Ask HN: junior hedge fund programmer - what is fair compensation?
16 comments
You have basically no practical experience, and you're worried about getting "fair compensation" for this job? You should be taking this job to absorb as much practical experience and knowledge you can get -- thats the opportunity for you; not some mediocre paycheck.
I disagree.
Never shortchange yourself - ever. If you have a low current salary, state that you need a significant boost. If the potential employer knows how low yours is, you'll see just what they consider a significant boost then.
That increase will tell you a lot. Are they thinking you're not worth much because of the low salary and give you a small boost? Then they probably won't pay you well no matter what. If they do give you a bit better than you expected of a boost, that means they recognize your talent or indeed want you for the job - a much better outcome.
Consider what your minimum increase is and then when asked, put it on the table. Don't be greedy but be firm; financial firms look for weak negotiators or people that shortchange themselves. You're not worth as much to them if you won't stand up for your needs.
Never shortchange yourself - ever. If you have a low current salary, state that you need a significant boost. If the potential employer knows how low yours is, you'll see just what they consider a significant boost then.
That increase will tell you a lot. Are they thinking you're not worth much because of the low salary and give you a small boost? Then they probably won't pay you well no matter what. If they do give you a bit better than you expected of a boost, that means they recognize your talent or indeed want you for the job - a much better outcome.
Consider what your minimum increase is and then when asked, put it on the table. Don't be greedy but be firm; financial firms look for weak negotiators or people that shortchange themselves. You're not worth as much to them if you won't stand up for your needs.
Never shortchange yourself - ever.
Right. Shortchange the company instead.
OP, considering your virtually nonexistent professional experience, I'd take the job regardless of the salary and focus on learning as much as I can. Ignore the money for a couple years.
Then bump up to a higher payscale, either at the same company or jumping ship to a different one.
Right. Shortchange the company instead.
OP, considering your virtually nonexistent professional experience, I'd take the job regardless of the salary and focus on learning as much as I can. Ignore the money for a couple years.
Then bump up to a higher payscale, either at the same company or jumping ship to a different one.
> Right. Shortchange the company instead.
I don't mean shortchange the company. I mean don't shortchange yourself.
@OP, If you accept less than you are worth people will continue to offer you exactly that. I don't mean be unreasonable; I mean don't accept the age-old argument "oh, but you'll get experience".
Even when you are starting out, stand up for what you are worth. You won't regret it.
I don't mean shortchange the company. I mean don't shortchange yourself.
@OP, If you accept less than you are worth people will continue to offer you exactly that. I don't mean be unreasonable; I mean don't accept the age-old argument "oh, but you'll get experience".
Even when you are starting out, stand up for what you are worth. You won't regret it.
Thanks. I see it both ways, and agree with both you and rumpelstiltskin.
My current job pays abysmally low, but it offered great experience when I didn't have any. And I'm getting more interesting opportunities now because of it.
So now I can afford to be a little less desperate.
My current job pays abysmally low, but it offered great experience when I didn't have any. And I'm getting more interesting opportunities now because of it.
So now I can afford to be a little less desperate.
Good! Glad you can move onward and upward. I just hate to see people keep limiting themselves :)
I'll take the job with the best experience/learning curve, coworkers, and future growth. I'm not worried about maximizing salary - I'm just trying to establish floor and ceilings for what to expect.
I think the fact its in finance is what skews things. I'm very frugal, so I don't want to feel as if I made out like a bandit when in fact I really got something below market rate.
Doesn't mean I won't take something below market rate, but I'd like to have that information when I evaluate an offer.
I think the fact its in finance is what skews things. I'm very frugal, so I don't want to feel as if I made out like a bandit when in fact I really got something below market rate.
Doesn't mean I won't take something below market rate, but I'd like to have that information when I evaluate an offer.
The promise of money may be fuzzying your logic.
Finance is a domain with a lot of money. So, if you have domain knowledge and can help the firm make a lot of money, you can make a lot of money too. But if you don't, don't expect a dime more than at another company. In fact, they may pay you less, in return for gaining the domain knowledge, which you can later turn into a lot of money.
Finance is a domain with a lot of money. So, if you have domain knowledge and can help the firm make a lot of money, you can make a lot of money too. But if you don't, don't expect a dime more than at another company. In fact, they may pay you less, in return for gaining the domain knowledge, which you can later turn into a lot of money.
