What is competitive compensation in Quant finance, and how can finance firms ensure their offer is also accepted?
Quant finance professionals are known for good compensation, but with the demand for talent having grown even stronger, the bar for substantial salaries has been raised even more. How can talent capitalize on this hot market, and how can firms also make their offers the number one choice?
Associate Vice President at expert financial talent partner Selby Jennings, Jonathan Billow, shares his thoughts on buy side and sell side salaries, as well as bonuses, benefits and how firms can sweeten their deals to become the most appealing prospective employer.
Buy side and sell side salaries
“Typically experienced Quant candidates on the buy side, that we would constitute as senior, have a base salary ranging from $185,000 to $250,000. However, we’ve seen an uptick in compensation for junior to mid-level candidates, and instances where those with 3+ years of experience are now earning $200,000 base salaries”, Jonathan suggests.
While the sell side is notorious for having very strict compensation bands, Selby Jennings has seen again an uptick in the salaries between Associate to Director level hires, as Jonathan explains:
“Across the board we’ve seen an average of 10%-20% increase in base salaries from where they have been historically, inclusive of both the buy and sell side. Guaranteed bonuses are typically offered to professionals that are leaving their current employer in Q3-Q4. However in this past year, there’s been a normalized approach to paying full year minimum guaranteed bonuses to candidates that join in Q1, and Q2.”
Bonuses and benefits
In addition to paying out higher base salaries and giving first year guaranteed bonuses, companies are also offering heftier sign on and relocation packages. Most companies are offering one time sign on bonuses subject to a one year clawback, in order to put together more competitive compensation packages, ultimately to entice candidates to join. Relocation packages are also becoming more common.
Jonathan suggests that, “Relocation packages have also been used as tool to sweeten the deal so to speak, for professionals that require relocation assistance.
“Interestingly since the start of Covid-19 a lot of candidates, particularly in Quant finance, relocated outside of the tri-state area in the US. As there has been an increase in the amount of candidates returning to New York, relocation packages have become more common to entice candidates to come back to the city.”
Professionals in quantitative research & trading can read the latest report from Selby Jennings which includes salary ranges in detail. For firms, they can also gain knowledge from this report, which features ‘10 Key Strategies on Securing Front Office Talent’.
Jonathan underlines just how critical post-offer care also is to overcome talent challenges and fill those roles from a tight pool of professionals:
“Post-offer care is just as important, if not more important than the steps leading up to an offer. With lengthy notice periods and visas required for so many, this leaves room for error and time for finance professionals to get cold feet."
“In this market especially, companies are doing anything they can in order to retain their employees. At Selby Jennings, we have seen employers offer professionals the world in order to keep top talent within their organization.”
One main method often used by companies is the counter offer. Other offers include title bumps, pay increases, internal moves to high-performing teams and even green card sponsorship in the US.
Learn how to deal with counter offers here.
Companies need to recognize that they need to pull out all the stops, as it is more expensive to backfill employees and in a competitive marketplace it is harder to attract top talent to their organization given that professionals will likely have multiple offers on hand.
It is very important that employers ensure they are following up with professionals on at least a bi-weekly basis to check in and reiterate their enthusiasm to having talent join the team. Keeping communication regular as a hiring manager means you are front of mind.
This risk is that employers failing to keep in contact with their prospective employee will eventually lose them to a counter offer or they may even continue interviewing elsewhere. Loyalty and commitment is a quality that most professionals are looking for in an employer, so Jonathan recommends that it is vital to express this value throughout your communication with them until your new hire starts:
“Part of our job as talent experts is to assist in this effort in keeping top talent engaged and excited, but the message really hits home more when it is coming directly from their future manager. At the very least, a phone call should be on this agenda, yet taking a candidate out for lunch or drinks would be the best option as it is a much more personal approach.”
Regardless of the challenges, Selby Jennings is here to support those hiring, and those looking for new opportunities, as a specialist talent partner in the Quant space.
Meet Selby Jennings
You can meet Jonathan Billow from Selby Jennings at QuantMinds, on the Champagne Discussion Roundtable: How to attract and retain top Quants talent in a highly competitive market.
