Data from the industry reveals that over 40% of Nigerian startups funded between 2021 and 2023 had ceased operations by mid-2024. Linda Olumide, a globally accredited HR expert, highlights that while factors like funding shortages, regulatory hurdles, and flawed business models contribute, challenges related to people management are consistently at the core.
Issues such as ineffective leadership, limited talent availability, and elevated employee turnover plague this sector, which accounts for nearly 20% of Nigeria’s GDP through ICT. Despite its economic significance, the industry frequently lacks the human capital infrastructure necessary for sustainable expansion.
This trend is not confined to Nigeria alone. The wave of fintech layoffs that captured global attention in 2024-from major players like Klarna and Revolut to numerous smaller startups-exposed a concerning global pattern.
Many companies that had secured substantial funding were forced to downsize not because their products failed or markets rejected them, but due to the absence of enduring people management frameworks aligned with their rapid growth ambitions.
For Nigerian entrepreneurs, this global insight is particularly poignant. The challenges of currency instability, competition from international remote roles offering hard currency salaries, and rising inflation complicate compensation strategies. Relying solely on traditional salary incentives is no longer sufficient to retain talent.
Addressing these complexities requires a nuanced understanding of evolving talent demands. Early-stage Nigerian fintechs often depend on adaptable generalists-developers who also manage customer support or operations staff who handle basic compliance tasks.
As these companies grow, such roles must transition to specialists: cybersecurity professionals, regulatory compliance officers, and seasoned managers capable of implementing scalable systems. Without this evolution, startups risk stagnation just as they begin to expand.
Therefore, an effective people strategy transcends recruitment alone; it encompasses workforce planning, leadership cultivation, compensation structuring, and the intentional shaping of organizational culture as integral components of the business model.
Linda Olumide on leadership and retention hurdles
Leadership development remains a significant challenge. Many Nigerian startups promote founders or early employees into leadership positions without providing adequate training or structured support. This often results in technically skilled individuals struggling with people management responsibilities.
Employee satisfaction and opportunities for professional growth are critical indicators of turnover risk. Organizations that prioritize flexible working conditions and work-life balance consistently experience better retention. Even small, employee-focused initiatives yield tangible benefits.
Given these leadership gaps, retaining talent has become more vital than recruiting new hires. While inflation limits salary increases, employees are motivated by more than just financial rewards.
Clear career progression paths, equitable reward systems, and robust development programs are essential to keeping high performers engaged. This is increasingly important as the government’s 3 Million Technical Talent (3MTT) initiative raises the bar for training and career advancement within the sector.
These retention challenges mirror a broader global competition for talent. Research by Morgan McKinley and Vacancysoft projects a 32% increase in fintech hiring in the UK for 2025, with compliance, fraud prevention, and cybersecurity roles among the fastest expanding.
Nigerian fintech firms are competing on this international stage for a limited pool of skilled professionals. Without strong human resource frameworks, they risk losing out to better-resourced global competitors.
Beyond recruitment and retention lies a deeper issue: organizational culture is often neglected. The informal dynamics of a small team rarely scale effectively to larger groups without intentional design.
Fintech companies must proactively establish core values, expected behaviors, and communication standards early on. In Nigeria’s unique environment-where technical accuracy, customer-centricity, and regulatory adherence must align-an accidental culture often leads to internal conflict. Weak culture undermines teamwork, stifles innovation, and increases compliance risks.
Building on these cultural pillars, savvy investors are increasingly factoring people metrics into their evaluations. Due diligence now extends beyond financials and user metrics to assess talent pipelines through indicators like internal promotion rates and systematic HR practices. These measures better predict a company’s ability to scale and weather downturns.
While capital and technology initiate growth, it is the people strategy that ultimately determines whether fintech startups thrive or falter. For Nigerian founders and investors, establishing resilient human capital systems is not merely best practice-it is essential for survival in a talent-scarce, competitive market.
Linda Olumide is a globally certified HR professional specializing in workforce strategy and transformation within the telecommunications industry.
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