I'd say around $80k-100k plus bonus, but tbh, without a CS (or physics/maths) degree, you're pretty lucky to even get an offer as most hedge funds won't even consider you for a programming position without one.
Salary for a junior developer can be anywhere between $80K-120K with a bonus range of 10%-50%. This is based on nothing but 1-2 years of experience and a CS degree. Most companies will not deal directly with you if you came with a recruiter. The recruiter makes about 20-30% commission on your BASE salary so they are motivated to get you the most money and close the deal (which means you need to accept it).
Seems way high for a Junior Developer. Perhaps it's just very high in the US, around here it's approx $18k/yr for a very junior programmer. This leads me to ask, what's a typical salary for a hedge fund enior developer in the US?
Not sure if this is the case here, but in this business it's common that compensation is structured as: base salary + guaranteed year-end bonus + performance-based year-end bonus. The offer would include only the first two items. The base salary should be similar to an average salary as a software engineer that you could get elsewhere. The guaranteed part of the bonus can vary anywhere from 10% to 100% of your salary; it really depends on the company and your position (in your case, you should expect a lower number). The non-guaranteed part of the bonus is where the real money can be found, though, and that cannot be negotiated. It will be based on your personal performance and on the performance of the company each year. So bargain carefully for the first two components of the compensation, but remember that the third component is where the real upside is. In other words, especially with your almost non-existent experience (no disrespect), you should take whatever you can get from them. Assuming that you want to work in that business, of course. I hope this helps.
From what I understand about the hedge fund market (a friend of mine is the CTO of a hedge fund who worked his way up as a programmer), especially for NYC, is to expect a low salary, and make it up with the end of year bonus.
No idea how much things have changed since he told me this (a couple years ago), but that's what I got.
No idea how much things have changed since he told me this (a couple years ago), but that's what I got.
Thanks for the feedback. I won't be involved in the investment decisions, but will be developing tools for the traders. There is a bonus, but I'm not sure what the typical size is for the developers. I'm wondering if the bonus is on par with what developers at Google/Facebook, etc take home.
But you're right, it is something I will consider when evaluating the package.
But you're right, it is something I will consider when evaluating the package.
From what I understand (again, heresay), in the heavy-investment locations like NYC, it was something like over 70% of your income was in the form of a bonus, perhaps more, ie, you might take a $30k salary, but if performance of the company is good, you may end up with a $100k bonus.
Some developers who were previously making ~$90-$110,000 would take positions to $70 - $90,000 for a large financial conglomerate with "bonus" potential as a carrot. Those bonuses trended towards $20,000 (so, a loss, and working 70 hours a week (on the Operations side of the Dev time, see below)).
For a Jr at a hedge fund, you should be aiming for $70,000 minimum, then, provide enough value for a $40,000 bonus (hedge fund'esque).
You don't go Around your third-party recruiter, because he is representing you. Could cause problems (am I wrong in this? I've negotiated (upwards typically) salaries at financial / ecomm firms, the companies Expect part of the fee is not dealing with the headache of "back and forth" between a candidate). On the other hand, I've had candidates I don't represent ask advice on negotiations (when they have gone on their own to a firm).
Anyway, most of your comp will be in the form of bonus, but, you shouldn't be taking a horrendous (what, $40, $50k) base salary just because you were previously making such. The fact that you are in offer stage means they are Interested.
It also depends on the "side" of the business you are on (support (or Operations) vs revenue). If you are building tools for the traders, you are higher value.
Cheers!
For a Jr at a hedge fund, you should be aiming for $70,000 minimum, then, provide enough value for a $40,000 bonus (hedge fund'esque).
You don't go Around your third-party recruiter, because he is representing you. Could cause problems (am I wrong in this? I've negotiated (upwards typically) salaries at financial / ecomm firms, the companies Expect part of the fee is not dealing with the headache of "back and forth" between a candidate). On the other hand, I've had candidates I don't represent ask advice on negotiations (when they have gone on their own to a firm).
Anyway, most of your comp will be in the form of bonus, but, you shouldn't be taking a horrendous (what, $40, $50k) base salary just because you were previously making such. The fact that you are in offer stage means they are Interested.
