The beginning of the end for the contractor boom?

Ask anyone about the financial IT contractor market currently and you'll certainly hear the word 'robust', while the more effusive could even err towards 'booming'. But it's questionable how long this can last.

Nestled among reports of BarCap's 300 back office redundancies was the fact that, according to Bloomberg, a further 200 contractor roles were also at risk.

This isn't, of course, exclusive to IT and one swallow certainly doesn't make a summer. However, questions have to be raised about whether a combination of enthusiastic contractor hiring during the first half of this year and their 'cost flexibility' will make them easy targets if other firms follow suit.

Anthony Miller, managing partner of research firm TechMarketView, agrees that the first half of 2010 has been positive for IT contractor recruitment within the financial sector and that they will be among the initial targets should banks roll out any cost-cutting initiatives.

"Banks will be loath to lose highly-skilled and experienced IT contractors, but the pragmatics of the situation means that the economic argument will take precedent and they will make cuts with a hope to reengage those skills when they are needed again," he says.

But have investment banks shown any evidence of losing their appetite for IT contractor recruitment after the crop of weak second quarter results? Sadly, yes.

"A few organisations have been forced to reassess what resources they need, which includes permanent and contractor hires," says Paul Elworthy, director, IT, banking and finance at recruiters Hudson. "We're still seeing a need in business critical areas, those sectors with untouchable budgets and replacement hires. However, we're not expecting to be as inundated with contractor roles in the second half."

These still busy areas of recruitment include projects around commodities, equity derivatives, FX and risk, he adds.