From the monthly archives:

July 2012

There has been a significant media attention on bonus payments and reform within the banking sector across the globe, particularly in the UK and Europe. However as 2011 progressed, the issues in Europe magnified and towards the close of 2011, there were job losses and hiring freezes.

Status in the Finance Sector

According to Hudson’s “Banking and Financial Services 2012 Salary Guide,” with the markets in apparent turmoil and a continuing Eurozone crisis, recruitment levels will continue to be low in 2012 in the finance sector.

Increased competition for technical accountants

According to the guide, despite the decreased level of recruitment, candidates that moved into a new job expected a minimum 10 per cent pay rise. This reflected increased competition for technical accountants with investment banking experience, rises in staff turnover, and small opportunities for growth, expansion and investment hiring.

There was also a restructuring of compensation packages, which meant less of an emphasis on bonuses and ultimately less of a motivation for employees to make a move to another employer. Culture and work-life balance are now increasingly important factors for candidates considering a move.

Demand for financial controllers

There was greater demand for financial controllers in 2011 than in previous years and an increased call for management accountants who could drive businesses forward. Also sought after and in short supply were technical accountants with strong International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) experience, primarily as growing organizations focused on contractors with core technical accounting skills. The investment banking employers with competitive and attractive compensation packages were able to secure the best technical professionals.

Regulatory reporting experience was also in high demand, corresponding to new FSA and compliance related requirements that led to ledger implementations and alterations to improve the accuracy of reporting.

Steady demand for fund accountants

According to the Hudson’s guide, steady demand has been seen for experienced fund accountants, candidates with good regulatory reporting experience and proven finance directors. Candidates moving to another investment banking company could expect a pay increase of approximately 10 percent, depending on how critical the hire was, but bonus percentages largely stayed level with the previous year.

Thus, with the markets in apparent turmoil and a continuing Eurozone crisis, recruitment levels are expected to be low in 2012 and also for businesses to focus on replacement hires rather than growth. Investment banking employers are expected to focus on strategic hiring and it is likely that they will be looking for technical accountants, internal auditors and regulatory reporting specialists.

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The technology world continues to attract talent. This is particularly true of Investment Banking, where ongoing investment in Information Technology remains critical to the success of a business and is seen as a key differentiator.

According to the recently published “2012 Bank Systems/Wall Street Salary Survey” by Information Week, the market for IT talent in the financial services sector is strengthening and shifting in focus. However, total compensation for IT staff and managers has been relatively flat.

Median Pay

According to the 2012 Bank Systems/Wall Street Salary Survey, salaries and total compensation for IT staff and managers are relatively flat from 2011 levels. Median base salaries for IT staffers remained at $90,000, while median total compensation for this group increased $2,000 to $99,000 in 2012. For managers, median base salary dropped to $117,000 from $120,000 in 2011, while median total compensation, including bonuses, for this group dropped to $130,000; nearly returning to its 2010 level.

Skills in Demand

Specific areas in high demand are software architects, data analysts and project engagement managers. Both managers and staff respondents in the survey cited an array of business and technical skills they believe to be critical to their jobs. A majority of the participants said aligning business and technology goals was critical, along with integrating enterprise applications and collaborating with internal stakeholders.

Feeling Secure

The economy has had an impact on IT staff and managers, especially in Investment Banking. Nearly half of staff and managers received a raise of less than 5 percent. One-fourth of them saw benefit cuts.

Still, respondents to the survey seem to feel more secure about their jobs than they did the past few years. Over 39 percent of staff reported feeling very secure in their positions, up from 30 percent in 2010. Similarly 45 percent of IT managers said they feel very secure in their current jobs, up from 41 percent two years ago.

Want Ideas Implemented

Technology has made organizations flatter and less hierarchical, and employees’ career goals have changed accordingly. IT staff and managers are now looking for greater challenges, and want their ideas heard by decision-makers. Previously, career advancement meant a better title and a couple-percent bump in salary. Now career advancement means new responsibility and the chance to see their ideas get noticed and implemented.

It would be an understatement to say the past several years have been rough for all facets of the Investment Banking industry. IT professionals who up-skill themselves by acquiring the right skills can make themselves seen as clearly valued by their prospective employers, and survive and thrive in the modern Wall Street IT organization.

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While the media is abuzz with stories of graduates languishing in unemployment, graduates from top schools in computer science and other majors are starting to get multiple offers from investment banking firms.

According to technology executives at Wall Street firms, campus recruiting at the top universities in computer science, engineering and other technology-related majors has become increasingly important for building a leading-edge investment banking firm. With the rise of social media, mobile apps and other innovative technologies, firms are looking to the colleges as a rich source of young IT talent. When the newly recruited Chief Technology Officer recently joined Blackstone Group, the specialist in private equity and alternative asset management advisory, one of his first initiatives was to start on-campus recruiting program by targeting leading technology schools such as Carnegie Mellon, Rensselear Polytechnic Institute, University of Pennsylvania and Stevens Institute of Technology.

New Thinking

While investment banking firms continue to hire more experienced professionals, hiring newly minted graduates has its advantages.  New hires are not encumbered by the old ways of doing things, as they bring in fresh ways of thinking. Wall Street firms are not confining their search to only the top schools. They feel rather than hiring the bottom of the class at the top schools, it’s logical to hire the top of the class at the second-tier engineering schools.

Companies like Sapient Global Markets, a provider of consulting services to the capital markets and commodities organizations, feel that in the wake of the dot-com bust in 2000, fewer of the top students pursue the computer science major. Hence Sapient hires from a broader population of majors.

Code vs Culture

Several Wall Street CIOs downplayed the importance of knowing a specific computer language, contending that the students with the right aptitude can learn on the job. Regardless of what degree they earn, or where they earn it, graduates must have certain skills to join Wall Street IT organizations. While capital markets CIOs and CTOs typically want IT candidates to know specific languages such as Java and C++, the so-called hard IT skills are not the only sought-after skills. Today, with the emphasis on collaboration and team and fitting into a firm’s culture, the so-called soft skills are gaining greater attention.

Sapient feels that while Java and Microsoft .NET are “hot” languages, anyone with a visualization background and familiarity with apps and interfaces is a potential hire. Sapient even hired English majors who have the right aptitude to learn with fantastic people skills.

A few leading investment banking firms have started borrowing a page from Google and Silicon Valley companies testing candidates’ aptitude by asking them case-type questions and logical questions to gauge how they troubleshoot and solve problems.

Thus despite the view that the U.S. economy is sluggish and it’s hard for new college graduates to get a job, financial services firms are hiring. In fact, top Investment Banking firms are reaching out to the elite colleges in a huge way to bring in the best and brightest graduates whom they can groom to fit their cultures.

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Investment Banking Jobs What to Expect

July 9, 2012

Investment banking careers are not for the weak or the caffeine-averse. This quick hit article is based on an interview with a former colleague about his experiences in investment banking.  As with most finance careers, the following is expected of you, whether it’s stated in the job description as a requirement or not: Willingness and […]

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