[ 8 min read ]
FinTech company Salary Finance became one of the first businesses to move into our new Scale Space community on Imperial College’s White City campus. With the ribbon freshly cut, Salary Finance CFO Neil Herbert looks to the future and explains why setting up in Scale Space makes perfect sense.
Even before the pandemic hit, scale-up businesses faced a range of challenges. But last week a new report called for urgent action to close the UK’s growth capital gap of £15bn. This is the estimated figure that would enable scaling companies in Britain to reach maturity. According to a report by Innovate Finance, the ScaleUp Institute and Deloitte, titled The Future of Growth Capital, closing this gap would provide opportunities for boosting the UK’s post-Covid economy and regional economies.
With this in mind, as Salary Finance CFO, what do you see as the biggest barriers to growth in innovation faced by tech scaling companies?
In the current economic climate, one of the big things will be raising funding. Unless you can show profitability or some particular relevance in the post-Covid world, that’s difficult.
Businesses need to have shown they could operate in the online world, such as eCommerce and technology. Businesses that have got a competitive advantage that’s difficult to replicate.
On the plus side, I think the crisis constraints can be real drivers of innovation and disruption. Start-ups and scale-ups tend to be much more agile and adaptable than the bigger businesses. Those that have got the funding have potentially got real opportunities to disrupt and innovate and create new markets because the world’s changing.
At the start of August, just one-third of the UK’s white-collar workers had returned to the office after lockdown, according to a survey by Morgan Stanley, a significantly lower number than workers in France, Germany and Italy. Amid media speculation about the demise of the office, Boris Johnson has urged companies to encourage employees to restart their daily commute.
With its move into Scale Space, what is it about going back to work in an office that is important for Salary Finance?
While we’ve adapted really well to working from home from a delivery perspective, things like building culture and relationships are much more effective when done in person. Salary Finance is a purpose-driven organisation; and being physically here is much more important in that type of environment because people need to have that connection with the purpose and with each other. If we didn’t have that, we’d worry that it would just become a job and that’s something that is really important to us.
Going forward, I think flexibility of work location will become more important for people. Everyone’s demonstrated that we can work from home effectively, but there are still real benefits of having an office, from a productivity perspective and especially from a cultural perspective.
What is going to be accelerated in your business by coming back into the office?
I think there are two things. I’m an introverted person, but even I missed those accidental conversations, the connection, those unplanned moments. When you’re working remotely, you tend to only reach out to people when you’ve got a purpose to reach out to them. That means you miss out on those interactions, which can be sparks of gold.
The longer it goes on, the more you miss the buzz, those unplanned interactions and the human connection.
The other thing is the practical challenges of working from home. It’s much tougher to maintain and grow the cultural aspects of your business. It’s not just the innovation and growth side of things, it’s the culture and the social interaction that people miss. I mean, a lot of people have said they find it really productive to work from home, but that they do miss that social interaction with their colleagues.
Do you see there being continued elements of remote working in how you run your teams?
It’ll be more of a mix. We’ve surveyed people about how they find working from home and the majority of people have been very positive about it, but there is a sizeable minority for whom it’s been challenging. That might be for all kinds of reasons: you’ve got parents at home with young children who are trying to juggle work, childcare and home schooling or younger people in shared accommodation in London where they don’t have ideal working environments.
I think what it will do is drive more flexibility and more of a hybrid approach. Lots of people have commented that it has been good for their work-life balance and for their mental health, but then there are others for whom it’s been much more challenging. So I think you need to offer both.
Younger people are the biggest employee base for scaling and start-up companies. The office is particularly important for this demographic, who are typically looking to move to a city and forge a professional network.
Would you agree emerging talent benefits from experiencing a strong workplace culture?
There is definitely a theme with younger people wanting to be back in the office. Part of that is driven by their living circumstances – more of them are probably in shared accommodation where working from home is more challenging.
Also, a large part of the social aspect of their lives may revolve around work. They don’t have the same, well-developed networks, even within their own business. From a career perspective, I think it’s important for them to feel part of something and to be learning from others, from those relationships you’re building.
There’s only so much you can do virtually, and it has to be done in a very planned way, whereas a lot of it happens organically when you have people co-located.
As a managed solution, Scale Space offers a plug-in-and-go option for businesses. It has also been designed to stimulate productivity and increase collaboration and creativity.
What were the important deciding factors for Salary Finance when choosing Scale Space?
For me, it’s that connectivity of like-minded businesses. Previously I was at Capital One. We were struggling to recruit tech talent in London and the way we solved it was by opening an office in Old Street, where there is a hub of technology companies. Being part of one of those hubs is advantageous and so creating a hub like that, which is going to appeal to the type of talent and businesses you want, is an attraction.
The pay-per-desk model also works for us, as we can leverage facilities that are much better than we would be able to afford on our own. We’re still at the size where we don’t want to be employing and managing facilities staff, because that’s not where we want to be focusing our attention. We want to focus on the things that are going to be important to our future.
Scale Space has created the first university connected business community. For you, what are the benefits of being university connected?
Research and talent. From a research perspective, the space that Salary Finance operates in, which is employee financial wellbeing, is a relatively new one. Having the opportunity to partner with academics and researchers will help us in terms of thought leadership and staying at the leading edge of our industry, which is really important in an industry that is new and evolving very quickly. It will also ensure that we stay relevant for our employer partners and also our employee customers.
The research we’ve already done has been really beneficial for us in making the case for why our services and products are helpful to employees. When you’re explaining to HR directors and finance directors why they should partner with Salary Finance, having that grounded, academic thought leadership is incredibly powerful to us. It’s also powerful when we’re thinking about where we take the business next.
In terms of talent, like any great company we need great people and being co-located with a prestigious university definitely gives us a two-way opportunity. It’s an opportunity for us to explore how we can support their students, whether that’s giving them insight into business or giving them experience, and it’s also a very rich pool of talent that we can tap into as a company.
By partnering with a university, there’s almost a two-way try-before-you-buy opportunity. We can work with students to find out which are the great ones, and they can work out whether we’re a business that’s going to excite and motivate them.
Why do you think companies should embrace communities such as Scale Space, where like-minded leaders and businesses at a similar point on their scaling journey come together?
Two things. One is the networking opportunities it gives. I’ve often found that some of the best ideas and innovations you get from other businesses in other sectors are when you think: how could I use that idea in my world? That can be incredibly powerful.
The second is the effect on culture: the buzz you get from being in that kind of environment, where there’s a lot of energy, a lot of innovation and a lot of disruption. That energy can drive innovation and creativity.
About Salary Finance:
Salary Finance is a FinTech with a social purpose. “We partner with employers and organisations to offer financial wellbeing benefits that help their employees live healthier and happier lives,” says Neil Herbert.
“We do that by helping people take control of their money by offering them a range of financial products and solutions. We offer financial education, simple savings products, access to earn salary advances and affordable loans. Basically, we help put people in control of their money.”
About Neil Herbert:
Neil Herbert has an impressive track record in the financial services industry. During his 17 years at Capital One, Neil held the roles of CFO and Vice President, and became the firm’s first Chief Diversity & Inclusion Officer in the UK. Throughout his career, Neil’s expertise has been recognised with a number of professional awards, including Director of Finance’s Global CFO of the Year, Global Finance Team of the Year and Finance Director’s Blue Chip Finance Team of the Year.