Contractors’ Questions: Will financial IT hiring recover before 2012?

Contractor’s Question: It’s a question being asked about the jobs market more generally but in terms of the finance sector, is the IT hiring drop-off just a blip, or is it a sign of graver things to come in 2012? I was thinking of returning to insurance but now I’m not so sure.

Expert’s Answer: Among insurers, there is generally more fat to trim from their staffing ranks than there is at other financial end-users, who have typically been operating leaner staffing models for longer. That said, and although there are some seasonal factors at play, insurers appear to be consolidating, so it seems that budgetary pressures are getting to them too.

In terms of whether the decline in IT hiring is a blip or something more serious, September will be the real test. If September’s IT contractor billings are bad in financial services, then the slump is going to run into next year. As we all know, December, January and February are usually grim for recruitment.

Some IT contractors may therefore have to sit it out on the bench for a while, if there is no bounce back by the end of the year. If there is a bounce, September will tell us – although it could actually come in October or early November. Later than that, though, and the market is likely to be all but dead until February. 

To clarify, what we’re seeing is hiring freezes on temporary IT people, and these freezes are in addition to the decision not to recruit for those IT positions where the worker is already leaving. Highly-skilled IT contractors will remain in-demand - but within financial services at least, there’s simply going to be more of them for clients to pick from.

The expert was Alexandra Kelly, founder of Powerchex, which screens IT contractors for jobs at financial organisations.