Banks Battle For Big Data Talent
The intense global competition for professionals at all levels with leading-edge analytics and big data capabilities is helping drive improvements in the financial services industry for IT talent, according to the h2014 InformationWeek Analytics Salary Survey.
Overall, the IT hiring and salary picture for the financial services industry is improving, although gains since last year's survey have been slight and not dramatic, according to the more than 1,250 banking and securities IT professionals who participated in the 2014 InformationWeek Analytics Salary Survey. Salaries for banking and investment firm IT staff and managers have risen slightly since 2013. The median base salary for IT staff climbed 1.4 percent to $98,000, while the median base salary for managers has leveled off at $120,000. Total compensation -- including bonuses and other direct cash payments received during the previous 12 months -- rose for both groups, a 1.9 percent jump for staff, and a 2.6 percent rise for managers.
Noteworthy at banking and capital markets firms is that female IT staff reportedly received larger bonuses than their male counterparts. Women in banking and investment firm staff positions received a median of $9,000 a year in bonuses, compared to $5,000 for male staff.
In general, more than three-fourths (77%) of IT staff and 86% of IT managers said they expect bonuses in 2014. The bonuses are most often tied to personal and corporate performance for both groups, although a quarter of respondents said that their bonuses were tied to division performance, and slightly fewer said their bonuses and other cash compensation was tied to company profit sharing and/or completing project milestones.
Hot Areas
The rewards are greatest for those with the skills most in-demand. Says John Reed, senior executive director for Robert Half Technology, the skills that are the most sought-after by banks and securities firms include anything that can help these organizations deal with, protect and utilize their data. "These organizations are looking for people who can help them corral the data and make better business decisions and to secure the data, as well as anyone who can assist them with their mobile banking efforts," Reed explains. "The big deal is big data. If you can harness it, you can benefit, so financial firms are funding those initiatives right now and hiring individuals with that background."
[Capitalizing on Big Data Requires Banks to Change Their Cultures]
The problem is that these skills are currently in demand at every kind of organization, not just financial services. "Competition is very high and close to zero unemployment. Everyone wants these skills," Reed adds. "Depending on the specific technology and location, for most of these individuals, income has increased six percent to eight percent each year, although we've seen some double-digit compensation increases year-over year."
Security is another hot employment area at financial firms, notes Bhushan Sethi, financial services people and change leader at PwC. "With the risk of cyber terrorism, banks and investment firms have a demand for skills around security," he points out. "Financial institutions are hiring people with atypical backgrounds, many having worked in the tech sector, public sector and government agencies, because they have experience in and a focus on networks and security." Sethi also finds that financial institutions are seeking professionals with cloud-based, analytics and social media skills, since "every bank is leveraging Twitter around their brand and fine-tuning their response mechanism."
Qualified Satisfaction
Regardless of their specializations, IT staff and managers are generally happy with their total compensation packages, according to the InformationWeek Analytics research. In this year's study, 58% of staff and 60% of managers were either satisfied or very satisfied with their total compensation package, with only 16% of staff and 15% of management reporting dissatisfaction.
Beyond compensation, it appears that most IT employees in banking and capital markets are satisfied with the comprehensive aspects of their job -- or at least most aren't dissatisfied. A majority of both IT staff (63%) and managers (63%) expressed satisfaction with all aspects of their job, including compensation, benefits and other aspects of their employment relationship. Only 13% of each group said they were either dissatisfied or very dissatisfied with their jobs.
Some aspects of their jobs that are most important are intangible. Both groups told InformationWeek Analytics that job or company stability is important to them, in addition to a flexible work schedule, vacation time or paid time off. Forty percent of IT managers and 37% of IT staff also said that it matters to them that their opinion and knowledge are valued, others cited a telecommuting option, job challenges and atmosphere and recognition for doing their jobs well.
Since in general there's less money to go around in bonus pools, says PwC's Sethi, financial firms are looking at ways to engage IT employees. "Organizations are looking at guiding employees' career paths inside technology, maybe into the business, or even with some of their external business partners, giving employees some flexibility in how and where they work, and thinking about what other investments they can make in individuals, whether it be training, sabbaticals, or offering a part-time university course," he explains.
