Banks, Hedge Funds and Investment Firms Accelerate Tech Hires in Texas

  • Wall Street companies, which can’t seem to hire tech talent fast enough, are looking to Texas.
  • They say the state offers an untapped pool of talent from big tech companies and renowned tech schools.
  • Insider spoke with Wall Street executives at Goldman Sachs, Citi and more to take a look at their playbooks.

When Jeremy Hanson moved to Dallas – about 1,500 miles from the Goldman Sachs brain trust in New York – in 2017, he was one of only three engineers in the bank’s consumer business working in Texas. Today, there are hundreds, Hanson told Insider.

But it’s not just the consumer team that’s growing rapidly in the state. Goldman’s presence in the Dallas area – which mirrors the New York headquarters in departmental representation – has just under 4,000 employees in total, nearly double the number of bank employees there are. less than a year, he said. And of those Dallas employees, nearly one in four work in the technology organization.

“When we picked Dallas, it was really around finding talent,” Hanson said, citing the state’s abundance of tech graduates.

After all, Texas engineers have been behind every recent product launch in the bank’s consumer division, starting with personal loans in 2016.

In fact, Wall Street as a whole is investing in Texas as it seeks to bolster its tech workforce, factoring in both tech talent fresh out of college and lower costs than hubs. long-standing technologies such as San Francisco and New York. .

JPMorgan, Citi and hedge fund Two Sigma have also built fintech foundations in Dallas, Irving and Houston, respectively. Wells Fargo, which wants to recruit 2,000 technologists this year, is also targeting the Dallas area. Meanwhile, $7.2 trillion asset manager Vanguard is set to open its new Plano office this quarter, which houses front and back office employees supporting financial advice.

So while the saying goes, everything is bigger in Texas — the tech talent pool included — no state is immune to the uphill battle for tech hires. The Lone Star State is fast becoming a key battleground in the relentless war for tech talent, and the competition is set to get even tighter as more financial firms enter the fray and hijack the tech workers from Amazon, Oracle, Dell and other tech giants. .

Wall Street favors quantity over quality when it comes to tech talent

Dallas is home to a growing cohort of people who fit the “peak working age,” Steve Hagerman, chief technology officer at Wells Fargo, told Insider, referring to people between the ages of 23 and 38, a slice of age which increased by about 15 years. % from 2014 to 2019. Dallas is also one of the most promising markets for obtaining a technology degree, he said, with a 71% increase over the previous five years, according to the 2019 data from the Bureau of Labor Statistics.

“If I look at the Bay Area or the New York area, there are skill sets that are just more advanced there,” Hagerman told Insider. “But when I look at a place like Dallas, I have 6,672 tech grads a year, and then a strong tech market of almost 200,000 people.”

Plus, it’s cheaper from a business perspective. The algorithm used by Wells Fargo to estimate the annual cost of having 500 workers shows that Dallas costs $46 million, compared to $68 million in San Francisco and $59 million in New York.

Numbers are a big factor for Wells Fargo, which is looking to hire software developers, database and systems technology engineers, and engineering managers. The company’s Addison office is home to 3,000 corporate employees (excluding branches), including about 1,000 in the technology organization, Hagerman said. As for the number of new hires in the Dallas area, this office will experience “unconstrained growth,” he added.

Meanwhile, one of the biggest investment managers, Vanguard, is set to move into its new office complex about 10 miles north after expenses approximately $7 million in renovations. The Plano campus, which is expected to open in the second quarter of this year, will accommodate financial advisors and technical back-office roles, with a focus on UX designers, cloud-native architecture engineers, engineers in infrastructure and security teams, Joel Dickson, its global head of consulting methodology and a senior official in the new office, told Insider.

Vanguard has been in full hiring for the office since November, Dickson said, adding that over the next few years the company expects it to house hundreds, if not thousands, of employees.

“The availability of talent will drive growth in this region,” Dickson said.

