It looks like banking IT recruitment may have peaked in 2010

Over the next few years, techies in investment banking may come to regard 2010 as something of a halcyon time for recruitment opportunities.

Last year, banks in Europe allocated the largest proportion of their IT budgets to spending on staff, according to new research from Celent. This looks set to change going forward to 2013, with more firms taking the cheaper option of buying technology from a third-party provider rather than building in-house.

"This trend will be reinforced by the need of new technological competencies and expertise that might exist internally or could be expensive/difficult to attract," it said.

The situation is far from bleak, however. Securities and investment firms in Europe are expected to spend $28.4bn on IT next year (80% of which comes from banks), says Celent, which is an increase of 3.6% on 2010. And around $8bn of this will be allocated to staff costs.

Still, most banks are already tipping 2011 to be a slower year than 2010 when it comes to recruitment.

"There's no doubt that 2010 was about growth, and 2011 will be about consolidation," says one IT hiring manager at a US bulge bracket bank. "There will be some external recruitment due to natural attrition, but in the first instance, banks will look to redeploy people internally if the option is there."

The hiring picture is still somewhat muddied by the fact many investment banks have changed their year-ends and therefore delayed their recruitment plans.

But recruiters point to the fact that Citi, HSBC and UBS have already outlined relatively aggressive headcount increases for their tech teams this year.

"Whereas last year recruitment was very buoyant across the board, 2011 looks like being a differing picture from bank to bank," says Alistair Singleton, managing director of IT in finance recruiters 7 Fifty Two Solutions. "Some banks have continued to hire, whereas others have made it clear that headcount will remain relatively flat."