IT contractors' faith in finance returns

Better-than-expected results and bonuses in financial services are convincing more IT contractors that the sector should payout to them as well, in either premiums or placements.



In a poll this month, the number of IT freelancers who said most of their contracts over the next year would be in financial services was up 50 per cent from six months ago.



Although the jump still means only about one in five IT contractors now think finance will be the top provider of work, a growing number also believe its contracts will be the highest paid.



Fifty-eight per cent of IT contractors responding to the poll, by Giant plc, in May this year said that the sector's woes were unlikely to mean that they would not get a pay rise.



Since then, the proportion of IT contractors expecting their earnings to increase over the next 12 months has notched up three per cent, meaning at least six in ten now foresee rates rising.



It is the banking sector, where Goldman Sachs and JP Morgan just posted near-record profits, which is leading the recovery for IT, says the Management Consultancies Association.



Systems integrators, for example, are benefiting from banks now facing IT issues that they shelved in the autumn of last year, said Fiona Czerniawska, director of the MCA's think-tank.



Giant's Matthew Brown pointed to the period: "In the aftermath of Lehman Brothers' collapse, IT directors and team leaders at investment banks were forced to let contractors go."



But more than 12 months on since the bank's demise, the IT jobs situation today is "different," because now "those same team leaders are being instructed to start hiring again," he said.



Analysis of the Association of Professional Staffing Companies' latest figures, exclusively obtained by CUK, confirms that organisations are, in fact, hiring IT staff for the recovery.



The APSCo index, based on the billings of more than 150 agents, shows that the number of full-time IT candidates placed at outfits is up 65 per cent for the six months to September.



Full-time IT hires have increased steadily since July and climbed 24 per cent in the last month alone, said APSCo director Marilyn Davidson, indicating confidence to take on IT staff on a permanent basis has returned.



However, she also spoke of a "bit of evidence to support the feeling that things are getting better" for contractors in finance, as the sector's demand for temporary staff has started to lift.



Though, overall, financers' favouring of contract staff, and the upturn in full-time IT hires in the key sectors, is yet to result in more demand or success for contractors supplying IT services.



According to APSCo, the volume of IT contractor roles advertised across its member companies in September reduced by six index points when compared with March.



And the number of IT contractors that the group's recruiters actually placed has also fallen since the end of the first quarter, from 100 index points then to 95.7 in the current quarter.



More in line with Giant's findings, APSCo's index does show that demand for IT contractors started to pick up last month, albeit marginally, after two consecutive months of it being static.



"Transaction volumes across debt and equities…recovering across the investment banking sector…is a contributing factor to the rise in job opportunities for IT contractors," claimed Giant.



Another factor that the firm cited was proprietary trading, an area of financial services heavily reliant on IT staff, which Mr Brown said was reviving, despite fears that it had lost its lustre.



The other shift in the financial IT jobs landscape over the last six months has been in the priorities of its contract professionals – who are now less likely to regard pay as their top consideration. This change is an indicator that confidence among financial IT contractors is growing.



Mr Brown said: "Earlier this year the sheer scale of the downturn in the job market was dawning on everyone and so securing an income to pay bills and mortgages became an understandable priority.



"We are not at the end of the tunnel just yet but these figures suggest [that] as IT contractors are less nervous about the prospect of being out of work, they are starting to place greater emphasis on career issues, such as the opportunity to develop their skills, when selecting contracts."