doesn’t achieve either goal. The issue of attracting and recruiting talented people to our business, regardless of their country of origin, is both crucially important and constantly painful.

This is particularly true in the technology sector. As chair of the Digital Finance Forum, I continually talk to UK Fintech founders about their experiences of building their businesses. Getting the best engineers, developers and product designers to join their teams from overseas is the #1 pain point.

Grievances are varied: scrapping Tier 1 Entrepreneur visas has cost the UK a potential mass of tech talent to other countries; an employee with a visa may only perform the exact role they were recruited to do at the time the visa was granted, leaving them and their employer little mobility; and there’s a limited pool of readily available UK-based migrant candidates to speak to when recruiting - new recruits from overseas need to accept an offer before their visa can be granted.

So far this year, London Fintech businesses alone have attracted $2 billion of new investment. Support for the sector is strong, yet it continues to be a challenge to find the right people. 66% of respondents to the Digital Finance Forum summer survey said hiring enough good people across all disciplines is the biggest challenge; 56% of respondents said engineering and product roles are the hardest to fill.

Tech recruitment is an exceptionally competitive market. Typically, engineers and developers are geographically agnostic; many are prepared and motivated to move to tech hubs if the opportunity will have the greatest impact on their career goals. Many are sector agnostic too, and will often switch between the industry verticals they serve.

All this means that UK tech companies are competing with tech businesses in all parts of the world and serving all industries for the best engineers and developers. We regularly feel that we lose talented recruits who join companies in countries with more flexible, convenient visas - which also arguably make them feel more welcome.

Making migrants feel welcome shouldn’t be underestimated. As a migrant myself, I know this.

Our visa system should show how grateful UK businesses are to these talented individuals who are prepared to uproot their lives to make a career and a life in the UK, and as such also support our economic success as a nation.

The Home Office is in an enviable position: it can learn from a migration system in Australia that is widely considered a sensible approach to this process.

The Australian points based system works well when the determining characteristics of a candidate’s application are weighted appropriately. Age and track record of having studied in the host country previously should be deprioritised. I put the greatest stock in a candidate’s prior work experience and relevant training, regardless of where this has happened. Likewise, a points-based system treats EU and non-EU candidates equally.

The point-based system also removes salary banding - a highly ineffective and inefficient way to match overseas talent to the roles that UK businesses need to fill. Speaking of efficiency, the Australian system places a lot less administrative burden - and cost - on SME employers leaving them to spend more time building their businesses, less on paperwork.

If we had an amazing stock of talent and specialist expertise in the UK, the question of how to improve our visa system for employers and skilled employees would be far less pressing. The reality, however, is that the UK has a shortage and, hence businesses calling out for this change! Until such a time as the UK produces talent at the sort of rate that matches requirements by businesses like mine, we have to make the gateways to access talent from overseas easier and faster.

At a time when UK politics has never been more disrupted in all of living memory, there’s a real opportunity to do something revolutionary and extraordinary about how we attract the world’s best talent, and to really show the world that the UK is open for business and open to migrants. Let’s not waste this opportunity.

Christian Faes is CEO and Co-founder of LendInvest.

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