Without a doubt, the last 18 months have been some of the most bipolar hiring markets in modern times. The global pandemic spurred the growth of many digitally-enabled businesses in multiple verticals, and completely shut down hiring in others.
The Impact of the Global Pandemic on Hiring Markets
The enforced rise of full-time remote and hybrid working situations, atypical market conditions and the fear of enduring lockdowns turned hiring on its head. Financial Services have had their fair share of hiring freezes, mass redundancies and growth stories – here we look at the current state of play within buy-side operations.
The Shift in Demand for Tech-Savvy Candidates
The ever-present requirement to digitize and keep abreast of technological advances has seen a growing focus on tech-savvy candidates at all levels. Additionally, the disruption to natural hiring cycles from late Q1 2020 through to Q2 2021 saw pent up demand for talent at all levels, that was, if anything, exceeded by a desire across the board to move to pastures greener after one of the more difficult years in living memory. Experienced professionals have voted with their feet, leaving firms that were slow to adapt to the new realities of a post Covid-19 workplace. That was particularly noticeable in companies that reported record profits and revenues in 2020, and then did not pass on that positive growth to their employees with pay rises or improved bonuses – until forced by very public anger and poor press.
Pay Structures and Talent Retention in the Financial Sector
The response has been dramatic. Led by the likes of the Tier 1 US based Corporate & Investment banking giants, and their peers in Professional Services, blanket pay rises have been rolled out. Those increases will take their time to filter through the market on a global level, but firms that are not responding in a positive fashion by following suit – are seeing their people fighting to get out of the exit. Whilst most noticeable in front office roles, a similar pattern is being repeated through key middle and back-office verticals, notably Compliance and Operations.
Firms that are sticking to pay structures that have not kept a-pace with market gains are seeing talent being taken from them on lateral moves – with significant pay rises - not just promotions. Some of the greatest activity is taking place around the 4-7 year grouping. Analysts and Associates are running several processes simultaneously (aided and abetted by WFH). Some truly surprising numbers are being thrown at promising juniors, and we are seeing some serious uplift for candidates who are undervalued by their current employers.
NB: total compensation firms no longer have it all their own way, and a lot of firms are seeing a need to increase the bonus pot at lower tiers to retain their people. A 10% thank you at year end might no longer going to cut it. As we gear up for the 2022 hiring market, with experienced talent in short supply, expect to see continued upward growth in the near term.
Salary Ranges and Expected Uplifts by Experience Levels
Years of Experience
Current Range Base Compensation
0 - 1
35 - 45K
10 - 25%
2 - 3
45 - 60K
15 - 25%
3 - 4
50 - 70K
20 - 25%
4 - 6
55 - 85K
5 - 7
65 - 90K
80 - 120K
15 - 35%+ ***
90 - 135K
15 - 35%
110 - 140K
15 - 20%
How Work from Home (WFH) Affects Salary Expectation
The impact of working from home on salary expectations will depend on a variety of factors and will vary from person to person. With the rise of remote work, companies may offer more flexibility in terms of location, but this may also mean that salaries could be adjusted to reflect the cost of living in different areas.
Additionally, working from home may blur the lines between work and personal life, which could potentially lead to longer working hours and expectations of being available outside of traditional office hours.
However, it could also lead to increased productivity and cost savings for both the employee and employer, which could potentially result in higher salaries or bonuses.
Factors Affecting "Fair Compensation" in Investment Management Operations
NB. Outliers have been stripped out - there are 1st year graduates in back and mid-office positions starting on 55-65K base salaries at market-making quant funds and some Tier 1 CIB. Candidates with 18m-36months have engineered moves up to 70K starting base. Additionally, there is a large variance in the relatively experienced professionals (3-7 years) grouping. We are seeing clients and competitors lose and attract talent on lateral moves due to perceived failures to provide "fair compensation," which can be due to a number of factors, not least constrained organisational pay bandings.
*This is taken from c. 100 conversations at various levels in the last 3 months. It is based off the figures provided by candidates for roles they have been represented for by Rutherford, and other Agencies, as well as confirmed offers made. Additional data has been pulled from Open source compensation bandings. Upper ends of the grading are populated predominantly by US firms on both buy and sell sides. A significant increase is happening across the board due universal payrises at Tier 1 CIB out of the US, which are forcing the market upwards. We have stayed clear of retail banking, but have included Fintech, payments and digital banking professionals (Revolut, WorldPay, FIS, etc).
**Non-Grad Scheme direct entrants. Most grad-schemes are underweight by 10-15%
***A significant number of moves being made at VP/SVP levels for sizeable jumps in base compensation. Pay variations between Asset Managers and Alternatives firms at these levels can be anywhere between 10-40% across back office. Up to this point, most Tier 1 & 2 buy-side firms have a better track record with paying out target bonuses, compared to consultancies and sell-side firms. Tier 1 CIB (US + Barclays) maintains parity in the main, but normally only for FO roles.
For more investment operations salaries or assest management compensation surveys peruse Rutherford's Salay survey page here.