Finance roles: What contractors can expect

There now seem to be signs of some increased hiring of IT contractors into the financial services space, yet we see this is as a seasonal trend rather than a recovery to pre-credit crunch recruitment levels. January is usually the beginning of the new IT project budgets so there is a little more freedom to hire contractors for IT and other operations. Here's what we at recruitment firm Hudson predict for contract staff facing financial services in the ICT, Legal and Compliance sectors for the rest of the year:





Rates may have reached the bottom



IT contractor pay rates will remain pretty consistent. There have been quite a few changes over the last 12 months in terms of decreased rates (both in what contractors ask for and what institutions will pay) but I don't think they will go any lower. We are not seeing our clients hiring patterns as 'cost is the only issue' but 'value for money' is certainly key. Expect more negotiation on rates but if you have key experience and skills that will help your clients either save money or make money, you are well positioned.





The more niche your skills; the better - though not for contract availability



IT specialists should experience a consistent requirement for their skills. Within financial services, if your service offering is focussed on a specific business area and domain, or specific technical skills your knowledge and experience will often see you as the favoured contractor to engage with.



If you are perceived as a Subject Matter Expert in certain technologies, product lines or disciplines (such as risk, or compliance) then you will stand above others whose knowledge is wider and more shallow. The flip side of this coin is there will be fewer roles you may be considered for, but if you are an authority on your area, you will also be competing against fewer contractors and so the number of interviews that lead to an offer will be reduced.



Paul Elworthy, associate director of banking and financial services IT recruitment





Veteran contractors may be undercut



It is also certainly true of legal contractors that we are seeing a slight increase in the need for contractors in the financial services space, but we also would be hesitant to call it a recovery.



The traditional maternity cover assignments continue to come up and we are beginning to see an interest in the assembly of teams of contractors of varying levels of qualification for specific projects e.g.: ISDA documentation updating/review.



Competition for roles is high as there is a plethora of quality candidates with all skill-sets on the market and this pool increases monthly, if not weekly. There are many more high calibre contractors on the market than we have seen since 2001/2 and these candidates are well positioned to eclipse those who might be of a slightly lower calibre, but more experienced in the contracting market, as they are available and will take pay cuts to obtain any kind of position available.





Zero-cost rivals will reduce workflow



The biggest challenge legal contractors face in the current market is the fact that the major law firms have lost business due to the market downturn and have insufficient work for their staff. Many of them are offering secondees to their clients at no charge in order to minimise redundancies and retain good staff in anticipation of a recovery. One of the most compelling reasons for hiring a legal contractor in the past has been that it is substantially cheaper for a client to do that rather than pay for a secondee from a law firm. However, no matter how low rates drop it is impossible to compete with the zero-cost offered by the law firms.



Monique Mullins, associate director of financial services legal recruitment





Redundancies will send signals of a buyers' market



The most active areas will be compliance, risk and regulatory roles. That said, the ability to move between roles or change stream is going to be very difficult for the first half of the year. The perception with all the redundancies being reported is that the market is flooded with talent. This leaves clients expecting to tick every box on their list. Clients are prepared to wait for the right skill set match rather than compromise on any of the 'nice to haves.' This should ease towards the later half of the year as the market begins to pick up. Most of 2009 will be tough but contract candidates who stick to roles that they have experience within will report greater success.



Robert Cooper, of the firm's finance, risk and compliance recruitment division





Hudson, a UK and worldwide provider of IT recruitment services specialising in banking and financial services.