Here's Affinity Resource Group Partner Peter Wagner's latest summary of current trends in the front-office financial services IT job market:
Wall Street Warming
I think it’s significant that this is the first year since the Credit Crisis that major banks have not instituted a hard freeze on hiring as the end of year approaches. We continue to see offers this late in the year. Buyouts are unlikely to happen at this time of year, so deals are likely to culminate after bonuses are paid, but that scenario is not unusual even when the market is strong.
Priorities have Shifted
As I mentioned previously, risk taking is down, and there’s less focus on trading. Consequently hiring for IT/quant needs directly related to trading is down significantly. Hiring in areas affected by regulatory changes continues to be strong.
Basel III and CCAR are driving a lot of activity. In addition, the migration of OTC derivatives trading to exchanges mandated by Dodd Frank is requiring a lot of systems development in electronic trading. Most of this work is pipes and plumbing, but firms are also figuring out how to automate market-making on these exchanges. It’s worth noting that these significant new requirements have not come with an open pocketbook for hiring. As one senior IT manager reported to me, they have huge new build requirements to support regulatory initiatives, yet budgets are down 25%.
Banks are emphasizing businesses where they can make money w/o incurring high capital costs. Processing client trades doesn’t require (expensive) capital, so winning market share in the routing of client orders is a very active area. We’re seeing strong demand for developers for teams working on order routing and listed derivatives systems.
Finally, we’re seeing Wealth Management IT groups very aggressively hiring, as the management of client assets generates recurring, non-risky revenue.
Too many Quant-Devs/Dev-Quants
Many universities now offer the MFE degree, and the market is saturated with individuals looking for quant-dev roles. This is a valuable combination of skills, but I see a saturated market for these individuals. I continue to have very strong demand for top developers, but only a handful of positions require quant skills.
Below is my mid-year update providing more context on the current market.
2014 Mid-Year Market Update
The market for developers and quants remains robust, but heavily skewed towards the best talent. By that I mean that there remains strong demand for superior talent, but the market for B+ and even A- players is relatively weak. Most big banks have had layoffs in recent months with Barclays leading the way in numbers and breadth. These layoffs have hit a wide cross section of employees including groups whose function has moved offshore, groups whose business has been divested, and a good number of highly paid employees that budgets no longer support.
The overall industry is faring better, with bank stock prices well off their lows after the Credit Crisis and the European Sovereign Debt Crisis.
However, the appetite for risk is low and capital costs are relatively high, so there’s less demand in the front office as banks place less emphasis on trading. At the large banks, hiring is focused on Risk and Regulatory work streams as well as strategic technology initiatives that promise cost savings in the long run.
Strong talent is still seeing 15-20% increases for lateral moves. Raises for the next tier are significantly lower, and many individuals find the best option is contract work instead of fulltime. Contract remains a good option for folks who are well into their careers, as salaries for experienced technologists and middle management have stagnated. While the industry is healthier, I don’t yet see any sign of a rising tide that will raise all boats. As one hiring manager said to me recently before making an offer to a candidate, “I don’t want to be bidding against myself.”
Consulting firms like E&Y and Deloitte are growing rapidly, as they offer to take regulatory headaches off the hands of upper management at the big banks. These firms can provide a soft landing for experienced professionals who have been laid off or are squeezed in the current compensation environment at the banks.
Top talent is rotating to the Buy side in significant numbers. While the demand is strong at hedge funds, the competition is fierce for these roles. The motivations are
- Perceived better pay and more upside
- Flatter orgs with higher visibility
- Less bureaucracy/red tape (regulatory)
- Little risk
My sense is the above are mostly true, but bear in mind that compensation is comparable unless you distinguish yourself. Regarding risk, the reality is that hedge funds go out of business at a significant rate. However, if you are talented enough to get hired by a top fund, you’ll likely have no problem finding a job should your employer blow up.
Bear in mind that if you are a developer, you’re better off starting your career at a large company to learn best practices. Hedge funds are often too small to have well established systems for standard practices, and hiring managers expect these skills to be second nature.
