Guest comment: The poor relations
Stephen Feline, consultant at search firm The Kaizen Partnership on why most banking IT staff won't be getting mega-bonuses this year.
As an IT Headhunter, I'm frequently asked why certain technical staff working in financial services are paid substantially more than others. In an industry where IT skills are supposedly at a premium and as techies' academic backgrounds are often just as impressive as those of people in the front office, it hardly seems fair.
My answer is that it's down to the rules of the market. The truth is that people who make money make money. Those who are closer to the revenue generation, be they sales, traders, quants or coders, will be rewarded proportionately to the profitability of their desk.
This means some areas of IT get better bonuses than others. For IT professionals who are rolling out a state-of-the-art program trading system that will generate over 4bn of trades a year, bonus season should be a happy time of year.
By comparison, if you're working on a back office system where they could buy in a tried and tested standardised product from a vendor, or on low level projects that could be moved to an offshore coding centre, what would the justification be for a premium if your skills can be obtained for half the cost elsewhere?
Therefore, if you want to make big money in a bank, get closer to the revenue generators.
The best business groups realise that good IT staff are absolutely critical to their ability to make money. Continued strong profits on the Credit and Commodities Desks suggest that technologists working on trading systems for the more complex structured products in these areas are set for bumper bonuses in 2006/7.
Unfortunately, these roles are often closed to those outside the sector due to the complexity of the work involved. After all, what other industry trains you to work on the rapid design/development of real-time, highly scalable, ultra reliable systems utilising real time messaging and market data and the pressure of millions of pounds going down the tube weighing over you?!
