Investment banks get choosy with IT contractors

Their riskiest operations already face a ring-fence, but now investment banks are lining up IT candidates for similar treatment - by no longer gambling on contractors who meet only some of the recruitment criteria.

Revealing the IT hiring trends between July and September, recruiters at JM Group said the banks refused to exceed defined payment brackets for contract candidates, "no matter what the circumstances."

In contrast to the payment practices the industry has become notorious for, investment houses "will no longer risk taking a gamble on good [IT] candidates who meet most but not all of their requirements."

Partly, this reflects "a good supply of quality candidates coming onto the contract market", the IT recruiter said, meaning clients can afford to be "more cautious" with new freelance hires.

But mainly the new fastidiousness owes to the "increased number of banks monitoring their costs lines more closely" as, like others in financial services, they wait to "see how the next few months play out."

This refocusing on costs, evident since late August, has led to a "definite push towards the recruitment of [IT] staff at the lower end of their defined salary brackets", according to JM chief executive Dave Pye.

It is also why a growing number of candidates who were placed at investments banks in high-paid contract roles are being asked to convert to a permanent position. 

Alongside these cost-reduction initiatives, the average headline rates at investment banks have fallen, with a slight dip over the last few months. This was said to reflect a decrease in the number of new freelance IT posts being generated by the banks.

Still, assuming the hottest skills are the most resilient to the downward pressures, trading platform developers, developers with Java, C#, Sharepoint and Python, and technologists with a background in Risk or Risk Management, should emerge as the most unscathed.

"It is difficult to predict the market", JM Group reflected. "But we expect most banks to sit tight with regards to taking on new staff until the early part of 2012, when frozen headcounts will be released and new budgets approved."