Brain drain in finance?
Increasingly, people at my target are moving towards studying CS and pursuing SWE.
If you are decently smart, got into a good school the value proposition of finance seems to be reducing vs 10 years ago (lower pay, tough hours with minimal WLB) etc.
As an econ / CS double major, was curious if people are noticing the same thing. Also very interested if there are people that went the IBD route over the tech route on purpose and if they are happy with their decision.
For reference, currently a sophomore at a mid ivy.
One problem with this…if you go CS/SWE, you have to love coding all day. Yes, perhaps WLB for the pay is better, but if you hate one-dimensional coding work, it will not be a good time.
I mean I'm assuming if your intelligent enough to get into FANG and move up the ladder, you enjoy being a SWE right?
You typically don't get into FO finance, or top tech jobs without having some drive, passion, vision, you know to get these jobs
Going into tech is a no brainer. They pay more because it's more challenging work and it's where all the growth is for the next 10-50 years anyways.
IB is a losing proposition IMO. Finance / Business is overrated career. Your just littered with more stress the higher up you go, and the more you have to deliver.
Some fair points, for sure, but not everyone actually likes coding all day.
It’s tedious, myopic, and for many, just not that fulfilling. If you don’t like the work, and enjoy your day-to-day in finance more, then you won’t be any happier in FAANG.
The skillsets needed and personality types in SWE are completely different than IB so don't think it's really a fair comparison
Your message is true, but most engineers only spend 2-4 hours a day programming. Maybe 6 max. There’s usually a lot of other work involved as well. But your point still stands- if you hate coding then don’t go SWE
I think this move is understated. Grass isn’t always greener, coding all day sucks and the comp ceiling is lower
I think it is also important to recognize the tech bros shit post on wso and talk up their careers. We don't post on silicon valley oasis because we are the apex predator and have been for decades. Also, chicks don't want to bang coders lmao
Ever met a SWE that had social skills or comped carry? Me neither
Something tells me someone who specializes in low latency servers and networking with concurrency isn’t super interested in hooking up with “chicks”.
Hard to believe, but some people are genuinely passionate about a subject area and chose to pursue a career in it with no thought towards money and women.
Both industries suck. The move is to start your own thing instead of working for someone else. Running a business is more interesting than being a coding/excel monkey
Look, unless you are absolutely exceptional, there’s no free lunch out there....that’s reality you have to do your own thing.
Or maybe some people just hate coding and find finance more interesting? Not everything in life is about pay lol (and yes ik what website I’m on)
Plus, not everyone can just waltz into a FAANG SWE position
This is where a big misconception lies. People think its hard to get a FAANG SWE position. If you were able to get into an ivy + can land a summer analyst position at a top BB/EB then you 100% will be able to land FAANG SWE. Everyone can in fact waltz into an Amazon SWE position. Starting this year FB started handing out interviews like candy too and once you get the hang of leetcode you find that its not rocket science. On top of that FB just repeat asks the same 75 questions.
I guess its good for swes how everyone still thinks that we're "smart", but that isn't the reality. There is a huge difference in the caliber of even the top 25 percentile at F/G compared to the top unicorns and hfts. The best comparison I can give is if you think of FAANG as the lower bulge brackets. FAANG was never cream of the crop and these days even less so.
Mostly true. Interviews are still hard and there’s more to it than LC. But the barrier to entry “seems” higher for IB. I say that with the emphasis I’ve never interviewed with an IB before so I have no direct knowledge of what it’s like, besides this forum.
There’s hierarchy within companies as well. Landing a job in FANG is like landing a job at a BB. People work back office jobs in Goldman just like support engineers work at Facebook. Typically the top roles in engineering are Growth teams and Infra/ Platform teams (depending on preference). I suppose MLE would be even more sought after but that’s a different skill set too
Except in SWE you have to walk around knowing people in IB are superior to you
Studied math and went into finance - genuinely more interested in the field. While I have no misconceptions that IBD is an intellectually stimulating job, it buys me a couple of years to figure out where to specialize
Also just generally find tech / VC culture very fake/disingenuous - these people sit on their high horses and preach moral superiority while developing / funding toxic platforms designed to exploit everyday people (e.g. buy now pay later platforms just putting a tech-enabled gucci belt on payday loans)
Also just gives me the shivers on the man-child culture tech embraces - call me old school but I do like the professional aspect of work and keeping boundaries between work/personal life
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It definitely is, but IMO they are two very different career paths anyways, if you chose based on what you think you'll make the most money at...you won't get very far because you won't enjoy your work.
