Investment banks' appetite for recruiting IT contractors is showing some signs of tailing off, despite the restrictions on securing permanent headcount, and there are signs that the market is becoming a lot more competitive.
We've mentioned previously how banks were recruiting IT contractors to make up for the slow down in permanent hiring. Recent research by contract services provider Giant Group suggested that most contractors view financial services as the main area of job creation, and many from the public sector (where IT budgets are declining) are looking to make the switch across.
Unfortunately, this optimism may be ill-founded. In the last few weeks there are signs that not only are banks freezing permanent technology headcount, but they're also curtailing their use of contractors.
"The number of new contractor roles each month has been steadily declining since May, but this was from a high peak," says Ben Cowan, director on the contract desk at recruiters Astbury Marsden. "It's not reached crisis point - numbers are still healthy, contracts are being renewed and rates are remaining at current rates. However, appetite for IT contractor recruitment has been dampened in the last couple of months."
Part of the problem is that demand for contractors is no longer as widespread as it was in the first half. Contractors working on risk, regulatory and change management projects are still being hired, while front office projects have largely been relegated to the back burner.
Martin Rennison, head of the contract desk at IT recruiters the JM Group, describes the current scenario as "frustrating".
"Some banks reviewing permanent IT headcount have done the same with contract, and simply brought the shutters down," he says. "Others have released new projects and continue to hire, but this is largely for regulatory projects - where there's a clear deadline - rather than front office initiatives."
Should you choose to venture out and look for a new contract, some banks are still hiring, says Rennison, but in a sign that the market is now becoming decidedly more competitive, these institutions are cherry picking the best.
"There banks that are recruiting are taking their time, and realise that they can now secure some of the best talent available," he says. "It's not an entirely bleak prognosis - rates are remaining steady, but whereas six months ago top contractors could have courted three or four offers, now there's usually only ever one on the table."