Finding a job has never been more challenging. In today’s fintech and financial services job market, candidates are facing an uphill battle. In recruitment, job applications have increased by over 250% per vacancy compared to 2021. In some sectors, roles receive 300+ applications in a few days. At the same time, redundancies persist. 40% of fintechs globally downsized between 2022 and 2024. With fewer roles and more candidates, many applicants are now spending six months or more out of work.
Interview processes have grown longer, more complex, and increasingly reliant on AI. Companies are adding more stages, more tasks, and more assessments for recruitment drives. Each new step brings more uncertainty, and each rejection chips away at confidence. All this is creating a perfect storm for a mental health crisis.
Fewer Roles And Longer Recruitment Processes
The shift from the hiring highs of 2021 to today’s lull has been sharp. One jobseeker recently described the experience as “soul destroying.” Another called it a “vicious cycle of doing more and more applications to get less and less in return.” Reports show that over 60% of job seekers say their job hunt has caused stress, anxiety, or depression. When candidates do break through the applicant pool to get an interview, they’re met with long processes. The average number of interview stages has risen from 4 in 2021 to over 6 in 2025, with outliers reaching 12–16 stages.
Making this situation worse, it often results in the applicant being ghosted when rejected. The longer interview processes often happen when hiring managers are reluctant to make decisions. Managers are less exposed when they delegate decision-making and extend the interview process. Psychological safety is also low within businesses. Many managers are concerned about their own job security and potential redundancy, adding pressure on who and how they hire.
ZipRecruiter produces a Job Seeker Confidence Index. The index for Q1 2025 was alarming in its results around how confident applicants felt about finding a job. The ‘confidence gap’ is growing sharply. The index saw a drop nearly twice as steep among women compared to men, and ethnic minorities four times as steep. This environment of fear, prolonged stress and feelings of inadequacy adds to the mental health toll on applicants in the sector.
The Recruitment “Perfectionism Complex”
Hiring managers, overwhelmed by choice, are seeking perfection. This often means they are searching for exact skills, exact experience, niche market knowledge. It’s become so precise that great candidates are being rejected for the smallest of reasons. These reasons often won’t actually impact their ability to do the job. I call this the “perfectionism complex.”
With the market flooded due to over three years of a hiring downturn, hiring managers are spoilt for choice. There are many more job seekers than there are vacancies, and some bad hiring practices have taken root. In 2024, 71% of hiring managers admitted to rejecting “qualified but imperfect” candidates. Often, they provide no feedback and move on to the next resume with a single click. In doing so, they forgot they were on the lookout for their next potential team member.
Samantha Emery, FS executive and NED, sees clear parallels. “We’re witnessing the same erosion of etiquette we saw as dating went online.” There is significant damage done when overwhelmed managers are drowning in applications with little support. It leads to some “superficially swiping past high-calibre candidates due to FOBO (Fear of a Better Option).” Many end up so transactional in their hiring approach that they even ‘ghost’ candidates they no longer want to interview.
Samantha said, “Building rapport and exploring potential” are not tasks currently “optimised by algorithms.” She warns that these methods need to be “carefully monitored and course-corrected.” Otherwise, they risk “locking diverse and valuable talent out of the marketplace.”
The Rise of AI in Recruitment And The Fall of Human Touch
Senior and mid-career professionals, who spent decades building their careers, now find themselves unfamiliar with today’s hiring tools. Many are being screened out by faceless algorithms that offer no rationale for rejection. “There are no tools available that favor the applicant,” one candidate told me. “Everything is set up to whittle us down.” Candidates are describing the job application process on platforms like LinkedIn as ‘soulless’ and ‘dehumanising.’ It’s not just a bad experience, it’s having a real effect on mental health.
Companies continue to invest heavily in AI without considering these consequences. Around 42% of enterprise-scale businesses (with 1,000+ employees) now use AI tools in hiring. These tools often aren’t designed with human bias, language diversity, or cultural nuance in mind. US-based journalist and academic Hilke Schellmann, author of The Algorithm: How AI Can Hijack Your Career and Steal Your Future, warns:
“One biased human hiring manager can harm a lot of people in a year, and that’s not great. But an algorithm for all incoming applications at a large company… that could harm hundreds of thousands of applicants.”
Additionally, the software often fails to provide candidates with a clear explanation for their rejection. Gone are the days when a hiring manager would explain why you missed the mark. This results in a lack of closure, leading people to question their value. A phrase that I frequently say is, “It is not you; it is the system.”
Tram Anh Nguyen is Co-Founder of CFTE (Centre for Finance, Technology and Entrepreneurship). She ties the mental health impact to a deeper systemic flaw, a lack of AI literacy. “One of the biggest gaps we’re seeing today isn’t just in technology—it’s in understanding it.” She says too many professionals are being excluded by systems they don’t fully grasp. “This isn’t their fault; it’s a failure of support. AI literacy has to become a foundational skill.” She believes that applicants need to know how these tools work, how to navigate them, and how to stay visible in an automated process. “The future belongs to those who can blend human experience with digital fluency.”
Short-Term Recruitment Thinking Will Leave Long-Term Damage
This is not simply a hiring slowdown, it is a broader human experience breakdown. The current system is placing unsustainable pressure on candidates, especially experienced professionals. As a result, we are losing strong talent. When the market inevitably shifts, companies may not only face a talent shortage but also a trust deficit. Processes that seem efficient now are damaging long-term employer reputation. Candidate sentiment is being overlooked, and it will matter deeply when conditions improve. People will remember how they were treated.
The market will turn again, and there will be a time when candidates are flooded by job options. When this happens, I expect managers and companies alike to be subject to AI and automation tools designed to assess them without nuance. It will be interesting to see what firms do to ensure they aren’t excluded by a poorly thought-out search filter.
The recruitment focus today needs to be on the applicant process itself and centring the human experience. The way businesses treat people now will determine whether they return later or walk away from the industry for good. Without meaningful change, companies risk not just a talent shortage, but a workforce too burnt out to come back.