Financial services software engineer pay: a dismal 2023
2023 isn't the best year to be in banking, but it's a particularly bad one to be a software engineer. The eFinancialCareers 2023 compensation report suggests that average total compensation for people doing technology jobs in investment banks has fallen 19.8%, over $30k, to $164.3k.
The median average is even lower, just $136.7k, meaning there are a minority of technologists in banking with huge pay packages while the rest receive pennies. That doesn't necessarily mean senior engineers are that well paid either; technology ranks bottom for director total compensation among our reported divisions, below both risk and compliance.
Why is tech pay going down in financial services?
The reason for the drop isn't immediately clear, but one key factor is likely to be firms near sourcing their tech teams to lower paying locations in top countries. A notable example of this is Goldman Sachs, which has moved its global head of investment banking technology to Birmingham, England.
In the US, something similar is occurring in relation to Texas, with Dallas and Austin being key hiring locations for a number of banks. The state conveniently lacks the pay transparency laws enforced in prime locations like New York and San Francisco.
Financial services companies are also outsourcing on a massive scale, with India being the biggest recipient of jobs in the back and middle office. Technologists in India are paid far below most, with one Deutsche Bank VP in Pune being paid a TC of just $53.6k, less than a third of the average.
How do engineers feel about their pay?
Rather surprisingly, technology has the second-highest pay satisfaction rate behind quants. Even that Deutsche Bank VP told us he is "fairly paid."
A key reason for this is tech also ranks at the top for the fewest hours worked. Technologists clock in for about 42.6 hours per week on average and have an hourly compensation of $72.40.
A New York based Deutsche Bank director on $380k believed he works "reasonable hours" at 50 a week. This isn't true for everyone; one New York director on $284k works 60-hour weeks and stated he's underpaid due to "high workload."
Elsewhere, declining market conditions have given some cause to be thankful. A Credit Suisse director on $402k said the bank "had a terrible year, but my compensation was only down a little."
Not everyone is happy, however, with mid-level engineers seeing newer hires surpass them. One Goldman Sachs VP on $199.4k told us, "the associates on my team are paid more" while a HSBC VP said they "haven't received a raise in ten years."
Just because they work fewer hours doesn't necessarily make the work easier, either. A JPMorgan VP working 40 hours in New York told us his $200k compensation isn't enough as there is "too much work" and he has to deal with "grinding people."
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