Financial firms see Texas cities like Houston as key growth areas

Citi, which has long had fintech operations scattered across Texas, is home to the bank’s largest tech workforce about 20 minutes away in Irving. It’s a hub for the bank’s mobile and online apps, Shadman Zafar, global chief technology officer for Citi’s personal banking and wealth management businesses, told Insider.

The Irving campus has more than 10,000 employees, the technology workforce – made up of software developers, data and machine learning engineers, infrastructure teams, product managers and two global command centers – representing the vast majority of workers, Zafar said. And that share is expected to grow, with more than half of the bank’s open workforce for Irving in technology, he added.

Two Sigma, the quantitative fund founded by billionaires John Overdeck and David Siegel, is also expanding its presence in Houston, a key location for the New York fund since the office was established in 2005.

Quantitative funds rely on computer and mathematical modeling to make their bets in the market, and Two Sigma is known for pushing the boundaries of computing and the use of data, even among its quantitative counterparts.

The $58 billion fund has 80 employees in its software engineering center, where its technologists tackle everything from distributed computing platforms to big data and financial optimization, Jim Ward told Insider, managing director and general manager of Two Sigma’s Houston office. . Almost every engineering vertical is represented in Houston, he added.

Two Sigma is expected to add more than 200 engineers to the company this year, and Houston will be a “key area of ​​growth,” Ward said.

Wall Street’s ambitions in Texas are diverting talent from old tech companies — and even hurting local college programs

While financial firms only started expanding their tech operations in Texas in recent years, the state was already home to several tech companies. Texas Instruments and Electronic Data Systems, the information technology company founded by Ross Perot, for example, were both founded in Dallas. The region also has a thriving biotechnology and life sciences industry.

Tech companies like AT&T, Dell and Oracle also have strong ties to the state, while big tech companies like Amazon and google have steadily expanded their business into the Dallas and Austin areas. And now, the corporate finance insurgency is diverting a loyal pool of fresh graduates from traditional tech companies, according to university career development officials.

Linda Parker helped engineering students at Southern Methodist University in Dallas land jobs at top local companies like AT&T, Deloitte, and Texas Instruments for nearly 10 years as Director of Career Development at the Hart Center for Engineering Leadership of the University. In recent years, she has noticed an increasing number of students accepting offers from financial firms such as JPMorgan and Goldman Sachs as they expand their operations in the Dallas area.

“I’ve seen this trend where you have a lot more financial services type companies hiring engineers because they need that mindset, that different approach to problem solving,” Parker said. .

The demand for tech talent is spreading across the state, with engineering students at the University of Texas at Austin also taking more fintech jobs in recent years. Michael Powell, director of the school’s Engineering Career Assistance Center, said over the past decade he’s seen students’ interests expand to include knowledge of business and finance alongside their technical skills. .

As a result, UT Austin and SMU have revamped their academic offerings, hoping to better prepare students for a job market where technical skills are more desirable than ever. The McCombs School of Business at UT Austin is now home to a blockchain initiative to help students research and better understand topics like cryptocurrency and digital payments, for example. Additionally, SMU’s revamped curriculum for MBA students, released in 2020, emphasizes data analysis and project-based learning.

Top executives not exempt from migrating from Texas, with several abandoning their New York headquarters for the state

The boom in Texas, initiated on the ground floor with college graduates, is also attracting finance executives at the highest levels.

Goldman’s continued investment in the region, which has been primarily focused over the past five years, is largely in response to a growing number of clients in the region, as well as a nascent technology ecosystem that is producing talent high-level, according to Ram Narayanan, Dallas engineering director at Goldman.

Narayanan is just one of many executives the company has recently moved to Dallas from its New York headquarters. The others are Liz Martin, head of large partnerships and integrated consumer finance at the bank, and Stephanie Cohen, global co-head of Goldman’s consumer and wealth management divisions. Cohen, for her part, has emerged as a potential successor to CEO David Solomon.

“There has been a concerted push from company leadership to ensure we are making the right investments in our Dallas offices, and that has been a consistent theme over the years. There has certainly been great enthusiasm for the quality and quantity of talent we were able to find,” Narayanan said.