Looking Around
A majority of banking and investment firm IT staff (59%) and managers (55%) said they are currently sufficiently satisfied with all aspects of their current positions that they aren't looking for another job. However, 41% of staff and 45% of managers reportedly are looking around, either somewhat or actively. A higher percentage of banking and investment IT staff and managers are looking around in banking than in insurance, where staff (63%) and managers (61%) are happy where they are.
Concerns about compensation trends is among the factors causing some financial services IT professionals to job hop. One survey participant stated that as banks put downward pressure on salaries, moving between companies is the best way to get any significant compensation increase. "Base pay increases of 2% to 3% barely cover inflation but are the norm in some industries, even for top performers," says the respondent. "Moving between jobs, on the other hand, gave me opportunity to get 10% and 12% pay increases. If companies want to retain top talent, they need to recognize this issue and change policies."
Why do IT professionals in financial services seek new positions? Predictably, nearly three-fourths are seeking more pay. More than half of IT staff (52%) and 43% of managers surveyed are looking for more interesting work, and 42% of staff and 39% of managers are looking for more personal fulfillment. Other considerations cited are a dislike for the current company's management or culture and a lack of job stability; some employees are also looking to assume more responsibility or for a more dynamic company.
The InformationWeek Analytics Salary Survey respondents appear to recognize some trade-offs come with job changes. Increasing job satisfaction was cited as the number-one reason bank and investment firm IT staff and managers would accept a lesser position or title. A better location, more job security and a better company are other reasons why many employees at all levels would accept a demotion. About one-fourth of staff (28%) and managers (24%) said they would accept a lower position or title if the new position meant more flexibility.
Flexible Options
Job flexibility -- whether in location, schedule or other components of their employer relationship -- has become a hot button for many workers, especially for Gen Y and Millennials. "This group wants feedback and interactions in person, but they also want flexibility," says PwC's Sethi. "People want to do things around their lifestyle. It may not equate to working from home, but employees want the flexibility in how, when and where they work."
However, Sethi adds, many banks and investment are not on the cutting edge when it comes to a flexible work environment. "Banks and investment firms lag behind other industries in terms of flexibility -- work from home, compressed schedules, even things like job sharing -- all because it's not part of their culture," he says. "Many big banks still get work done through an in-person culture."
Younger employees are looking for the work-life balance, says Robert Half's Reed. "It's nothing new, but they're taking it to a new level," he says. "It's important to this group that their employer helps them stay on an even-keel. Financial firms won't be able to recruit these generations in the workforce if they don't accommodate this demand."
Working Together
These kinds of accommodations are happening in a business environment where collaboration is growing in importance in financial services IT. "Technology professionals are a part of everything these organizations do, from rolling out a new product or new channels and developing a service model to deal with them, to launching a marketing campaign and developing metrics to track its success," PwC's Sethi says. "It's an old issue with IT, but it's a heightened challenge right now, given the role of technology in driving the banks' business models and strategy."
Robert Half's Reed notes that savvy leaders and companies are identifying strategies to get people out of their silos. "The data and software and online people are talking," he says. "The best way to harness the brainpower of the organization is to have different areas collaborating where they typically don't do so."
In many cases, IT professionals are actually embedded in other organizational areas. About a third of banking and investment firm IT staff (32%) and 35% of IT managers who participated in the 2014 InformationWeek Analytics Salary Survey said they spend at least 50% of their time with peers in a business unit outside IT. And 12% of staff and 20% of managers are considered embedded in a non-IT business unit.
Train to Retain
This is why training has become such an important part of the IT staffing picture in financial services. Robert Half's Reed points out that banks and investment firms would be well-advised to look within their organizations for critical IT talent. "Savvy companies realize the starting point is with people already on their team. They're re-recruiting these individuals and speaking with them about their career paths," he points out.
InformationWeek Analytics salary survey participants identified many types of training they'd find valuable. A majority of IT staff (71%) and managers (55%) said they'd value technology-specific training, and certification courses were also deemed valuable. "Certification is very important in certain IT fields for career advancement, pay increases, and future career opportunities," says one respondent.
Although many survey participants said they'd value training, just more than half (53%) of staff and 61% of managers attended company-paid training in the past year.
For more on 2014 salary trends in the financial services industry, download the full 2014 Banking & Capital Markets Salary Survey.
Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio