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Quant hedge fund finds its mid-ranking engineers are miserable

If you're a mid-ranking engineer in a hedge fund, you should probably be feeling ok with your lot. The tech stack might be cranky and the hours might be long, but you're probably not paid too badly, and you will surely be some solving interesting problems. 

This may not be enough.

Two Sigma, the New York-based quantitative hedge fund which pays its software engineers anything from $240k and $412k according to Levelsfyi, surveyed its engineers and discovered that mid-ranking people were a bit unhappy. 

Mid-career should be the "most exciting time," said Two Sigma chief innovation officer Matt Greenwood in a career discussion last week. "But our data didn’t suggest that was the case."

What the data did suggest, as shown in the chart from Greenwood's presentation below, was that mid-career engineers can find themselves in an "uncanny valley" of woe. 

Why are mid-ranking engineers so (comparatively) unhappy? Greenwood says they dug deeper into the data and the issue became clear: "The essential concern was a perceived lack of agency and autonomy." 

Early in your engineering career, it's easy to feel that you have agency, said Greenwood. You're a "gardener" content with tending your patch. You're also used to the notion you assimilated at university that upskilling is within your control and is simply the result of devoting more time to learning new languages or frameworks. 

But as you move into mid-career, your purview widens and your sense of control is diminished. "This is where the runway of knowledge you learned at college begins to peter out," said Greenwood. You're less focused on tending your own patch than nurturing a whole ecosystem. The skills that got you to that place won't get you any further, and you start to feel less autonomous because you're not able to get bigger ideas off the ground. This, in turn, leads to the perception that "you have no freedom to act."

Greenwood illustrated the experience with an example from his own career. When he was first promoted to run a team, he said he ended up rewriting all his teams code using the code-writing skills he'd developed in the first part of his career. It didn't take long before they came to him and said they obviously weren't needed and were therefore going elsewhere. “Even two decades later, that still haunts me,” he said. 

How can you avoid the valley of doom? The solution is to understand that making things happen at higher levels of an organization is not the same as at lower levels, and that for this you may need some additional skills. 

Often, mid-ranking people have a skills distribution similar to that shown in the spider chart on the left, said Greenwood. They're only good at some things. And yet, they think their skills are well-balanced. 

The secret, then, is to fill in the gaps. And the gaps are often soft skills, like leadership and communication. To solve this, you need to find a mentor, said Greenwood. Read careers books. Set yourself goals. 

As you progress through an organization, success isn't just about technical proficiency. Everyone at Two Sigma starts on the technical track, but at some point they're also given an opportunity to become a manager whose focus is the wellbeing of their people.

In both roles, though, it's necessary to understand the ecosystem. And this means having an understanding of context and being able to influence other people. Without these two things, feelings of powerlessness can spread. When you have an idea, you need to communicate to people who can explain the context and to do so appropriately (you need to "understand their API", said Greenwood). This is a very highly underrated skill in itself. 

Click here to create a profile on eFinancialCareers. Make yourself visible to recruiters hiring for hedge fund jobs where you will feel fine at every level. 

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Photo by Greg Rosenke on Unsplash

AUTHORSarah Butcher Global Editor

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