Banks today must focus on improving employee engagement, investing in more training, and providing interesting and flexible work environments if they expect to recruit and retain management and staff. These trends are affirmed by the 1,184 banking and securities IT staff and managers who responded to the InformationWeek 2013 U.S. IT Salary Survey.
"The way to engage technology folks is to give them something interesting to do, support to do it, IT training if they need it and a coach to help them learn new things," says Judy Pennington, director of human capital at Deloitte Consulting.
Pennington advises financial firms to offer flexible workplace options in order to better engage employees. "The days of working 24/7 are gone," she says. "We can work our fingers to the bone for special projects, but we all need work-life balance. Engagement is about learning something new, doing cool work and knowing that they're valued for what they bring to the table."
"Money is good, but money isn't the only reason people come to a job," says Steve Rubinow, CIO of the marketplaces division at Thomson Reuters. "Employees want to work in an environment where they'll be challenged, where they feel like they're accomplishing something important."
While employee engagement isn't all about money, it's imperative for financial firms to offer competitive salaries. Compensation will always be an issue, but it's generally not the main reason someone takes -- or leaves -- a job.
This year's survey reveals that base salaries for staffers and managers are increasing over 2012 levels, although the median increase is a scant 0.9% for staff and 1.7% for managers. The median percentage of change in total cash compensation, including bonuses and other direct cash payments, rose 1.1% for staff and 2.3% for managers.
After seeing base salaries remain flat, at a median of $90,000, from 2011 to 2012, staffers experienced a bump in 2013 to $94,000. Management saw a similar lift after suffering a drop from 2011 to 2012: Median base salary rose from $117,000 in 2012 to $120,000 for 2013. Total compensation also improved, with staffers bringing home $101,000 (compared with $99,000 last year) and managers tallying $134,000 (vs. $130,000 in 2012).
Most managers (89%) and the majority of staff (75%) expect a bonus this year. Bonuses are most often tied to personal, corporate and division performance, as well as completing project milestones and company profit sharing.
In some financial services segments, salaries are relatively nominal because they can be supplemented with big bonuses, says Rubinow; however, "prospective employees on both the staff and management levels want a higher salary because bonuses aren't as dependable as they used to be," he says.
Pay Gender Gap Persists
A gender gap in base pay persists on both the IT staff and management levels, although survey results show that this gap is narrowing. Female managers, however, receive less in the way of total compensation than their male counterparts, with women in managerial positions earning about 20% less in total than men in the same level jobs. One survey respondent, a female VP of a large financial services firm, expresses her dissatisfaction: "I have two peers, both male. They both earn about $25,000 more annually, which is very frustrating."
Pay may not be everything, but it's important, says Mike Barker, senior VP of executive search firm Experis North America. "Employees experienced salary cutbacks starting in 2008, and there hasn't been much movement in salaries," Barker says. "In some cases, they're catching up. But at the end of the day, in addition to competitive pay, IT folks are also looking for good projects, cool work, positive life-work flexibility and experiences that will enhance their resumes."
The good news is that a majority of staff and managers are satisfied with their total compensation packages. Overall, 61% of staff and 59% of managers say they're either very satisfied or satisfied with their compensation packages. Fewer than 20% from each group say they're dissatisfied or very dissatisfied with compensation.
IT roles are transforming as needs change and technology evolves. For financial firms, an ideal IT employee must have a combination of top-notch skills and business savvy, says Thomson Reuters' Rubinow. "Technologists need to be adept in one or more technologies and be above average. Financial organizations want people who are sensitive to business needs and have an appreciation for why they're doing things and how they benefit the business. They want technologists who can provide innovative ideas and collaborate with and act as a partner to the business. And, finally, financial firms need technologists who are aware of and sensitive to the costs of their activities and the impact on the bottom line."
Respondents to InformationWeek's survey tend to agree that the combination of business and IT skills is critical. "The line between what's IT and what's business will get more blurred as the use of big data expands," says one. "Those who can continue to straddle both worlds will come out ahead in terms of salary but will find job opportunities scarce."
It's always a challenge to find good people, Rubinow says. "No matter how soft the labor market is, no one seems to be able to find enough talented people," he says.
Jon Beyman, managing director of global operations and IT for the institutional clients group at Citi, says his group is hiring in places where there is a specific need. "In the institutional world these days, there's a big regulatory agenda, so we look for particular skill sets around domain expertise that would help us in some of our efforts when it relates to Dodd-Frank or Basel, for instance," Beyman says. "And in the past few years, anyone with domain expertise around information security has been in high demand."
A healthy number of respondents say their work involves formal responsibilities outside of IT -- 29% of staff and 44% of managers. IT staff most often had research and development, business development and financial duties, while managers most often had those same responsibilities as well as responsibilities in operations, supply chain and manufacturing. Fifty-four percent of staff and 73% of managers spend time with peers in a business unit outside IT.
Technology evolves so rapidly that it's imperative for technologists to stay on top of the latest trends. While survey findings indicate that banks and securities organizations are investing in their workforces -- half of staff and 61% of managers attended company-paid training last year -- some respondents say it's just not enough.