It also depends on the "side" of the business you are on (support (or Operations) vs revenue). If you are building tools for the traders, you are higher value.
Cheers!
Some people (particularly senior folk) on Wall St do in fact get significant bonuses like you describe. And many companies like to attract employees by talking about bonuses. But, unless a bonus is specifically stipulated in your contract, I wouldn't count on it. Your bosses can always come up with some excuse for not giving you the bonus -- especially if you're a junior employee. As such, you are quite disposable and replaceable.
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I spent about a year working at a non-quant hedge fund out of NYC, and I saw people in similar-sounding situations making $100-125k base, plus another 20-50% in year-end comp ("bonuses"). Recruitment bonuses (or "relocation incentives," what have you) vary widely, too, but seemed to be usually in the lowish-five-figures range.
Of course, I don't know anything about your particular situation; maybe the firm you're talking to has specific interest in you that will take them higher!
Also, like some others have mentioned, your year-end compensation ("bonus") is a big chunk of your take-home---but hard to anticipate ahead of time. Even within a team there can be huge variance (depending on your individual awesome) so the "mean" or whatever figure they're willing to give you doesn't really help.
Of course, I don't know anything about your particular situation; maybe the firm you're talking to has specific interest in you that will take them higher!
Also, like some others have mentioned, your year-end compensation ("bonus") is a big chunk of your take-home---but hard to anticipate ahead of time. Even within a team there can be huge variance (depending on your individual awesome) so the "mean" or whatever figure they're willing to give you doesn't really help.
Fair compensation is established by your current market value. Try to get another bidder,i.e. a second job offer, tell the first guy what the other guy is willing to pay.
Bluff if you must but don't push it, in your case you need them more than they need you.
Sounds like you have a bad recruiter. (2) is a situation that should never happen, as they get paid by a percentage of your base salary.
That said, it also sounds like you're in a situation where it's incredibly difficult to negotiate. I'd say take whatever they give you and kick ass at your job. You'll build up your resume, and in a few months if you believe your underpaid, you'll have something to negotiate with. Moreover, with something substantial on your resume you won't have any trouble moving elsewhere.
If you're worried about your recruiter, I'd recommend calling TTS Staffing and asking for Morgan, he's the best that I've dealt with in New York.
That said, it also sounds like you're in a situation where it's incredibly difficult to negotiate. I'd say take whatever they give you and kick ass at your job. You'll build up your resume, and in a few months if you believe your underpaid, you'll have something to negotiate with. Moreover, with something substantial on your resume you won't have any trouble moving elsewhere.
If you're worried about your recruiter, I'd recommend calling TTS Staffing and asking for Morgan, he's the best that I've dealt with in New York.
> Sounds like you have a bad recruiter. (2) is a situation that should never happen, as they get paid by a percentage of your base salary.
You sure? Situations like that are ripe for recruiters lowballing the hires. Why? Because the recruiter can get many commissions from a steady client, but only gets one commission from the employee. As long as they can make it up on volume, there's a real incentive to be a slack negotiator.
You sure? Situations like that are ripe for recruiters lowballing the hires. Why? Because the recruiter can get many commissions from a steady client, but only gets one commission from the employee. As long as they can make it up on volume, there's a real incentive to be a slack negotiator.
Even if the recruiter never plans to do business with the employer again, his interest aren't fully aligned with the job seeker. The recruiter has a strong incentive to the the seeker hired -- regardless of salary -- because if he gets ends up taking a different position, the recruiter may get nothing.
Yes, 90 day guarantee's and all that. But, its true, the incentive is to CLOSE the deal vs closing at the most optimal for the candidate (a % of the fee vs 0% of the fee).
What level is your degree in Math or Physics?
What specialized experience do you have in programming quantitative finance applications?
What specialized experienc do you have in high performance computing applications?
Do you have business side experience in trading - what markets?
...So, then you know nothing of the business, nothing usefull to the developers and nothing usefull to the quant team...
I'd back of the "negotion" until you have something of value to negotiate over.
And it's probably not a good idea to piss off the recruiters at this point in your career - it is a very small an incestious world
I mentioned in the OP its a traditional fund - not a quant shop. I have some professional experience in shipping financial trading applications.
