Comments on: Fewer Finance Jobs Isn’t All Bad

By: Rockon

Rockon — Wed, 11 Feb 2009 08:19:12 +0000

I agree with you that economic remuneration is a large lure that draws talent into a career in finance though I sometimes wonder if that is the only one. Take Derman for example. If his job at Bell Labs was anywhere close to intellectually satisfying, he possibly wouldn't have crossed over to the other side of the Hudson. And engineers moving over to Wall Street have actually embellished the world of quantitative modeling (Apparently the problem of yield curve smoothing saw the cubic spline solution when a group of Civil Engineers noticed that the problem was no different from that of stitching together cantilever bridges.

I also hope that the bright mechanical engineering graduate will now be meaningfully employed in building fuel efficient cars rather that writing second grade C-on-UNIX code at Indian IT companies to maintain moribund mainframes of Wall Street Banks

By: Dheeraj

Dheeraj — Wed, 26 Nov 2008 11:32:55 +0000

But the science vs engineering problem will still remain. Our brightest minds should go into pure science, not into software engineering.

By: Satya

Satya — Wed, 22 Oct 2008 15:12:17 +0000

I really liked the introspection part. But it was good when it lasted. Here is one more, which is somewhat scary. But are they not mostly the people who have their eyes and ears really open?

http://www.rgemonitor.com/blog/roubini/253933/revisiting_my_february_paper_the_risk_of_a_systemic_financial_meltdown_the_12_steps_to_financial_disasterand_some_new_policy_recommendations_to_avoid_the_meltdown

On Indian IT services:

I am in IT and I think the cyclone is coming. And it remains calm before that. So far it has been blind driving in last 1 month for Indian IT. Here is my take:

– BPO market will see the boom. It has already started with TCS/Citi deal and they will do well. Above all, it is not their (rich folks) core area so dumping it is not a problem for them. It will save money for them.

– Telecom market will not be badly hit. It will go on. There will be investments and people will go for it. And in Asian market, telephone is the cheapest one and it has tremendous potential go. Companies who are focussed on Asian market will have the bounty.

– BFI market – We all know that the so called “Tier-1″ companies account for 30% to 40% of their revenue. And it has already been hit. And in the coming months, it will be badly hit also. I find it hard to believe the brave talks of industry titans, get ready – as Basab has put it – keep your options open or get very very good at it. The later you can hardly have in IT services how much harder you try. The kind of work do not make you a Nobel prize winner!

– IT prduct business – it will grow. It is cost unbeatable so far. And product business if pursued dilligently in India can do really wonders for Indian IT. This week one tier-1 IT services reported 40% growth yoy in product business though <20% in IT services. But so far, I have not seen IT services companies really going into product business. It is very very hard, requires dedicated and highly motivated staff and above all inherently risky.

– Govt. centric business – it is driven by common man like you and me. This segment is bound to grow. Asian countries can do a lot in terms of IT spending govt. sector. In India, railways have been a good example (though sometimes the site sucks – developed another tier-1 company!) and heavy corruption still drives day to day life. However, govt is there in almost all the countries and if IT can be pitched in properly, a good source of long term capital is here.

– Recruitment – will be hit. It has already been hit and projections are slowly coming down. Again the “Tier-1″ companies used to recruit just anybody, so it is time to tighten the belt. It has already started – only when the deal is through bring on people on board. Otherwise, it is no secret that the utilization rate in IT services is 60%-70% at most. However, for most youngsters, IT will still be the job route to pursue!

By: Anuradha

Anuradha — Wed, 22 Oct 2008 08:38:09 +0000

I agree that IT industry in India is creating the same resource crunch for other industries and specially the research oriented ones. And I also agree that Indian IT industry may not be as impacted by the global slowdown and even if they get impacted, the impact would be temporary.

But having said that research and other such areas that demand an intellectual inclination need to be made little more lucrative, or be made insulated from the waves like financial sector in US or IT in India. Not sure how to do that, but its a good food for thought.

By: Basab

Basab — Sun, 19 Oct 2008 21:35:26 +0000

Subrata, Bharat,

The situation in India over the last decade where all engineers wanted to join the IT industry is not a bad parallel. But I think (perhaps hope would be a better word) the impact on the Indian IT services industry will be temporary. They have other industries where they can grow and make up.

By: Bharat Rao

Bharat Rao — Sun, 19 Oct 2008 18:32:44 +0000

Basab – I guess if we extend this logically, a similar reallocation of resources might be happening in India – where IT stands accused of luring away the cream of the science and engineering talent. I have never fully agreed with those doing the accusing (including a scientist of some eminence). While only some of the work that IT companies do is true “innovation”, not too many other engineering firms or academic institutions are fountains of innovations either.

But as financial services as a whole slows down, IT behemoths (who rely on this sector for upto 35-40% of their revenues) will have to slow hiring as well – making more talent available to other sectors. The IT hiring boom – like the financial services boom – wasn’t a bad thing. And, the slowdown isn’t a bad thing either if non-IT firms spot the opportunity and scoop up good talent. It’s a different thing, of course, if it turns out that there aren’t that many human capital intensive jobs to absorb the surplus.

By: Matthew

Matthew — Sun, 19 Oct 2008 15:09:55 +0000

I still see thousands of finance related jobs posted on employment sites.

http://www.linkedin.com (networking)
http://www.indeed.com (aggregated listings)
http://www.realmatch.com (matches you to jobs)

good luck to those searching for jobs.

By: Subrata Majumdar

Subrata Majumdar — Sun, 19 Oct 2008 08:16:03 +0000

Basab – I agree with you that economic remuneration is a large lure that draws talent into a career in finance though I sometimes wonder if that is the only one. Take Derman for example. If his job at Bell Labs was anywhere close to intellectually satisfying, he possibly wouldn’t have crossed over to the other side of the Hudson. And engineers moving over to Wall Street have actually embellished the world of quantitative modeling (Apparently the problem of yield curve smoothing saw the cubic spline solution when a group of Civil Engineers noticed that the problem was no different from that of stitching together cantilever bridges!).
The reduction of finance jobs (and a cooling of compensation) will rightly benefit the real sector. For a country like India (where I come from) this is important as it must create competitive advantages in the real economy to move away from depending on invisibles to balance capital flows.
I also hope that the bright mechanical engineering graduate will now be meaningfully employed in building fuel efficient cars rather that writing second grade C-on-UNIX code at Indian IT companies to maintain moribund mainframes of Wall Street Banks.

Subrata