The economy clearly affects company-paid training, as well as employee engagement. "I have received employer-paid IT training in the past 12 months, but it is the first time since 1997 that an employer has thought training was necessary or valuable in my case," says one respondent. "I'm normally expected to 'figure it out' with any new technology or vendor by using any means that doesn't cost the company money. In my experience working for financial services companies, IT is viewed as a liability to be minimized, not as the engine that enables all of the processes that the company uses daily to serve customers and make money."
Training is often quick to go when budgets are tight. "I would say that at one time or other, everyone skimps on training, because it's considered low-hanging fruit when they need to make cutbacks," Experis' Barker says. "Three out of four managers say they're willing to pay for IT training and they do, but they provide training only on skills that affect the most visible or highest areas of payback projects. On the other hand, IT professionals have to invest time in their own certification and learning to augment what they're getting from their employers."
When it comes to training, some financial organizations aren't thinking ahead, Barker says. "Employers need to be thinking and working ahead to what their talent needs will be in the future," he says. "If you don't know your needs until you need them, you'll be behind the eight ball."
According to survey respondents, both staff and managers still look at technology-specific training and certification courses as most helpful in developing their careers, although both groups also value project management and business skills training. Managers also find training in people management skills valuable.
To get the most from employees, boost loyalty to the firm and retain good talent, financial firms are taking measures to engage their workers. "If people are engaged, they'll work more effectively and produce better results," says Deloitte's Pennington. "If they're not and working for an organization is just a job, they will tend to do only the minimum."
Financial IT professionals are highly engaged and work very hard, says Citi's Beyman. But it behooves organizations to create the right work atmosphere to foster that engagement. "It comes down to providing an environment where performance is recognized, where there are clear career paths and interesting work, and where staff and managers can feel like they're valued for their contributions," he says. "Create an environment where individuals can thrive."
Often that environment is at home, not in the office. One survey respondent who works full time from a home office says the benefits go both ways. "The company has embraced remote workers where possible, and it has lowered some costs and definitely helped morale and retention," he says.
Most respondents say they're at least satisfied with all aspects of their positions, with only 13% of staff and 11% of managers reporting dissatisfaction with their jobs. For staff, overall satisfaction increased three points over 2012 levels, while the metric is essentially flat for managers.
Job satisfaction is important, but higher compensation is the rationale for seeking new employment for about two-thirds of the 42% or so of respondents who are job hunting. More interesting work, personal fulfillment and more responsibility also figure highly in the decision to seek a new job. And both staff and management say the No. 1 reason they would consider a lesser position or title is more job satisfaction.
Job Security and Outsourcing
As the economy improves, both staff and management appear to feel that their jobs are increasingly secure. However, for some, that security is overshadowed by outsourcing.
"Outsourcing has become a fact of life," says Citi's Beyman. "The reality is, when you look at any large organization, it has a certain amount of offshoring. Where organizations can get the same or higher degree of output for lower dollars, they're expected to do it. The industry is always trying to be better, faster and cheaper." But according to one respondent, some banks and securities firms run the risk of sacrificing better for cheaper. "The biggest myth is that offshore outsourcing is about getting qualified workers. It's not. It's strictly about lower costs, even if it means lower quality," the respondent says.
Outsourcing will continue to threaten U.S. IT jobs, but banks and securities firms are looking to develop internal talent. "During the economic downturn and the IT 'belt tightening' that occurred, I fought a couple of times to keep my job. I'm feeling much more secure now, as our local U.S. talent is proving more proficient and skilled than the outsourced counterparts in India and elsewhere," says the respondent.
Outsourcing is adding to the workload for some financial technologists. Thirteen percent of staff and 21% of managers say outsourcing has expanded or added to their responsibilities.
Both staff and managers report feeling more secure in their jobs this year versus in 2012. Only 9% of staff and 10% of managers say they feel insecure about their positions this year, down from 13% in 2012 for staff and 11% for managers.
Thirty-three percent of staff and 41% of managers looking for new jobs say they don't like their companies' management or culture. "It's difficult for IT folks to work for someone they don't like, who isn't a visionary and who doesn't focus on their development," says Deloitte's Pennington. "Especially the younger generation of workers isn't as quick to say, 'I'm here for life.' And they're more likely to leave and go to a company that's more attuned with what they want."
Tech pros today not only can pursue a career path in IT, but within the company's business area as well. "More and more often, we're seeing technology people interested in the business itself," Pennington says. "Technologists who've been supporting one of the business areas, for instance, may become a part of the business team."
InformationWeek's salary survey reveals that both staff and managers are increasingly viewing a career path in IT and the potential for salary advancement as being as promising today as five years ago. Two years ago, less than one-third (31%) of staff and 36% of managers felt that a career path in IT was as promising. In the 2013 survey, that number has increased significantly for both staff (43%) and managers (46%).
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In general, the financial sector is still attractive to IT employees. "The compensation is generally high in this field; it's an information-based industry, where the product is information," says Thomson Reuters' Rubinow. "If you're a technologist, the financial services field is a great place to work because there are a lot of interesting technical challenges, and because what you do is integral to every area within the organization."
Get all our research data on salary trends for financial services IT pros in our full 57-page report. Find out what skills are in demand and are commanding top pay, and what keeps people motivated. Download the InformationWeek 2013 U.S. IT Salary Survey here.
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