Chicago Firms Seek Financial Engineers

Changing technology is pushing Chicago's financial companies - particularly trading firms - to compete for engineers. In demand are professionals with network expertise, software programming skills and financial engineering backgrounds.

"There is a tremendous amount of activity in Chicago right now, even compared to two years ago" says Rich Moss, president of Atlanta-based Moss Search, a recruiting firm which focuses on placing IT, trading and quantitative professionals within hedge fund shops and prop trading firms. "There is strong growth in firms doing high frequency trading, and many of those firms are centered around Chicago."

Ilya Talman, president of Roy Talman & Associates, a Chicago search firm specializing in IT and capital markets and trading, says that the market for tech professionals in Chicago has developed primarily because the derivative exchanges there have been stronger than in other cities. "Chicago has developed into a world hub of electronic trading," he notes.

The pace of hiring for engineers has increased steadily since the fall of 2007, and has even picked up this year, says Moss. He attributes this growth to rapid changes in the financial marketplace, noting that technology is one of the main sources of differentiation between firms that are employing similar trading strategies. "These firms are doing millions and millions of trades, going in and out of the market in a fraction of a second.... Even if your strategy is great, the way you apply technology may make all the difference." In most of these firms that comes down to speed. "Their network has to be faster, or at least as fast or at least as stable, as the next firm's, so engineers who can help make that happen are more in demand than ever."

Network Engineers

Network engineers, who concentrate on designing and maintaining networks so they're faster and more stable, are especially in demand at senior levels. For firms that require state-of-the-art engineering, Talman says, "the trading is only as strong as its weakest link," and experienced network engineers are an important part of ensuring the trading systems can connect with exchanges all over the world. Because demand is so high for these professionals, academic or experience requirements are less stringent, he notes: As long as the person has talent, even a four year degree might not be required.

Software Engineers

Moss describes the market for software engineers as "hot," especially for individuals who can work with front office trading systems. C++ and C# are the main programs used by trading firms, although Java and a few other languages may also be employed. To land these positions, candidates need a bachelor's degree in computer science or in a strong hard science like physics, Moss says. While many employers hire individuals with three years of experience, they see candidates with five to ten years as even more attractive.

While superb programming skills are needed, familiarity with financial markets is not always a requirement, according to Talman, who notes these job functions are "more about programming than finance." However, candidates with knowledge of financial trading applications are more attractive, he says.

Financial Engineers

Financial Engineers are often highly educated professionals with Ph.D.s in computer science, math, physics or financial engineering (a relatively new degree). They possess software programming skills and have an in-depth understanding of a specific market, usually involving derivatives like equity options or the futures market. Generally, Moss says, financial engineers are on a track to become a "full blown quant analyst."

Luring Engineers from Other Markets

Both Talman and Moss say engineers with strong real-time development skills can jump into finance from other industries. Numerous engineers who have put time in at Motorola, Lucent, AT&T, defense contractors like Raytheon, or even gaming industry firms know how to develop high throughput, low latency code. Such people are attracted to financial firms who are doing similar things, but offer the potential for higher compensation.

"In most every case in these other industries, you'll hit a ceiling," observes Moss, who says engineers tend to "max out" at compensation packages around $110,000 in the Chicago area. The only way to increase compensation is to go into management, which takes professionals away from hands-on technology development that may be their main interest.

In finance, on the other hand, "you can work on an important technology project and have a direct impact," he says. And the pay? Moss says developers with three to five years of experience in the sector can earn "well over $150,000."