I'm not trying to score a sweet deal here - just trying to understand the market value of someone in my shoes.
My lack of experience (defined in this thread as time I've been working) does not mean there isn't a situation that can't be considered lowball. I'm not trying to maximize my income - just want to have idea and data on the pay floor and ceilings.
I'm not trying to score a sweet deal here - just trying to understand the market value of someone in my shoes.
My lack of experience (defined in this thread as time I've been working) does not mean there isn't a situation that can't be considered lowball. I'm not trying to maximize my income - just want to have idea and data on the pay floor and ceilings.
Advice that I have received that has been helpful when negotiating compensation is:
(1) A good way to dodge being the first one to give a salary number is to say that you will consider the total compensation package offered, of which the salary is just one portion.
(2) If you do get an offer and want to negotiate, but are scared that you will put them off - make sure they know from your response that you are very interested in the position and the offer, but based on your understanding of the job responsibilities and your skills were expecting something in the range of x.
(1) A good way to dodge being the first one to give a salary number is to say that you will consider the total compensation package offered, of which the salary is just one portion.
(2) If you do get an offer and want to negotiate, but are scared that you will put them off - make sure they know from your response that you are very interested in the position and the offer, but based on your understanding of the job responsibilities and your skills were expecting something in the range of x.
Dude think of this as laundry for your resume. Once you come out of there, you'll be able to land jobs at much higher rates. Plus, the bonus thing does sound good.
Don't talk to the employer about rates during this process. But it's OK to dangle carrots, such as your special ability to solve x type of problem if you have anything like that, something that will make it more likely for the employer to tell the recruiter "I want this one hired."
Also start looking for other offers so that if you do end up wanting to say no to this one, that will be easier to do.
Don't talk to the employer about rates during this process. But it's OK to dangle carrots, such as your special ability to solve x type of problem if you have anything like that, something that will make it more likely for the employer to tell the recruiter "I want this one hired."
Also start looking for other offers so that if you do end up wanting to say no to this one, that will be easier to do.
In this part of the world (Hungary), if you say "I want to make between $X and $Y", it translates to "I'll work for $X". Assuming $X is sensible, they will offer you $X minus 20-30% (sometimes even 50%). You can try to negotiate, though BigCos won't negotiate with a junior guy. Also, negotation is a tough art, and the person at the other end is much better than you, and is holding all the cards. You want the job real bad, but he probably doesn't want you real bad.
This doesn't apply if you're special, but if you're a junior, you're not.
This doesn't apply if you're special, but if you're a junior, you're not.
(3) is only going to happen if you insist. People generally make offers serially, from the candidate they're most interested in, to the one they're least interested in (but still interested in hiring obviously). If you ask for too much, they'll let you know.
Take the job. After a year, once you have the experience, you can move on. Or they will offer you more money, because you'll have proven yourself. Either way, you'll be better off, and you'll know what market rate looks like.
Question for you, if you don't mind. How did you get to this point, where you have a job offer? I am also self-taught with 0 professional experience in NYC and would like to be in your shoes.
Sure, do you have a throwaway email? Put it in your profile, and I'll shoot you an email.
Sorry to pile on, but can you do the same for me? I'm considering a similar path to the one you're investigating here.
could you please share the details with me as well. Thanks
done. thx.
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It's a multi-billion dollar hedge fund in NYC w/ very low headcount. I'd say the project workload is higher than average because of a small dev team, and its a fair balance of front/middle/back office work. Its a discretionary (non-quant) fund.
1) What range should I expect to be fair? (salary + bonus)
2) Is it unethical to negotiate directly with the employer (go around the recruiter)? I imagine the recruiter just wants to close a deal, and not really fight for the best offer.
3) If I shoot too high, can the offer get pulled before I'm told its out of their range? If I say "I'm expecting X" can they say "We're sorry, that's too much, we decided to go with applicant B" ?
4) I'm reading about negotiation (especially here on HN). Everything from "don't say the first number" to "say the first number (price anchoring)". I actually have a figure in my mind that I believe I'd be happy with. Its slightly higher than the top of the range I was quoted by the recruiter. Would it be better to just say "I expect X for this position" and be hardnose about it, or to say "I was expecting something between X and X+20%" and negotiate?