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Caught Between Record Layoffs and Hiring Freezes, IT Execs Face a Buyer's Market

With record layoffs focused on the financial sector, IT execs formerly in high demand may find themselves in high supply.

Location Counts in IT, Too

Certain regions are likely to be more directly hit by the financial crisis than others, with cities such as Seattle and New York likely to see a disproportionately high number of bank technologists laid off. It has been reported that thousands of financial jobs will be lost in Charlotte, N.C., where Wachovia ($764.4 billion in assets) -- which is to be acquired by Wells Fargo -- is based. Meanwhile, Boston-based Aite Group predicts that hundreds of jobs will be eliminated in that city as Bank of America (Charlotte; $2.7 trillion) shifts its brokerage business to New York, where its latest acquisition, Merrill Lynch, is based.

On the other hand, there are indications that the demand for financial technologists in more-rural areas remains stable (see related article on community bank technology priorities, page 10).

Generally the crisis has increased the supply of financial IT job seekers while reducing demand for them. "Hiring freezes are the norm," relates Chris Twyman, CEO of Zapoint, a Brookline, Mass.-based firm that uses software algorithms to find the best applicant for a vacancy.

Some banks, however, looking to build retail deposits to counter the credit crunch, are moving to take advantage of the current environment. Frankfurt-based Deutsche Bank ($3.1 trillion in assets), for example, recently said it would concentrate on its core market and add 400 retail branches in Europe. Spokesman Klaus Thoma told BS&T that the bank would hire 2,500 new employees, but they would be financial advisers, not technologists, so he declined to be interviewed for this article.

London-based global bank Barclays Bank ($2.27 trillion in assets) has taken advantage of its relatively strong position to expand internationally. "Now it is a good time to expand, ... and we can pounce very quickly," Frits Seegers, CEO of Barclays' retail and commercial banking worldwide, told local Singapore media shortly after Barclays announced in late September its plan to add 1,500 new bank technology jobs there over the next five years. About 500 of those positions will be filled by the end of next year, the Singapore Straits Times reported. The "high-value jobs" for software engineers and others will support Barclays' retail and commercial banking worldwide, Barclays told the daily newspaper.

Barclays declined an interview request, but spokeswoman Phillippa-Jane Vermoter directed BS&T to coverage by the Singapore Straits Times. According to the paper, Seegers added that "It is still quite costly" to acquire banking franchises in emerging markets, but some buying opportunities had emerged in the U.S.

All of this followed Barclays' mid-September acquisition of the American assets of bankrupt Lehman Brothers (New York), once one of the world's biggest investment banks. Barclays announced earlier this year that it would cut almost 2,000 technology jobs in the U.K. and move them offshore to Singapore, India and Hungary.

Some Pre-Crisis Recruiting Challenges Remain

While plenty of IT talent is suddenly flooding the job market, other challenges banks faced in recruiting IT personnel before the crisis still endure. At the top of the list, sources suggest, is the increasing need for people who are both business- and technology-minded.

"It's the combination of business and technical skills that's hard to find versus any specific technology," says Jerry Luftman, lead researcher of the Society for Information Management. SIM's 3,600 CTO/CIO members, one in six of whom are in financial services, rated business-technology integration as their top challenge in the organization's annual survey, which was released in November.

"Years ago you needed a lot of grunts to migrate to Y2K," adds Luftman, who is also a professor at the Stevens Institute of Technology in Hoboken, N.J. "Today you need not only technology skills but to understand management, business and the industry you're in, and to have good communication skills."

The increasing complexity of technology creates another challenge in the recruiting process. The growing importance of the Internet, for example, makes Web developers, those hip to a Web 2.0-transitioning-to-a-3.0 world and Web security experts particularly prized.

"Developers aren't keeping pace" with the rapid advances in technology, said Eric Maass, a director with Lighthouse Security Consulting (Lincoln, R.I.) during a BS&T webcast on Internet security in early November. He noted that the technical specifications for individual security standards run to hundreds of pages and there are dozens of such standards. As a result, the salaries of those truly expert in Internet security are "going through the roof," representing a huge hidden cost of running banks' Web sites, Maass suggested.

Union Bank's Hoffer happens to be seeking a Web application security expert to monitor the bank's site and protect it against attempted attacks. He says he already is preparing to have to lower his standards as he searches for the ideal candidate. "It's still a fairly niche skill set to find," Hoffer says, explaining that he may have to settle for someone who has no banking experience. "But for other positions," he adds, "I need more financial services global knowledge."

Lindsay Soergel, SVP for channel technologies and enterprise information systems with Atlanta-based SunTrust Bank ($180 billion in assets), agrees that Web developers, proficient in Java and HTML, are in high demand. However, she adds, "They have to be able to see the bigger picture -- front end, integration and core systems -- and to know the implications of their work for others."

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