Wall Street races to get tech talent as Silicon Valley hiring slows, but less competition and less flexibility could make sales tougher

Wall Street isn’t known for shying away from a tough fight — a reputation that could come in handy as financial giants prepare to best tech companies large and small in the ongoing war for tech talent.

For years, the tech industry has been eating Wall Street’s lunch when it comes to such talent. Whether they’re emerging startups, fintechs or established technology companies, big banks have seen their fair share of executives leave for firms that offer the promise of fast growth, high salaries and a less rigid work environment.

But this year has been very unkind to public and private tech companies, and Wall Street executives who previously lamented how difficult hiring has become are looking to take advantage as their competitors either lay off staff or freeze hiring.

Since January 1, the tech-focused Nasdaq Composite has fallen nearly 30%. And venture capital funding for startups fell 26% in the second quarter compared to the previous quarter, Crunchbase News reported this month. A number of fintechs, from Robinhood to Coinbase to Klarna, have announced job cuts or hiring freezes. Big Tech is not immune, with Facebook and Twitter announcing their own freezes this spring.

The stage is set for the recruitment tide to turn and banks have not been shy about their intentions to step into the breach.

Bringing all those workers to finance will be challenging, however, as banks struggle to match the once-high salaries — and flexible cultures — of tech companies. While some financial firms have expressed openness to the remote work environment that has become widespread during the pandemic, for example, others say the office is the best place to work.

Salary and benefits aside, it can be hard for finance companies to compete with the sheer romance of startup life.

Even after withdrawing an offer from Coinbase earlier this year, one former employee of a major bank told Insider that they weren’t deterred by their efforts to leave Wall Street for the startup world.

“I want to stay the course and become a big bust,” the candidate wrote to Insider. “After 22 years of bureaucracy and politics, I’m ready for something new and sexy!”

Banks are ready to pounce when tech hiring cools

During the pandemic, both buy-side and sell-side financial firms faced what many say was the most competitive market for tech talent in years as compensation skyrocketed across the industry.

“Over the past two years, we’ve seen the most active market for engineering talent in recent memory,” Two Sigma CTO Jeff Wecker told Insider.

It hasn’t been any easier in banking, Stuart Riley, global head of technology for Citi’s institutional client group, told Insider this June. “I would say the last 12 months have been the most competitive [hiring] market that I’ve seen in my career as a technologist,” Riley told Insider.

Todd Cassidy, CIO of Affiliate Experience and Head of Technology at Capital One, told Insider that financial firms have been hit by a “huge supply-demand imbalance” — or simply too few technologists with too many jobs.

That hasn’t stopped the banking giants from seeking large numbers of employees for their technology organizations, or from filling positions, albeit more slowly than some firms would like.

Capital One hired 3,000 technologists in 2021 and now has “hundreds” of open jobs, Cassidy said.

This year, meanwhile, Citi announced plans to hire 4,000 technologists in its institutional client group alone, while firms like Wells Fargo and TD Bank also unveiled plans to hire thousands of technologists.

The depth and breadth of technology required to run a bank is vastly different than it was a decade or even five years ago. The pandemic has accelerated the twin trends towards digitization and the cloud, which now require new kinds of technical skills and experience. Chief Information Officers, not long ago considered the “back-end IT guy who managed your desktop”, are emerging as key leaders as banks take inspiration and talent from the big tech giants.

“It’s recognized that the way customers do business with banks has changed permanently. And the branch and branch reduction is the tip of the iceberg,” Chris Marinac, director of research at Janney Montgomery Scott, told Insider. “Now the whole process is being reorganized. This is where technologists and thinkers come into play.”

Wall Street firms are now hoping that the turbulence in the tech and crypto worlds will turn the tide in their favor.

“There’s no question — companies committed to digital asset strategies need talent and certainly see this as an opportunity,” Todd Taylor, head of global financial services at search firm Heidrick & Struggles, told Insider. He referred to a leading multi-trillion dollar asset manager focused on digital assets calling the current chaos in the tech industry “an opportunity.”

“Banks could be a safe haven,” Taylor said.

Here’s why Wall Street may be in trouble

While banks are clear about their desire to hire thousands of people from the tech sector, offering careers that match the pay levels and lifestyle of the startup world can be a challenge.

As Insider has previously reported, the demand for technical workers in various industries has not slowed down this year. In addition, banks can still be valued in competition with Big Tech and startups.

When they were hiring, base pay for entry-level candidates at giant fintech startups like Robinhood and Coinbase reached $180,000 a year, Jayson Bevacqua, vice president of financial search giant Selby Jennings, told Insider. Such salaries were “leaps and bounds” above what “JPM or Goldman” could make, Bevacqua, who typically makes closer to $180,000 at the vice president level with 7 to 10 years of experience, he added.

Insider previously reported that as one example, JPMorgan engineers and developers can earn a wide range of annual base pay based on publicly available visa data. For example, vice presidents of engineering could expect to see about $140,000 to $250,000 a year in the bank, according to 2019 disclosures.

“Basically, someone at the VP level at Goldman would be getting paid as much as a junior engineer who went to a really good school and then got an offer from Robinhood, Coinbase or even Klarna,” Bevacqua said. And as Insider has detailed, even at the biggest quantitative hedge funds in the world, entry-level salaries are closer to bank levels than tech ones.

“We constantly benchmark against other financial services and technology employers and offer competitive compensation. This is partly how our hiring remains strong,” a JPMorgan spokesperson said.

Spokespeople for Goldman Sachs and Coinbase declined to comment, and a spokesperson for Robinhood did not respond to a request for comment.

Of course, many tech startups have run into trouble precisely because of the unsustainable salaries they offered candidates, and industry experts say tech compensation, especially stock-based compensation, will naturally have to decline. But such changes will be felt across industries, Capital One’s Cassidy said.

“People maybe either laying off or pulling back from hiring, we haven’t seen that play out in the market yet. It’s still really competitive,” Cassidy said. “Hopefully, some of these things will alleviate some of the competition in the market.”

Aside from compensation, it can be a less defined but equally important factor in the way banks look to recruit from tech companies. The cultures of the two industries can be vastly different, especially as the pandemic has highlighted the importance of many flexible working arrangements – which tech companies have embraced and some banks continue to scorn.

There is some evidence that demands for flexible working for technology workers are already putting pressure on banks. Bank of America and JPMorgan told some tech workers they could only come in two days a week. JPMorgan even told some workers at Chase’s payments division that they only had to come in six days a month, Insider reported.

Other cultural differences that can be a hindrance to financial firm recruiting include the idea that Wall Street moves slowly while Silicon Valley favors speed and growth.

Another worker who had an offer from Coinbase rescinded in June, albeit from a non-tech background, told Insider that “I would be open to going back to financial services, but they don’t always move that fast.”

That said, “it was disappointing to see how caught off guard they were,” the employee said of Coinbase, adding that they are now looking for “security.”

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