Is the Talent Battle Royale Just Getting Started?
The Wall Street Journal recently explored a significant shift in the balance of power between key industries that hire highly skilled data scientists and engineers. Hedge funds and the tech industry have a nearly inexhaustible need for talent, and the question is not just who’s winning, but rather how to compete with the reigning champions of recruiting.
Talent wars: underdogs become the Alpha(bet) dogs
In the race between the hedge funds and tech companies for data engineering and data scientists, tech was once the underdog for one very simple reason: money. With the explosive growth of the financial services industry, particularly in the United States, large financial firms started recruiting talent directly from elite universities with the promise of huge payoffs. But ironically some finance firms are finding that money alone is not enough to compete with a tech giant who has access to budgets that are an order of magnitude larger, and who can also offer a more compelling brand name and rewarding work experience. And while in some cases cash is still king, it turns out money alone won’t win you the war for talent.
Many tech firms align their company’s mission, vision and values with making the world a better place. There are many companies that attract engineers and data scientists by doing this (1) improving electric vehicles to reduce the environmental impact of fossil fuel (2) increasing efficiency and safety with autonomous vehicles (3) funding the next generation of entrepreneurs with venture capital, angel investments, and micro loans. Hedge funds, on the other hand, tend to be concerned with continually increasing profits.
The flip side of this, though, is the potential legacy of your work. A quantitative associate at a large financial-services firm in New York, Nina Kuklisova, noted that some of her friends in the tech industry work on “projects that turned out not to be used by anyone.” Couple this fact with the reality that a lot of firms don’t survive to give the lucrative payouts that convince data scientists and engineers to sign on, and there is a considerable amount of risk for those that choose tech over the financial sector.
Still, the name recognition of Google or Facebook attracts a lot of high caliber talent. To compete with this, established financial firms like Man Group decided to get creative as well. They donated millions to Oxford University to rename a quantitative research laboratory, knowing that this would help familiarize potential future employees with their brand.
Formidable competition for the rest of the tech industry
Engineers or data scientists who are already being heavily courted by multiple established tech firms and hedge funds will often neglect unknown startup offers or outreach in favor of a known brand name. This makes the competition for talent even more fierce for new startups who need talent to create their product but can’t offer Google’s money or the stability of a hedge fund. That’s one more reason that if you’re not Apple or Google then you do have to get creative in your approach to recruiting. Think about which attributes of your ideal candidates make them unique. Is it a shared mindset? A niche skill? A specific background or work experience? Above all, make sure the offer you provide truly competes, on multiple levels, with the other offers they are undoubtedly receiving.
Read the full article by Laurence Fletcher and Sarah E. Needleman in The Wall Street Journal.