Bonus or base in the battle for techie expertise?
Technology professionals with experience of developing trading platforms are in the privileged position of being courted by both investment banks and hedge funds, which is driving up pay packets within both types of organisations.
As we've alluded to previously, hedge funds have been pouring money into IT this year and recruiting development staff across a range of business areas. Similarly, investment banks are still hiring techies for various projects around the development of commodities, FX and equity derivative trading systems.
Investment banks are currently hampered by regulators' clampdowns on bonuses, which means base salaries have swelled by 20-30% in a bid to attract techies from competitors.
Within hedge funds, however, the focus has been on variable pay. According to new figures from ReThink Recruitment, bonuses have doubled for techies in hedge funds (sometimes guaranteed) and salaries for the top ranks have risen by 15-20%.
Man Group, GLG, Brevan Howard and BlueCrest are currently hiring for IT roles, according to recruitment sources.
The result is that techies are moving in both directions, suggests Nick Finlay, manager, specialist financial markets at Hays Finance Technology.
"Hedge funds have been recruiting for front office support roles and primarily C# development staff," he says. "Inevitably, technologists seeking a more collegiate working environment and greater bonus potential have moved from investment banks. However, the buy-side is still losing IT staff to banks which offer bigger base salaries and greater career progression opportunities."
But part of the reason hedge funds have felt the need to pay IT professionals more is because their reputation have been severely dented over the last two years, and the flow of techies looking to move from investment banking has been stemmed, suggests Mark Warburton, partner and sales director at IT in finance recruiters 752 Solutions.
"Hedge funds have always higher bonuses than banks, because IT roles are more closely aligned to the business, but they rarely pay north of 100k as a base," he says. "However, base salaries within investment banks have been spiralling and this, together with a perceived lack of security at hedge funds, means they're a much more attractive option currently."