I do agree that there is a brain drain from finance. Anecdotally, I know plenty of folks who have left finance for tech (myself included), and very few of these people have any inclination of going back to finance (in the interest of fairness, there are a couple that did IB/PE > tech > VC, but VC is obviously the least "finance-y" of all subsectors within finance). Also, my roommate from my analyst days is still at the same bank, and he has noted how they continually have to widen the net (partly due to growth in his firm/group, but also because it turns out tech is just more appealing to the high achieving type A kids these days.
Corporate banking at a non BB could be chill
Math + Econ double major here. Now in investment banking.
First time I sat in a cab with my MD, MD literally asked me hey kid why didn't you do that quant route because you know math whiz kids (far from it) who can code can just trade their own strategies. I was like didn't like coding all day 4 years ago when I hade a choice but I don't mind doing that now you know?
MD was like so it's hard yeah? I was like yeah not that many people can really trade their own strategies.
Almost 4 years out of my undergrad, I've kinda figured out that I like the business & operations side of companies, not the pure-play finance side where you try to predict/guess what happens next or "pull deals".
I also know some people who don't really enjoy coding, but know FAANG careers are GOOOD. Same as those who don't like banking or finance but are in it for the $$$.
IB is literally an entry into a higher social class; with SWE you're stuck competing with hordes of fresh grads from state schools until you retire. It's not even remotely comparable
Yes there has been an ongoing brain drain in finance post financial crisis because Tech is massively higher margin sector
lmfao here we go again.
Investment Bankers have spent too many hours in the bullpen to realize that there was an easier path to happiness.
Why is there this constant tech vs finance debate? If you like tech do tech, if you like business do finance.
Easier to go engineering to industry to mba to finance then have option to stick in finance or return to industry with strong finance background/c-level path than it is to go finance from undergrad to banking to industry with same level of credibility. The ones that can pull off the engineering to finance to management transition successfully can have a very high ceiling.
For the most part, an engineer with an aptitude for business can do finance and be placed in finance roles but a finance guy/girl cannot do engineering.
One of the only advantages of the direct to finance route is you have better chance to exit banking into PE if that’s the goal. But even then, you have a clock on you until your next move depending on promotion paths.
Everyone wants to go CS until they get to a class and realize how much harder it is than your typical finance or econ class. You can't just cram stuff, you genuinely have to take the time to learn things which is what makes it "difficult".
With the advent of tech roles after the crisis (especially in compensation), the lure of finance relative to hours just isn't that great of a trade off anymore. Is it really worth the extra 100k a year out of school to work 40 more hours a week? For some people it might be, but I reckon most are asking that question.
As for the upside in finance being higher in tech, that is just absolutely not true. The same individual making it in to the top of finance (head of a group, or staring own fund) would be the same type of individual making it to the top of tech (head of engineering, or starting their own company). Both are equally as difficult and require a lot of politics if you're not a genius.
There is also lot more room to do something on your own in tech than in finance. In fact, you can probably go into finance later if you really wanted to. As someone else said, you can go from CS/engineering to finance, but you can't do the other way - that should sum it up.
Hardest thing about tech is the interview process itself. If you're not familiar with it, it's basically become a small marathon of technical interviews.
Tech is still one of the few fields where a complete non-target candidate can be chosen over a top-target candidate - if the latter is not able to perform on the spot. And unless you know your fundamentals in and out, you need to practice beforehand. Some need to practice for a couple of days, some weeks, some months.
Point is: There's absolutely nothing guaranteed. You have to be able to walk the walk.
As someone who successfully went through FAANG interviews, I think the difficulty is very overrated by people on WSO. It’s actually very similar to IB prep. You can read/memorize the cracking the coding interview guide just like the M&I guide, and they also just recycle the same questions/tests. Being from a top target does help a bit, but definitely not as much as in finance, and these firms also have diversity initiatives similar to finance. I also found fit/networking were much less of a factor
Though you usually have to have taken a coding class, and those are harder than intro finance/accounting classes. Also, if you’re going into tech, you’ll probably be pursuing an engineering/stem degree even after you land an internship, which is obviously harder than other majors, especially since you can study something like government or management and still go into finance.
I've gone through the same process myself, many times. Some successful, others not - but it should be mention that I have a BSEE and MS in Applied Math, so I took my fair share of Comp.Sci classes, on top of having coded for years - also in jobs that focused heavily on building custom data structures.
So with that said, from my experience, the biggest difference was:
1) In tech, you're really at the complete mercy of your initial interviewer(s) - if they have a bad day, you're going to have a bad day. If they interpret your thought process / logic wrong, you're wrong. etc. It's a churn, and many FAANG companies are completely fine with rejecting perfectly qualified candidates - it's all about minimizing false-positives.
2) The interview process seems to be in a constant arms race with the "How the ace technical interviews" cottage-industry. Everyone can access leetcode/hackerrank/etc, and memorize the solutions. So companies up the difficulty...but that still doesn't stop candidates from spending 6-12 months on memorizing tougher problems.
