More graduates with ‘quant’ skills are choosing tech over finance
Stories You Might Like
-
Sponsored: MarketWatch - Industries Fed terminates enforcement deal with CIT Group
-
Sponsored: MarketWatch - Industries U.S. mortgage applications down 9% last week: MBA
-
Sponsored: this site Wednesday's Personal Finance Stories
In his search for an internship for this summer, Dan Judd, a
21-year-old soon-to-be-senior at the University of Pennsylvania, juggled
multiple interviews, two resumes and a number of wardrobe changes as he weighed
Wall Street against Silicon Valley. Facing several interviews a day on and near
Penn’s campus, Judd would don a suit and tie and slick his hair back before
meeting with finance folks to discussed securities and cash-flow models; then
he’d throw on jeans and a T-shirt to go talk coding and solve programming
challenges with software geeks.
Reuters
For years, it’s been a ritual at the country’s best colleges — students and recent graduates, especially those with strong “quant” skills in math and finance, being courted by big banks and other financial services firms. But even as banks and investment firms rebound from recession-era cutbacks, they’re now facing fiercer competition for promising candidates like Judd, especially from Silicon Valley. “What I see brewing here is an all-out war for talent between banks and tech firms,” says Sheeroy Desai, chief executive officer for Gild, a San Francisco based startup that scours data to help companies find high-performing candidates.
Among higher-paying professions, job-trend numbers suggest that there may be more opportunities in technology over the next several years: Moody’s Analytics projects that high-tech firms will hire 450,000 new workers in the U.S. by the end of 2015, compared with 230,000 new workers for finance and insurance companies. And in one high-profile sign of finance’s eroding dominance, a survey of Harvard’s class of 2013, released this week by the student newspaper the Crimson, found that 31% of graduating seniors will be working in consulting or finance after leaving campus. While those are still the two most popular post-grad professions, the figure represents a steep drop from 2007, before the financial crisis, when 47% of graduates went into those fields. Meanwhile, 13% of the class of 2013 are going into engineering and technology.
Silicon Valley vs. Wall Street in talent war
More graduates with "quant" skills are choosing tech over finance. Jonnelle Marte explains why on Lunch Break.Some of Wall Street’s struggles in the recruiting game reflect the legacy of the recession, which hit the financial sector particularly hard. The sector reached a peak employment level of 8.4 million jobs in 2006, then lost 720,000 to layoffs, retirements and resignations during and after the recession, according to Moody’s Analytics; they’ve now recovered about a third of those jobs. The tech sector, which lost more than 300,000 jobs from a peak of 6.4 million, has recouped all of those jobs lost and then some, thanks to gains in professional and technical services and information technology, says Aaron Smith, senior economist at Moody’s Analytics.
Pay packages from the financial world, meanwhile, are less generous than they once were. While banks still tend to have the upper hand when it comes to salary, many don’t pay as well as they did during the boom years, says Desai. Banks continue to feel pressure from shareholders to limit compensation packages, and regulations restricting the types of risks banks can take have also weighed on bank profits and pay, experts say. Many investment banks cut their bonus pools by between 7% and 20% in 2012, according an annual bonus survey by eFinancialCareers, a careers site for financial professionals. The average base salary for a software engineer at a finance firm is $92,000, not far ahead of the average base salary of $87,000 for a software engineer at a tech company, according to salaries self-reported by employees on the jobs and careers site Glassdoor.com.
Many tech firms are also tailoring their recruitment pitches to college students and recent graduates who might prefer the laid-back feel of Silicon Valley to the buttoned-up ways of Wall Street, recruiters and job coaches say. Many are relying on a combination of pay and perks like flexible work hours, free food and drinks and letting people bring their dogs to the office. At its Mountain View, Calif., headquarters, Google (NASDAQ:GOOG) offers a number of cafes and play areas (think bowling lanes and ping-pong tables) meant to give workers a place to meet and engage with each other, says Kyle Ewing, head of global staffing programs at Google. Facebook (NASDAQ:FB) offers on-site health care, a barber, a bank and other services to workers, says Adam Ward, head of university recruiting for the company. Many major tech firms and smaller startups are also catering to young workers who don’t want to relocate to Silicon Valley, opening offices in Boston or New York City.
And in the wake of the financial crisis, when many banks were chided for taking on too much risk with clients’ money, more graduates may feel like they can do more good at a tech firm than they can working for a big bank, says Gayle Laakmann McDowell, a former Google software engineer and author of “The Google Resume: How to Prepare for a Career and Land a Job at Apple, Microsoft, Google, or Any Top Tech Company.” “At startups people are really excited about feeling like they’re building something where they’re contributing to the world,” says McDowell.
Those choosing the tech world over finance aren’t always doing so with altruistic intentions, of course. It’s common for startups to include equity in the company or stock options as part of a worker’s compensation package, giving them a chance to benefit if the company takes off, says Desai.
That said, some pockets of the finance world are having a better time retaining and compensating workers than others, recruiters say. For instance, bonuses issued to investment bankers could grow by as much as 20% this year, according to compensation consulting firm Johnson Associates. That compares with expected growth of 5% to 15% for senior bank executives overall.
For those and other reasons, many banks, hedge funds and other financial firms are still able to recruit top talent, says Novissimo, the recruiter with Lucas Group. Some firms can offer job candidates the lure of stability and name recognition, and many college graduates are drawn to analytical jobs at major finance firms where they know they’ll help top executives make decisions or help companies stay in compliance with the law. “It’s not just about reporting numbers, it’s making sure that you have an impact on the company overall,” says Novissimo.
What remains to be seen, recruiters say, is whether the tech world will be able to poach quant types who have more Wall Street experience under their belts. Imad Riachi is one person who jumped the fence: After earning a Ph.D. in neuroscience from the Ecole Polytechnique Fédérale de Lausanne in Switzerland, Riachi was recruited to build mathematical models for a major investment bank in London. He spent two years in a high-intensity workplace, where he says he learned to work under pressure and communicate with executives. But Riachi, now 30, recently left and accepted an offer to take on a new role as the chief scientist at a startup, developing software that helps investment managers identify their skills and biases. While he is taking a pay cut, Riachi says he decided to move for the chance to send ripples across an entire industry — or multiple industries — instead of just improving the standing of one company. “For me, that means more than saying I was a high-paid executive at a big bank,” Riachi says.
No comments:
Post a Comment