In the war for talent, finance is gaining ground on tech

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Max Spitalnick had an open field as he kicked off his job search late last year.

The second-year business school student had spent the past decade in a mix of roles across technology and finance. Now, as graduation approached and he prepared to reenter the job market with an MBA, Spitalnick put out feelers across the two sectors, eager to evaluate his options.

He — and his classmates — saw the landscape shift before their eyes.

“If you would have asked me in September 2022 what was open, I would have said tech and finance,” Spitalnick told LinkedIn News. “By November, layoffs were hitting blue-chip technology companies, and I said there was slim to no chance most of us were going to tech roles.”

After years of breakneck growth and soaring valuations, technology businesses have lost much of their luster . Fast-climbing interest rates — designed to combat the highest U.S. inflation in decades — cut down tech companies’ values, limited their customers’ budgets and slowed the overall economy. That has resulted in tens of thousands of job cuts across marquee employers such as Amazon, Google parent Alphabet and Facebook parent Meta — previously among the most prized destinations for ambitious new grads and early-career professionals.

One beneficiary of tech’s turmoil? The finance sector.

According to data from LinkedIn's Economic Graph , while the number of tech job postings in the U.S. slumped by 56% over the past year, the number of new finance roles declined by a significantly smaller amount, 33%. And among workers who have transitioned between the two sectors, the gap has narrowed in the past year in favor of finance: 7.6% of professionals leaving tech went to finance, up from 7.1% in the previous 12-month period. For workers leaving finance, 8.9% went to tech, down from 10.7% over the previous year.

“It’s no longer a stretch to go from tech to financial services,” said Deepali Vyas , the global head of financial technology at talent search firm Korn Ferry. “Now is actually a very opportune time to do so.”

Five years ago, a majority of recent business school graduates who had worked in financial services were interested in shifting to tech. The data, from a LinkedIn-commissioned survey at the time, showed these MBA grads were influenced by the tech sector’s total pay, which typically includes stock; workplace culture; the potential impact of the work; and perks and benefits.

The pendulum has since swung in favor of finance.

The latest figures published by top business schools show that recent grads’ interest in financial services roles is on the upswing: 34% of Harvard Business School graduates in 2022 went into finance, up from 28% three years earlier. At the University of Pennsylvania’s Wharton School, 39% chose financial services positions last year, up from 36% in 2019. At the University of Chicago Booth School, it was 35% , up from 31%.

Spitalnick, who graduated last month from the University of Miami’s Herbert Business School, explored opportunities in both tech and finance. He decided to hedge his employment bets, given the uncertain and volatile environment of late last year, when the Federal Reserve jacked up interest rates by 0.75% at four consecutive meetings. But while he was eyeing large technology employers like Dell, HP and Oracle, something felt off at the turn of the year.

“Pretty much across the board, the message was, ‘Check in in January,’” he said. “Then it became, ‘Check in in March,’ and then it was, ‘Check in in June.’ In the end, the blue-chip tech firms were just not hiring.”

It hasn’t been smooth sailing in financial services, either. With dealmaking hampered in the wake of the Fed’s actions, big banks from Goldman Sachs to Morgan Stanley initiated thousands of layoffs for the first time in years, alongside cuts to employee bonus pools. Then in March, the sudden collapse of Silicon Valley Bank set off a monthslong crisis among regional lenders that culminated in two additional bank failures and a bout of anxiety among the industry’s workforce.

“By mid-March, everything across the two sectors was looking horrible,” said Spitalnick.

The balance has since shifted in favor of finance, thanks to the sector’s relative display of stability over the recent spell of crises. Financial institutions emerged stronger in the wake of the COVID-19 pandemic, in part due to lessons its leaders learned from the 2008 financial crisis. Since then, data from LinkedIn’s Top Companies franchise show big banks holding steady near the top of the annual list , with dozens of banking professionals recently explaining why the industry is an ideal launchpad for career growth .

In the spring, Spitalnick put his “nose back to the grindstone” and focused on opportunities where he could most tangibly apply his skills and develop new ones. As some brand-name employers that typically hoover up MBA graduates, such as McKinsey & Co. and Bain & Co., pulled up the drawbridge on this year’s class of prospects , he noticed his classmates turning over other stones, from boutique financial services firms to family offices.

Spitalnick landed a corporate finance role at Anew Climate , one of the largest originators of carbon credits in the U.S. and a portfolio company of private equity firm TPG. He started this week.

“People are taking opportunities that put them more in the driver’s seat,” he said. “The focus is on being able to drive down the lane on a specific set of skills, rather than on title or prestige.”

Employers, too, are shifting their focus toward candidates’ skills, rather than fixating on traditional markers such as schools and degrees. Leaders in finance and career experts in the sector increasingly cite skills when discussing candidates’ potential for success, and the advice they give to early-career professionals often involves first evaluating their set of tangible capabilities.

“The most important framework for thinking about what you want to do and what pathways you can pursue is to first identify where your skill set intersects with your passion,” said Amanda Hindlian , a former Goldman Sachs partner who now leads fixed income and data services at the New York Stock Exchange’s parent company.

Matching your talents to a specific role is where the magic happens, according to Korn Ferry’s Vyas. From her vantage point, looking across the finance sector, she considers the following skills as critical to success: data analytics; attention to detail; adaptive communication for both technical and non-technical audiences; basic proficiency in technology; and “emotional intelligence” tools that include time management, organization, flexibility and adaptability.

Today, the most in-demand skill listed across job postings in finance is communication, according to LinkedIn data. Employers are also keen to find candidates who have strong problem-solving capabilities. Database programming language SQL also ranked among the top five desired skills, a reflection of the increased demand for engineering talent in the finance sector.

But during unstable periods, these skills become simply table stakes for professionals. When companies’ boards and leadership teams raise their scrutiny of workforce levels, developing a unique arsenal of tools and capabilities becomes more important than ever, according to Vyas.

“Creating a specialized skill set, where you become indispensable to the company, allows you to be even more mobile during turbulent times,” she said. “Because you are an asset.”

That’s what Spitalnick is looking to achieve now, as he moves to combine his experiences across technology startups and financial institutions with the corporate and environmental finance know-how of his new job.

He said he’s also relieved to have dodged a path that, thanks to several well-meaning connections, would have led him to a role at Silicon Valley Bank.

“I feel like I’ve been set up for success,” he said.

—With assistance from Alexander Clark .

Methodology

Employment data is derived from LinkedIn members’ profile updates. Job posting data is based only on paid job postings.