Would you rather enjoy a lucrative contract rate, or the security of a permanent position?

Financial services professionals in Scotland have learned to love contracting.

Over the last two years, with redundancies rife and permanent opportunities thin on the ground, many have taken the contract route and found the flexible working environment and - importantly - lucrative day rates attractive.

Fast forward to 2011, and while a lot of banks and financial services organisations remain cautious about recruiting, their willingness to pay more for contract recruitment is ebbing away.

According to recruitment sources, contract vacancies within Scottish financial services firms have reduced by 25% on this point last year. Instead, permanent vacancies are on the up, with institutions north of the border looking to cut costs and secure more of a commitment from skilled workers.

Banks, in particular, are hoping to persuade change managers to take permanent positions, but risk managers and compliance staff are also increasingly being offered fixed contracts.

"More financial services companies in Scotland are shying away from recruiting on a contract basis, largely for budgetary reasons," says Mike Leeman, manager of finance recruitment at Bright Purple Resourcing. "Permanent recruiting is increasing, but securing sign off for a role is an onerous process. Ironically, this means relying more on contract resources."

Another problem that financial services companies in Scotland are facing is a reticence from candidates to take the permanent route again. As we've mentioned previously, despite the lack of benefits, it's possible to nearly double your salary as a contractor working in financial services. Few people seem willing to relinquish this.

"Redundancies in the financial sector forced many to take a contract position, but now they've made the jump people don't want switch back to working on a permanent basis," says one financial services recruiter focusing on the contract space. "Some contractors only have to work six months to gain the same salary as they would for a permanent position, but a good contractor will be working constantly."