Big data, smaller salaries

If you’re a big data specialist, data scientist or whizz kid who can help leverage huge amounts of data to give banks a trading advantage, you should – in theory – be hot property.

However, not only are investment banks and asset managers not going overboard to bring these experts into the organisation, they’re also paying data professionals less than before the global financial crisis hit.

Market data professionals in investment banking and asset management are still earning good money, but they’re being pressured into taking smaller salaries and more diminutive bonuses when switching roles, according to a new salary survey by consultancy BST America.

A senior regional or global data executive at a large investment bank should now earn between $200 and 240k, said the survey, compared with $177 to 287k in 2006. Bonuses meanwhile, now peak at $50k, compared with an average of $60k before the financial crisis.

A director of market data earns slightly more on the sell-side than on the buy-side. Asset managers pay $140k, suggests the BST America survey, compared with $150k in an investment bank.

“Usually, when you need to replace someone, you need to offer a higher salary, but firms are actually offering lower salaries," Sara Crowe, managing director at BST America told Insight Market Data. “And in some firms where being under-resourced is more the norm than the exception, employees are not getting raises commensurate with their extended work hours or enhanced responsibilities. In fact, many firms surveyed indicated that they expect salaries will be basically frozen or dropping over the next three to four years."

All of this goes against the popular assumption that financial services firms are clamouring to recruit people with big data skills. A study by Celent released earlier this year suggested that budgets for hedge funds and investment banks’ big data investments would hit $2.4bn annually by 2015 and that firms will “struggle to hire and attract the experience big data staff they need”.

Despite this, specialist IT in finance headhunters tell us that the big data revolution within the large banks has yet to manifest as increased hiring. “There’s simply a trickle of roles, which never appears to be in danger of becoming a flood,” said one recruiter we spoke to.

One explanation for this could be that banks are more likely to use consultants to carry out the work. With recruitment budgets constrained, banks are instead shelling out more to bring in consultants without it affected restrictive headcount budgets.

“Ultimately, consultants are more expensive, though there appears to be a different expense line associated with hiring costs – which, with salary, benefits and insurance, can add up to 1.6 times someone's base salary – whereas with consultants, you are booking those costs as expenses, which is a totally different budget," said Crowe.