The main criticism many devs in the industry have, is that you could be a shoe-in candidate, with many years of experience with 99% match - and still get rejected, if you happen to fail at yielding the optimal solution to some esoteric leetcode hard question, in under 15/30/45 mins.
But it's a numbers game. Luckily, the companies will interview almost anyone that can meet the bare minimum requirements, and they'll interview you as many times as it takes
just out of curiosity what exactly do these people that work at a FAANG do that make 300k and supposedly work 40 hours? Because I know someone very high up at Amazon and they make a lot and most on there team compensated pretty well but they all work 60-80. I know a couple people in tech but the ones making a few hundred grand all seem to be working a lot.
-i do know one or two coders who make low 100's and work about 40 but they dont seem to be moving up the ladder at all
Amazon is a really bad reference point. They are consistently rated for having the worst WLB and lowest compensation of large tech firms.
Any senior engineer at Google (excluding Google Cloud where they compete with Amazon Web Sevices) should be making over 300k with good WLB. There are better firms outside of FAANG. Linkedin comes to mind with better pay and less hours than Google. But it all largely depends on your managers so you'll still find Amazon engineers who have a sweet deal. It's hard to generalize large firms because there are just so many engineers each doing very different things.
Also most engineers use agile project management which means they have a lot more control over their schedule. Engineers can input how difficult a project is and what is reasonable delivery date.
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I am not at a IB target school I live in the south. I think you are correct I was comparing the bottom or middle class of the tech field to the upper class of the finance field in that case. Well to late to switch to tech now :(
Its the product managers. Think of the product managers as the VP's bossing the analysts (software engineers).
I never really understood this argument. The jobs are extremely different and will be interesting to very different types of people.
I'm a math major and coming into college I was set on quant--started preparing for the putnam exam/grinding leetcode as a freshman. After talking to a lot of people and doing a few internships, I realized that the culture is very different between quant + SWE and IB/PE. IB is much more fratty, which I felt much more comfortable with (idk what that says about me). The work and culture are so different that it doesn't make sense to me how you could be considering both.
At the end of the day, you will succeed in whichever you enjoy the most, with enjoyment being a function of skill, passion and cultural fit.
i think its morso most of us on here are intelligent enough we could of been successful in tech and are wondering weather we made the correct choice or not. The culture in tech just seems to be inarguably better unless I am missing something.
If you made it into IB, you're more than intelligent enough to make it into tech. But with that said, tech is a horrible field to work in if you're at least somewhat passionate about the work - you're not gonna stay a generalist for long, and in the end of the day, you're gonna be working (and competing against) people that are deeply passionate about quite niche stuff.
And to be quite frank, for most regular people, it's easier to become passionate about companies / general economy / etc., than some obscure software libraries, network protocols, compilers and interpreters, etc.
Lol we’re all just typing stuff into a computer at the start of both careers anyway. Do you want to create excel models and slide decks or create frontends/ platforms/ and bash scripts?
Neither is inherently better than the other. There’s pros and cons sure, but they roughly even out in the early years. In both fields, it’s political to move up. Any VP of Engineering at a big firm has to have the social skills comparable to any VP at a bank.
Do you want to work on servicing companies’ financial needs (or later moving to buy them out if you go into PE) or do you want to be building something within a company? Both pay well, both have tons of upward mobility, just figure out what interests you more.
If you have time, try to land an IB internship and then a SWE internship. See which you like better.
Can you go from two SWE internships to a junior year IBD internship? Would your SWE background help or hurt your finance recruiting prospects, especially given that you're competing with people who had finance internships in prior years? I'm a freshman at a target who's interested in both SWE and IB and was wondering if a SWE background would help me get into the tech/TMT IB groups
I’m not the person to answer this, I’m a SWE and never worked in IB. I know the inverse is true, if you intern in IB then the SWE door is always open too. It’s far less reliant on previous experience or fitting into a box if that makes sense.
I think some of y'all are missing a very important point: some IB people (or maybe it's just me) can't fucking code even if their life depended on it
I mean obviously if they never coded before. You can’t just code off the top of your head. Im pretty sure most IB analysts can pick up coding if they wanted to because coding isn’t hard. Coding is just boring af.
I got a 9 on my CS final so maybe I'm just retarded
Nobody here will want to admit it I'd assume, but yes it's a no brainer to go into tech.
10 years ago this question didn't get asked much, now it gets asked a lot more, 10 years from now it won't be asked much again because everyone will know the answer. Never before in human history has there been a way to scale up the value you add (and the associated salary) like tech.
I don't really understand the comments....
All else being equal, if you have equal passion for coding vs finance, and you are equally as good, coding is the better bet IMO.
Tech just offers a better lifestyle, all else be equal.
If you do NOT like / enjoy one field or the other, the question is very different.
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