Hands on skills continue to be critical. Layers of middle and senior management have been eliminated in many companies, so everyone needs to be “productive.” The demand remains for technical skills, financial expertise particularly in the areas of risk and regulation, and quantitative skills that help firms make money. Regarding the latter, data and data analysis skills have become paramount. All trading desks, HFT/flow/structured, are now looking to understand the data better than their competitors and leverage that information to make money.
Business Insider offers up "the perfect resume for a mid-career employee," stressing the importance of:
1. Appropriate contact information
2. Keywords from the job posting
3. Accomplishments and achievements
4. A compelling career narrative
6. Relevant urls
Why do more and more workers hate their jobs, and what's the cost to companies? Today's Sunday Review section of The New York Times has an excellent essay on the subject from Tony Schwartz and Christine Porath of The Energy Project.
At Affinity Resource Group, our capabilities extend beyond recruiting. We take networking seriously, and our introductions sometimes lead to game-changing recognition. Case in point: We introduced one of the founders of Rank&Style to a key editor at Fast Company, which just included the R&S founding team high on the list of this year's 100 Most Creative People in Business.
We're getting all fancy here at Affinity, joining Meetup's Erin Dertouzos and Spotify's Lindsay Holmes on the panel at The Ladder's JobMobile NYC event at the Affinia Manhattan (6:30 - 9:00). If you're not planning to be there, you can get a sense of what I'll be discussing from The Ladders' Employer Insights blog.
...will be closed until further notice.
A few weeks ago, my wife had to make several phone calls to Amazon. We’d recently moved, and although she had updated our address in our Prime account, Amazon continued to send packages to the old location. She needed to call several times before the situation was rectified.
I thought of this as I listened to pundits discussing the disastrous rollout of HealthCare.gov, the consumer-facing Web portal for the Affordable Care Act. Why can’t Obama get it right? Why can’t the government do anything? Why didn’t they fly in the real pros from Silicon Valley to execute this?
In my experience, most websites work… just okay. Flawless sites are few and far between. (In general, the simpler they are, the more reliably they work.) I spend entire days working on LinkedIn, a shining example of advanced Web functionality, and not a day passes when I don’t encounter some kind of glitch – the big red bar announcing that “service is not available.” Facebook has had notable issues, and Twitter’s Fail Whale was so common in the site’s early months that it became a meme, worthy of its own Wikipedia entry.
In most of these cases, we learn to work around these glitches. But if any of these websites were providing services with life-or-death implications, consumer tolerance for their quirks would be very different. Imagine the hue and cry if the government were suddenly to mandate that every American must create an iTunes account, navigate that kludgy interface and make a purchase or face a fine.
The problem with HealthCare.gov, as far as I can tell, was mainly one of poorly managed expectations. Having been in charge of redesigns and rollouts for major consumer-facing websites, I can relate. Earlier in my career, I was on the hot seat for a top-to-bottom overhaul of major consumer-facing websites. All of these sites attracted millions of unique visitors each month; all were significantly smaller and less complex than HealthCare.gov.
At one major media company, we had an entire IT division of top-shelf developers and designers and project managers working with us on every phase of the development. Redesigning that site took more than a year. We missed a couple deadlines, launching several weeks later than our original target. There were some bugs when we went live. (In a separate adventure, that company invested millions of dollars attempting to create a proprietary content management system that never fully deployed.) At another company, our resources were not as vast, and although we followed strict Agile and Six Sigma methodology, although the blue-chip vendor charging us hundreds of thousands for the project promised repeatedly we’d hit the target date, we missed it by about six weeks, placing major ad campaigns (and major revenue) in jeopardy.
In each case, I was answering to senior management who knew little to nothing about digital infrastructure. Most CEO’s are pretty clueless about Internet launches and migrations. They like to play tough, draw a line in the sand, plant a flag (choose your own corporate cliché) on a launch date and then “hold feet to the fire” to make sure it’s accomplished. Those original targets are rarely, if ever, met. Website redesigns and relaunches are a lot like major home remodeling projects: They usually take longer and cost more, requiring compromises along the way.
