The True Cost Of Another FIX Onboarder

Chris Lees 4th Mar 2019
5 min read

Onboarding Productivity FIX Certification

FixSpec offers software designed to streamline and automate parts of the onboarding or certification process for banks and exchanges. Traditionally, large parts of this work have been done manually by customer-facing, technically-minded staff with niche skills and experience, who help customers understand their API and business logic, coordinate network connectivity, troubleshoot issues as they arise, and then finally sign off that the customer has certified correctly.

Not all of these tasks can be automated (yet), but there are a number of areas where software such as FixSpec's stack can add real value:

  • SpecServer can help explain your API clearly, offer tools to help developers understand change across versions and let them download whichever machine-readable format aids their development and testing.
  • Central automates the manual task of reviewing log files to either troubleshoot an issue for a customer or check certification.
  • SideKick can expose a real-time window out to customers, allowing them to understand and troubleshoot issues themselves.

Given the historically manual nature of this job function, it's often the case that buying decision faced by firms is whether to hire an additional FIX Onboarder or invest in tools to make the existing employees more efficient. [Note that it is always "people vs tools", as opposed to "buy vs build" - no firm that I've ever talked to believes their certification process is part of their firm's unique value proposition and therefore worth building internally; any existing internal tools were typically built out of historical necessity, and often sit unloved and creaking under the strain].

We all know that people and technology are typically paid for out of separate budgets and that technology budgets face continued pressure. In such an environment, it often feels "easier" to convince management of the need for additional headcount than extra tooling, especially if the headcount can be positioned as somehow temporary or project-related (even though we all know that consultants rarely remain temporary), or multi-purpose (such as assisting production support).

At FixSpec, we see firms make the same mistaken calculation in the "people vs tools" decision, in that they almost always focus exclusively on the base salary and not the full cost of an employee. At the end of this post, we calculate the true cost of an on-shore FIX onboarder in London - the number that we believe is the number that should really be used in these decisions.

Before we get into the calculation, however, it's important to stress that the key objective of FixSpec's tooling is NOT to directly remove or replace headcount (although people often consider us a threat to their jobs), indeed, our tooling can't operate without people to work them. Our tools are designed to increase the efficiency and effectiveness of existing headcount, thus allowing firms to achieve five key benefits:

  1. Ability to take on more customers simultaneously, shortening time-to-production and clear onboarding backlogs.
  2. Free up staff to be more pro-active and increase customer attentiveness.
  3. Reduce errors arising from manual processing, and eliminate inconsistent testing caused by human interpretation of results.
  4. Delay the hiring of the next headcount.
  5. Allow the next headcount to be both more junior (as the system implements testing as configured by more experienced staff), and more effective sooner.

By considering how many of the above five benefits can be realised by adding headcount alone, the choice becomes clearer. The only benefit achieved by adding headcount is that a firm can - in the short term - handling more customers and start to reduce its backlog. But this addition does very little to permanently improve the overall process going forward; it only puts a Band-Aid over the short-term problem.

Enough of the soft benefits - let's talk numbers! The following calculation is based on the job advert indicated in the image accompanying this article; a London-based broker is looking for an experienced FIX Onboarder at a salary of £75,000 per year. Here are our estimates of the total cost from the hiring firm's perspective:

ItemCost
Base salary£75,000
Annual bonus (12%)£9,000
Employer National Insurance£10,430
Paid vacation (25 days)*£7,979
Pension (5%)£3,750
Private Medical Insurance£2,000
Recruiter Fees (20%)£16,800
Desk / office / IT£5,000
Line Manager (12% of their salary)£12,000
Total cost£141,959
* Humans take holidays, but tools do not. So to compare apples-to-apples, we need to put a monetary figure on the "cost" to a firm of an employee who is being paid but not producing output for 25 days a year.

This rough estimation proves that the true cost of hiring an extra headcount is almost double the figure people typically use (base salary) for comparison purposes, and therefore the mental arithmetic that so many people rely on today is flawed.

And so the (obvious) final question that you may be asking is how does this cost compare to FixSpec's software licenses? Well, our pricing depends on how which applications are purchased and how they are deployed, but what I can say is that one of our largest customers -- a global exchange group using both SpecServer and Central across all of their markets -- pays less than this figure annually. And so unless your firm is huge and has very complex requirements, the simple fact is that FixSpec software can boost the efficiency of your existing team and delay the need for additional headcount, all for a fraction of the cost of hiring just one additional on-shore headcount.

Time for a chat perhaps?

P.S. If you are a FIX specialist and mistook this article for a job posting, then please contact Referment who advertised the job!

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