Become a technology contractor; increase your pay 30%

Taking the contractor route seems like an ever-more perilous pursuit for financial technologists, but the more lucrative pay on offer is persuading more people - particularly in the junior ranks - to switch from a permanent position.

The latest figures from pre-employment screening company Powerchex paint a bleak picture for IT contractors in financial services. Job offers in January were down 80% month-on-month and 32% on this point last year when the market was relatively buoyant.

"Many organisations appear to be delaying funding decisions to see what other companies are doing and make sure they are not over-committing themselves in non-core projects. This is not good news for IT contractors," says Alexandra Kelly, MD and founder of Powerchex.

But despite the generally downbeat outlook, the reduced cash element of this year's bonus payments, coupled with deferrals, is prompting more investment banking IT professionals - particularly at the relatively junior ranks - to switch to contract roles.

Research by recruiters Astbury Marsden suggests that technologists working at analyst and associate level have received average total compensation of 60k this year - usually 50k base plus a 10-15% bonus. By working on a contract basis, with a typical payment of 350 a day for 260 days a year, estimated earnings are closer to 90k, it says.

"Some of our clients are reporting that they are currently struggling to attract or keep permanent resource due to a massive disparity between contract and perm pay at the lower level," says Ben Cowan, associate director on Astbury Marsden's contract desk. "Banks want to hire at the junior level, but candidates are preferring contract because to all intents and purposes, the bonus element is worked in to their day rate."

One area where contract recruitment is particularly buoyant at the moment is around compliance projects. The anticipated IT hiring spree as a result of a raft of regulations may have been over-hyped.

In the case of Dodd-Franks, for example, Wall Street & Technology suggests that most banks are simply making do with their existing headcount.

But while firms are attempting to move technologists away from front office projects on to compliance-related work, there's an "understandable reticence", says Ed Ekins, head of the technology division at Twenty Financial Services.

"Front office Greenfield projects are definitely seen as more 'sexy' and while regulatory projects are business critical, they are back office and consequently, banks are being forced to look at the contract option," he says.

At the senior end, day rates of 1,200 are no longer uncommon for these regulatory initiatives, he says, while project managers and business analysts can expect 650-800 a day.