London is the new cheap location for New York fintechs to hire engineers
In the age of profitability for fintech, firms will use any and all means of cutting costs. An area fintechs frequently look to save money on is their wage bill, either through cutting staff, or hiring in low-cost locations. For some New York fintechs... that low-cost location is London.
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Michael Abdul, director of fintech recruitment firm Volition, says one of his New York clients is "building its engineering team in London due to cost." The differential is "absolutely staggering," with early and mid-level engineers being paid up to 50% less in the English capital. At higher seniorities, Abdul says the differential tends to drop to around 30%.
This disparity is illustrated in the job listings of one of the top paying fintechs, Stripe. A software engineer with three years experience in Stripe's payments team in London can make a maximum salary of £144k ($188.7k), while a full-stack engineer in New York requiring the same amount of experience can earn up to $269k.
Abdul says another client is using its New York benchmarks to hire "the absolute best in the market in London." In New York, its roles would "often remain open for a few months due to a lack of available quality" at its price point.
London engineers are not only the better option pound for pound (literally), they may also be better overall. At last year's Sifted Summit, Bessemer Ventures parter Alex Ferrara said European founders are often "shocked" at how much better European talent is when expanding.
However, it's not all positive. UK fintech professionals can be averse to working long hours, particularly compared to staff in Asia working 100-hour weeks. For this reason, some UK fintechs are looking to hire 'B players' in cheaper locations like Poland.
Even if US fintechs hire in London they may still have cost issues. A report from BCG last month revealed that salaries and wages make up only 35% of cost structure for the average fintech, compared to 60% for banks.
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