Is change management too reliant on contractors?
Change management is a hot area of recruitment , which is disproportionately reliant on a large number of skilled, and expensive, contractors. But are they all up to the job?
In the post-crisis world, regulatory pressures are driving business transformation initiatives within various areas of banks in the UK - finance, treasury, technology, operations and risk are all being shaken up.
Recent research by recruiters Ambition pointed to how half of the banks it surveyed had at least 50% of change staff as contractors. A roundtable session arranged by them, in conjunction with AB Associates, which featured representatives from Barclays, HSBC, RBS, Lloyds Banking Group, Royal Bank of Canada, Santander and UBS, revealed that in some cases the split is 60-40 weighed towards contract.
Contractors are expensive. If you're an experienced change manager working in a permanent position, salaries are around 80-90k, whereas contractors can earn between 650-800 a day. Assuming an average of 48 five-day weeks a year, this is 156-192k annualised.
If banks are paying such a premium, they expect quality contractors, able to hit the ground running and take charge of business transformation projects. This isn't always the case - a straw poll of the participants at Ambition's roundtable revealed that around 10% of contractor placements don't work out.
"A lot of people tailor their CVs for the roles we have, but when it comes to taking up the job we find they're light on experience," says one change manager at an investment bank. "The rates are so high currently, that a lot of junior guys are attracted to the roles. Unfortunately, they often require a lot of guidance and training."
Training and development is something usually reserved for permanent staff; the logic being that it's an investment that will pay off down the line. By training contractors, the bank equips them with a new set of skills and experience, only for them to leave when the contract ends.
Not surprisingly, more banks are trying to encourage change management contractors to take up permanent roles. Ambition's research suggests that 57% of contractors would turn to a permanent role for personal development.
The question is, though, which type of contractors are up for taking permanent roles. Some were forced to take the contract route after losing their jobs during the financial crisis, and could be lured back to the security of a permanent role. However, the battle-hardened change managers have no desire to walk away from lucrative contractor positions.
