Once relegated to the nebulous corners of the back office, operations has come into the light as a make-or-break function for U.S. financial services firms.
Operations is becoming more a critical part of senior management teams at banks. Kristin Wait, a consultant at Spencer Stuart in New York, says, 'Operations is slowly going through the same process as the CIO did seven to 10 years ago when they came out of the wheelhouse to join the management team and they became a very important part of the business."
Operations is slowly going through that same evolution because people understand it represents huge costs and a lot of risk to a company's overall worth. "If they don't get it right, operations can blow a company out of the water,' Wait says.
For senior positions that Spencer Stuart is filling, she is looking for 12 to 35 years of experience, often in general management.
Chuck Delman, another consultant at Spencer Stuart, says their clients want senior executives with project management skills. 'Operations folks over the years have had to become more technologically conversant, not necessarily technologists themselves, but close enough to understand the operations.'
Wait is currently working with a client who is hiring an operations executive to take responsibility for international process risk in funds administration. The firm is not requiring funds administration expertise, but it does want great leadership skills and the ability to build and manage specialized teams and manage risk.
'Really good worker bees are easy to find, but firms can't continue to promote them once they Peter Principle out on leadership and management. They will go for a nontechnical person to get leadership and management skills.'
Outsourcing adds complexity to the job, adds Delman. 'People have to understand whether off-shoring is right for the firm, and they have to understand the risks.'
At the lower end of the employment scale, Wall Street firms are still recruiting from universities to bring on trainees.
Georgina McKenzie, manager of the operations and compliance team at Michael Page International, says that top tier banks are running their training programs full steam ahead. They want bright graduates with strong numerical skills who are also good at building relationships; specific skills can be learned in a two or three-year program that includes rotation through different sectors of the bank.
'The role of operations is changing a lot as technology takes over more of the processing roles. The banks want people for client service positions who can deal with problems that come up when a system breaks down.'
While outsourcing is sending some of the routine work to India, the managerial work remains here. Banks are looking for new staff who have strong skills in Microsoft Access, Excel and Word, she added. 'They would love people who can write macros or do basic programming, but they don't necessarily require Java or SQL.'
Interviewing focuses more on behavioral issues than technology. Candidates are apt to be questioned about past experiences, and how they dealt with problems they encountered in college or previous employment.
Derivatives continues to be a hot area for hiring, with credit derivatives especially strong. With the growth in hedge funds, hiring for derivatives remains strong across the board.
In addition, since firms are once again launching new development, they are looking for business analysts and project managers. The other growing area is compliance and risk management, with the requirements of Sarbanes-Oxley and Basel II. For those roles, firms are looking for individuals with an accounting or legal background.
MacKenzie says, 'This is wide open because there is such a huge demand in these areas that the existing skill set in the market cannot cope.'
Most of the demand is in the mid-management level with two or three years of experience and salaries running from $55,000 to $100,000. Bonuses typically run in the $2,000 to $10,000 range, although in areas of strong demand, such as credit derivatives, they can spike up to $15,000. Vacations usually run two to four weeks, although the European firms tend to have more generous policies.