For many years, Wall Street firms were able to offer larger salaries to their employees compared with workers in other industries, and this approach let them attract the best and the brightest. Today, however, the industry is in a different place financially, and sometimes firms aren't able to attract talent with money alone.
To recruit and retain top management and technology staff in the aftermath of the financial crisis, employee engagement and talent development are key, especially to the workers who survived the crisis and to the new millennials who are just joining the workforce. As such, firms that want to keep an edge on their competition are actively carving out specific recruitment and development programs aimed at hiring and growing the creme de la creme of IT talent.
Both fledgling and well-established firms are ramping up their staffing strategies. State Street CIO Chris Perretta, for example, says he tries to spend a major part of his time on talent development. "If I'm not spending 15% to 20% of my time doing it, I'm neglecting it," he says. His focus on talent development includes looking at which people might be ready for further development, what gaps he needs to fill in the IT organization and whether there are good opportunities for in-house talent.
Fidelity has an intern program in which the company brings in college students for the summer and has them work on real projects, acting as a pipeline for its college graduate program, called Leap. In that development program, new graduates spend up to six months learning about the financial services industry; Fidelity's business lines; and how the firm designs, develops and operates its IT environment. New managers are invited to attend a manager boot-camp training, and as associates move into more senior roles, they can participate in firm-wide leadership development programs. More experienced employees participate in extensive online and classroom learning opportunities.
Fidelity also holds annual internal events designed to connect associates to one another and to the work that they're doing, enterprise CTO Steve Neff says. Fidelity's Global Architecture Forum brings IT architects across the firm together, and an annual applied innovation conference -- InfoFest -- highlights how Fidelity uses technology in new ways to help it be more nimble, Neff says. "We structure events like InfoFest as both physical and virtual events, using videoconferencing and our internal TV system, coupled with social media, to ensure that we reach and engage all our of IT associates across the globe," he says.
The Talent Management Equation
BNY Mellon has also embarked on a formal talent development process, says Anthony Perkins, CIO for wealth management. "We identify top talent, development plans, key skill sets needed and identify those individuals we can train in those skill sets. It's a formalized process and something we believe is a really big focus," he notes. Technology in today's world is more about assembly than building. With the commercialization of IT, firms need the ability to develop and support mobile applications as well as technology for risk and regulatory oversight. "When you look at skill sets today and the ones you'll need tomorrow, talent management is the most critical thing you can focus on."
At TradeMonster, an online brokerage with a 60-person IT staff, including some contractors (a drop in the sea compared with larger Wall Street firms with thousands of IT employees), CTO Sanjib Sahoo has devised a well-defined, multipronged plan for hiring, developing and keeping talent. His plan, which has the 7-year-old online brokerage competing with the industry's IT Goliaths, has had an attrition rate of just of 3% or less. "Hardly anyone has left. The team has grown three or four times or more. Our uptime on our platform is 99.99999%," Sahoo notes.
As part of building an innovation-driven organization, Sahoo has focused on a flat organizational structure that keeps his staff motivated and encourages everyone to speak up at meetings without feeling intimidated. It also means he has never hired a single manager for his team. "I grew them all from the ground up," he says. TradeMonster has 100 employees total.
As part of the hiring process, TradeMonster starts by inviting candidates to a group interview where four or five interviewers fire tough questions at them while also assessing to what extent they're team workers and have other key skills. "We want to test how they think out of the box, how they handle stress with so many people asking questions, and whether they can put across their point of view and get consensus with five people asking questions," Sahoo says.
If an IT programmer applies for a position, a recruiter might ask during the interview how she would go about building a specific system. Along the way, five people will drill her with questions every step of the way. Sahoo says TradeMonster's tough recruitment system stems from the fact that the company needs employees who are natural leaders and don't have to be managed. "Attitude and creativity are very important. It's not just about IT skills. We want to know if a candidate gets offended when challenged about their ideas. Are they open to other ideas or are they arrogant? How will they work with our team?"
BNY Mellon's Perkins confirms that it's essential to focus on in-house talent development rather than immediately looking to fill a gap in skills with external hiring. If you only hire from the outside, you run the risk of losing valuable "institutional knowledge," he points out, as existing employees may decide to leave for other opportunities. Still, he recognizes that you can't train 100% of employees in new skills since there will be always be a learning curve that isn't fully compatible with the speed needed to roll out new products. The solution is often to blend in-house talent with external hires, he says. "Many of our consumers are starting to use Android devices. We need to train our staff on these devices but also hire people who have been working on those platforms for some time and meld the two together."
Once he has new recruits on board, TradeMonster's Sahoo immediately helps them grow. He starts with a very inclusive management style, such as having an open-door policy and using strong coaching to build an effective team. To make sure that everyone feels part of a team and knows exactly where the company stands, Sahoo holds a town hall every couple of weeks, with updates on TradeMonster's road map, the quarter's financial results and the challenges the brokerage is facing.
"I don't believe in keeping IT in a silo," he says. "They need to be part of the business. So even if you have a bad quarter, they understand that the budget is tight now, so they'll try to work around it. If there's a server they want to buy or money they want to spend on software, they think, 'Hey, we're having a rough quarter. Let's think how we can work with this.'"
To further ensure that everyone on the technology team feels a strong connection to the business, every time programmers build a system, they receive an update on ROI. "If they build, for example, a portfolio margin system, after the project goes into production, we say, 'It has contributed X amount of dollars to our revenue, so we appreciate your hard work.' People feel appreciated. They feel they're contributing to the bottom line, they're not just building a product and moving on," Sahoo says.