“I’m a Quant enthusiast. The financial and investment banking industry is my main focus, from a recruitment perspective.” This is my leading statement when I’m connecting with the Quantitative professionals or ‘Quants’ as they are known on the European market. In other words, I’m interested in your world, the models you work with, the skills you are wanting to develop, the companies you desire to work for. I want to know your current role and most importantly your future one.
If you are in the financial and banking recruitment sector like myself, there is no doubt you haven’t heard about the huge desire for credit and quantitative risk analysts’, well at least you should, especially within the financial and investment sector. I began my recruitment career within a leading financial institution, exclusively within their risk department. Those annoyingly gifted kids in school who excelled at math, it was hard at the time to know where they would end up. Well here they are, at the core of every major financial and investment institution with their future on the market of today and tomorrow.
There is no arguing that the industry is more technically driven than ever, and the need to understand risk systems is not only trendy but crucial to profitability and asset security. Investment banks are also expanding more derivative securities and employing quants to price them within Trade, Quantitative Portfolio Management and Risk Management, to name the basics.
Let’s delve into the reasons the quant industry inspires such interest. Personally, this has been the most exciting time of my recruitment career by far. Recruiting for Quants is in fact beautiful. Here’s Why:
Education, Experience and Relevancy:
In recruitment, depending on the market sector, education may not be the only strong point to seek. Talent finders tend to focus far more on where candidates previously worked and for how many years. A degree is valuable, but experience is paramount.
However, in the word of quants this can be a different case. When viewing the CVs of Quants, education is in the spotlight. Mathematics, Statistical Modelling, Quantitative Models just the name few. Take a look at their thesis or projects as well, “Statistical-Physics Approach to Automated Trading” or core subjects “Advanced Risk Management and Derivatives”. This is exactly what giant financial investment firms look for. Quite refreshingly reverent isn’t it? This is what makes graduate recruitment so interesting for companies in the market looking for quants.
Thus, professional working experience can be almost irrelevant, often you see can companies hiring for o – 3 years’ experience. Therefore, making talent pooling and pipelining actually enjoyable because many candidates are relevant. Recruitment is a match-making service, but with Quants, a little bit extra is needed.
Talent is Everywhere and Nowhere:
“Looking for the diamond with the perfect cut?” This saying applies very well to the quant market in certain countries in Europe, where talent is established but perhaps may not the right ‘cut’.
For example, investment and financial giants like Morgan Stanley have a fair share of the monopoly of Quants in Hungary. Their well-known Quant Boot Camp, marketed as a fast track from talent to expert, targeting those who are confident with financial and mathematical concepts during studies are where they cut some of their diamonds. Hungary is full of talented quantitative developers, researchers and analysts at all different levels of experience, an excellent talent pool for quant professionals in Europe.
Another interesting form of recruitment is the World Quant Challenge known as IQC. A three-stage, team-based university competition that runs annually every year, inviting all students, alumnus and faculty members to join, with the winners being offered full-time positions and 15 internships worldwide.
The thrift for quants in Western Europe is rising at higher and higher levels and there are experienced quants all over Europe ready to relocate depending on salary, project and location.
The talent in Central Eastern Europe for example is both impressive and mobile but most importantly, in abundance. An experienced Quantitative Financial Analyst with 2 years of experience living in Sofia may be seeking a better fit in a more difficult analyst role in Amsterdam or Frankfurt. But there is something crucial missing from this somewhat simple, unaffectionate perspective. Why does seeking harder challenges incentivize them to relocate?
Models over Money:
An aspect of recruiting quants is indeed knowing how much cash flows for these qualified candidates. Quants are generally very well compensated due to the nature of the work, and working for a hedge fund will only increase this price. Major financial capitals usually host these high-level jobs such as London and New York with average salaries hitting around £60,000per year in London and $100,000 in New York, however other European cities are making their mark on the quant market as well, in Frankfurt or Paris, where the salary average is approx. €70,000. Warsaw and Budapest are becoming up and coming hubs for Quant jobs as well as they foster huge financial institutions but unfortunately losing out to higher compensation opportunities in Western Europe. But with all this cash to spend, believe it not, money is not necessarily their first love. Recruiters dealing with quants should understand cash can indeed be a deal closer, but it’s not a deal maker.
There is a common conception in recruitment about how far you need to know your subject matter. Some managers believe a recruiter’s job is ‘just to recruit’, and not to have a significantly in-depth knowledge of the subject. But this is the difference of a 360 Recruiter and high-level admin service provider.
Quantitative finance professionals are arguably some of the most intelligent individuals on the market. They could understand the most difficult derivative structure but perhaps not as savvy on their career development as they could be. Many of them are looking for their perfect match but yet to find it. However, there is a gap because quants, like most technically-focused job seekers are not necessarily convinced by most recruiters, if at all. They are repeatedly hit with sales pitches and offers that are meaningless to them by recruiters who are doing poor outreach just to get their KPI’s in check.
Quants want to see effort and forethought. Recruiters must introduce themselves as someone who is genuinely intrigued in their candidate’s world, their markets, their models, their projects, their career aspirations, possible countries of relocation and mostly importantly their passion. This is a two-way street, if a talent scout knows about a quant’s salary, relocation or projects they want to work on, they can be connected to projects all over Europe. And by obtaining this information, it helps the team know the hot stops in Europe for Quants and where they want to work. From recent trends, the Netherlands and Germany are within interest. Los gehts!
To Summarize:
The best market knowledge a recruiter will ever get comes from talking to candidates, hands down. Here exists the true insight and the best subject matter to be found. From years spent in recruitment, I can say without a doubt some of the most passionate individuals about their work are quants. The detail they display in conversations is incredible, you just have to ask! It isn’t be a surprise to hear from a candidate their desire to work more on derivatives with Statistical learning theory and discuss the differences between Risk-neutral Pricing (computing prices of derivative securities) and Exotic option models (non-vanilla options).
Additionally, some quants will even be open to a career change and or decrease in seniority in pursuit of challenges to overcome. Some AVPs at major financial institutions can express that they are not stimulated because they are missing utilization of programming skills for example, and they might be open to take a lower-level role just to utilize a skill or work with a specific model of interest. The passion is evident!
This aspect is very important, recruiters should listen up to the candidates about what is driving them. If it is just assumed everyone is driven by cash and status, then there is the danger of missing out on a beautiful market that will change minds.
