eFinancialCareers

Pay for IT contractors working in financial services has slumped to its lowest level for five years. Considering the snowballing announcements of rate cuts for contractors within investment banks, this won’t exactly come as a shock to them, but many are now looking to other industries in the face of shrinking options in finance.

A survey of 4,500 IT contractors working in the finance industry by the Association of Technology Staffing Companies (ATSCo) and CV specialist iProfile.org says that rates have dropped by 12% in the last six months to an average of £44 per hour.

This is the first rate cut since 2002, according to ATSCo, and is the consequence of banks shelving non-essential technology projects.

And some financial firms are trimming their IT contractor headcount anyway, says Ann Swann, chief executive of ATSCo: “Contractors are typically the first into and first out of any recession.”

Banks are offering lower rates when it comes to the signing of new contracts, and most are accepting them without question.

Gary Chatfield, director of corporate accounts at IT contract recruiter MSB International, tells us: “We’ve had absolutely no requests for rate increases on renewal of contracts, as most contractors seem to be keen to keep a low profile.”

Paul Elworthy, associate director in the IT and banking finance division of Hudson, is keen to point out that the financial contractor market is still quite buoyant.

“Undoubtedly, volume requirements have shrunk, but new roles are still coming through. It’s easier for a bank to secure a contractor than it is to get sign-off for a permanent role.”

Both Chatfield and Elworthy say there’s actually growing demand for IT contractors in other industries, like the public sector and small and medium enterprises. Those working in financial services are considering their options.

“There’s a feeling there will be a migration from financial services to other sectors,” says Chatfield. “The problem is that there are not a lot of transferable skills, and many would have to cross-train to make the move.”

Elworthy adds: “If you specialise in banking for a few years, you can’t necessarily apply that knowledge to an organisation that has a completely different product.”

But surely there must be some bright lights within financial services? Karl Gregory, marketing director at iProfile.org, tells us that risk management and compliance remain buoyant and that the number of mergers between financial services firms means contractors are likely to be in demand for the integration of IT systems.