Base pay for a developer in a quantitative finance job is $125,000 to $150,000 (67,000 to 81,000), according to Brain Bennett, head of financial IT at McGregor Boyall in New York.
Bonuses depend on earnings, of course. In a technical position they can run 15% to 30% of pay, while an IT person who works tightly with the business can see bonuses of 100% to 300%.
Bob Deissig, a partner at the Ayers Group and president of its staffing services, says financial services are seeing tremendous growth. Demand for Java and C skills is climbing, while Microsoft's .NET and C# are becoming increasingly popular at banks. Some technologists are getting MBAs, and while that doesn't hurt, practical experience in finance is what firms want most.
London's fish bowl
Requirements are much the same in London, says Richard Sharp, account director at recruiter Spencer Rose, Ltd. Like their counterparts in New York, banks want a combination of technical skills and business knowledge.
'They will want someone on their Java development team, but they want someone who in addition to Java also knows credit derivatives or interest rate derivatives,' says Sharp. Technology skills in demand include Java, C# and .NET including Visual Basic .NET and ASP.NET.
The banks are placing a lot of emphasis on re-engineering their business processes to make them more efficient, with a concentration on straight-through processing. Spencer Rose works across a wide salary range, from 40,000 (€58,000) to 50,000 plus bonus for developers up through senior directors commanding salaries of 300,000 to 400,000, bonuses extra.
'It's difficult to find good candidates in that market, particularly in banking,' Sharp says. 'It is a candidate-led market, and clients have to move quicker to hire someone they want. We have had to educate them in that.' The company maintains a large database and uses that plus the recruiters' networks to find the right candidate, inevitably raiding one firm to fill an opening at another.
That action, of course, generates another opening that recruiters have to fill. One bank CIO refers to the London job market as a fishbowl with staff swirling around from one firm to another within the glass confines of the bowl.
New York filling in gaps
Hiring was strong throughout 2004 and that will continue, says John Carter, who specializes in financial IT for the Hagan-Ricci Group in New York. 'A lot of companies that have underinvested over the last two or three years are going into the marketplace,' Carter says. 'It's not like the dotcom arena; it's more controlled but it is very, very active right now.'
The IT hot spot is derivatives, especially credit derivatives. Carter recently placed a senior derivatives developer at $275,000. 'These are jobs that look like the business, and they pay like the business,' he says. 'In these front office roles, they work directly with the trading desks and the analysts and they take the quantitative problems and produce technological solutions in trading systems. It requires hard-core, work-on-the-fly developers who know how to translate business into technology.'
Bennett at McGregor Boyall is also finding the lines between traders and technical support staff blurring because traders are developing expertise in technology; that means technologists need to be experts in both computers and finance. 'We won't look at technologists that don't have a firm understanding of the particular business area,' he says. 'We get developers who have created their own trading strategy and back-tested it for three years.'
Without that expertise, you could see your job move overseas in the continuous wave of outsourcing. 'There are a million Java programmers in outsource facilities in India, for example, who can bang out Java code, but they won't have the particular domain expertise that firms want,' he says. 'You're much better off if you know an area such as emerging markets derivatives and Java so you are able to program front office systems around your expertise.'
Jonathan Charley, managing partner in the global banking group at Unisys, says that India continues to be the largest source of off-shore development skills but not the only one. Spanish banks are sending some work to Latin America, France is using development shops in North Africa, and Germany tends to draw from Eastern Europe.
Multiple offers on tap
Banks are competing hard for such highly qualified IT staff, and they are ready to pay, says Bennett.
Candidates are receiving multiple offers these days, a change from a few years ago when the hiring firms called the shots. 'Salaries are not nuts yet, but companies realize it is back to a more competitive marketplace than it has been for the last few years,' says Deissig at Ayers Group. 'We are seeing more aggressive offers, but they aren't being silly about it. They will make competitive offers, but the companies will walk away if they aren't accepted.'
Walking away from pay negotiations may not be an option for firms much longer, however. According to silicon.com, which covers the IT industry from London, a staffing shortage could hit in five years' time, with fewer women and young people opting for IT careers than three years ago.