The people responsible for managing the process are often reluctant to tell the whole truth to their bosses. Vendors are reluctant because they want to earn a full fee; internal managers are reluctant because their jobs are on the line and they may be replaced by a more enthusiastic “yes” man or woman. Most of the process methodologies employed to ensure quality control wind up serving primarily as CYA strategies – documentation parties can point to, shifting blame away from themselves.
The main problem with HealthCare.gov, as far as I can tell, is that expectations were not managed. Once the administration got the final green light, there was not enough time before October 1, 2013, to create and fully test a site with the requisite functionality. This was not a question of talent or resources. The process requires time – time to define the scope, design the site, build the wire frames, create the code, integrate the APIs, and test and test and test. And regardless of how much time and testing had occurred, real-world use would still inevitably have revealed flaws that would need to be fixed. That’s just the nature of the Internet. It’s all built on rapidly evolving technologies, the upgrade of any of which can create unforeseen conflicts elsewhere in the system.
Someone needed to stand up and say, “Sorry, it’s just not possible.” That way the Administration could have communicated to Congress and the public a more realistic time table.
Of course, the more likely outcome is that the responsible realist communicating that message would have been given his or her walking papers, replaced by somebody else who’d blithely say, “Can do, Chief!”
The Internet is amazing, but it ain’t magic.
Ninety percent of hires are based solely upon the interview according to a Harvard Business Review study. In fact, 63% of hiring decisions are made within the first 4.3 minutes of an interview (courtesy SHRM). So, the interview is probably the most important part of the hiring process. And that's why you need to spend time with your personal recruiter to better understand whom you are interviewing with and the issues that you will be talking about during the interview.
You always need to "take temperatures" because people have minds and they're changing them constantly. You need to listen to what they don't say. Being prepared for an interview is vital. The following preparation is very unique and effective in conducting a positive interview.
Things To Remember:
- People have to buy you before they buy from you.
- People hire and accept emotionally first and justify logically later.
- People are most sold by your conviction rather than by your persuasion.
- Know your technology, but think PEOPLE.
- The decision to hire is made in the first 5 to 10 minutes of the interview, with the remaining time spent justifying that decision.
Please take these notes to the interview and practice the anticipated questions that may be asked and your answers to those questions. Be sure to practice these steps out loud to yourself before the interview.
- What are the duties and responsibilities of the position I'm applying for? This is an excellent icebreaker question for the hiring authority and a great start to a successful interview. What percentage of my job is dedicated to administration, supervisory, and technical?
- What is my number one priority that has to be done before I leave each day? Why?
- What are the production or sales goals? What obstacles would prevent me from reaching my goals?
- What are the short and long term goals set for the person in this position?
- Have questions for the hiring authority. Questions must be written out before the interview, while avoiding the topic of compensation and benefits for the first interview.
- Salary - this is a trap question. If the question is brought up a very good response is "I would like as much as the position will pay" OR "I am currently making $_____. Although I would like an increase, I don't know enough about the opportunity to answer that fairly"). Be very careful that you don't short yourself. Be sure to keep in mind your base salary, bonus program, stock options, gain sharing programs, performance bonuses, benefits, etc.
- Ask for the job! "I haven't interviewed in a while, what is the next step? Can we conclude our business today if all goes well?" Summarize what you've done that ties in with the new position and ask, "Do I have the qualifications you're looking for?" then remain silent for an answer. If the hiring authority says, "I'm looking at other people," you say, "How do my qualifications match the people you're considering." Your #1 priority is to receive an offer, if this is a position that you desire, your #2 priority is to know the next step. ALWAYS SEND A FOLLOW-UP LETTER.
After you leave the interview, call your recruiter.
Writing for GQ, workplace guru Cecil Donahue dissects the strange ritual known as "the job interview." According to Donahue, the ultimate aim is the same on both sides - to suss out where the other is situated on the bat-turd crazy/awesome continuum.