Why today's most promising young people are choosing to work in tech instead of finance
While high-potential grads from top universities used to make a bee-line for lucrative careers in finance, today's young people are increasingly pursuing jobs in tech.
A global study we conducted with Randstad of over 4,000 members of the Gen Z and millennial generations found that they are most interested in the tech industry. Only 10 percent are interested in finance. In addition, a Financial Times analysis shows that the popularity of finance as a career choice is down 22 percent from 2008, and graduates from the top-10 MBA schools are now 40 percent less likely to work in investment banking after the recession.
Why the change of heart? High-potential grads want to work at tech companies like Google and Facebook because they are more innovative in nature, give employees a deeper sense of purpose and offer flexibility.
Even employees already working in the financial sector are eyeing opportunities in tech. In a new study of over 800 financial services employees in partnership with Kronos, we found that one-fourth are more interested in working in the tech industry than finance. These employees are looking for meaningful work, companies that innovate and flexibility — all of which tech companies offer and where financial companies lag behind.
Tech companies in their very nature are innovative. If they aren't evolving to meet the needs of their customers, their competition will crush them. In our study, we found that one-fourth of financial service employees don't view their company as innovative, yet 79 percent say working at an innovative company is important to them.
Companies in the financial industry that invest more in FinTech may be able to get employees excited about working there. On the other hand, those that avoid technology because of corporate politics or poor leadership will likely have challenges inspiring an ever creative and youthful workforce.
High potentials want to work at companies that are purpose-driven, that create products we use in our own lives and give back to society. In our survey, we found that 76 percent of employees say they are driven by more than just money when they seek a new job, and 73 percent say they need to see what a company stands for before joining.
Financial companies need to do a better job helping employees connect their daily responsibilities to having a positive impact on the customer and the world as a whole. For instance, while many financial companies donate to charities, employees also want opportunities to volunteer at their local non-profit.
One of the most important benefits high performers want from employers is flexibility and work-life balance. When we asked financial services employees what they have given up to work in the industry, one-third said work-life balance and about one-fourth said flexibility.
Employees in the financial industry generally have to wear a suit, go to an office and work on weekends. The work hours have led to high levels of burn out, and firms like UBS, Goldman Sachs and Credit Suisse started offering more breaks to aid retention.
Companies would be wise to offer flexible schedules and telecommuting options in order to attract and retain high-potential employees. A lot of elite workers I've talked to would even sacrifice pay to have more control over when and where they work.
A silver lining: Current financial services employees think that the industry can recover and better compete with technology companies in the future. Nearly 75 percent of employees in our survey believe that the industry can continue to recover strongly.
By offering more flexibility, giving back to the community, and fostering a culture of innovation, they can better compete for high potentials and steal them back from tech.
Dan Schawbel is the New York Times-bestselling author of "Promote Yourself" and "Me 2.0," and the research director at Future Workplace.
See also: LinkedIn's top companies of 2017 reveal what employees really want