Will RBS contractors stand for the ongoing squeeze?
Working as a contractor within Royal Bank of Scotland's investment bank isn't all about 2k day rates.
In fact, recent developments should have many feeling rightfully aggrieved. Firstly, there's the fact that rates are being cut by 10%, and now ALL contractors are being forced to take a mandatory two-week holiday from 19-30 December.
This is all part of RBS's cost-cutting drive in its investment bank that includes vetoing new Blackberries, a cancelled Christmas party, a ban on offsites, a curtailment of new publication subscriptions and a requirement to travel economy class on short-haul flights.
On the one hand, the compulsory holiday for contractors makes sense - one project manager who has worked for various investment banks tells us that the Christmas period is unusually quiet, and that it's near impossible to get in touch with all of the key decision makers during this time.
"From a business perspective, I can understand why a bank wouldn't want to pay a contractor 700-800 a day when the project isn't really moving forward," he concedes.
However, another long-term IT contractor (who has been working in a development role within the same investment bank for nearly 18 months), says that in the past he's been drafted in over Christmas to cover for permanent employees on holiday to ensure the project remains on track.
Any mandatory period of absence is unlikely to be well-received by contractors, he says.
"The relationship shouldn't be viewed as one of employer and employee, but rather as the contractor fulfilling a business need for the bank," he says. "If there's not a specific requirement for their services at any point, it's arguable that the contractor shouldn't be there at all."
Contractors are being squeezed anyway. As well as the rate cuts, certain provisions in the Agency Workers Directive (which came into force last month) reduce the flexibility that contract resources offer.
Some conditions oblige companies to offer bonuses and annual leave comparable to that offered to permanent staff, and that - after 12 weeks' continuous service - temporary workers have the right to the same daily rate as full-time employees. Many are already predicting that organisations' use of contractors will decrease in the future.
In a strong employment market, it seems like that contractors faced with unfavourable conditions would simply look for work elsewhere. However, most are simply accepting the pay cuts as a sign of the times and staying put.
"We're not seeing CVs from contractors within the banks that have imposed rate cuts," says Kuljeet Chahal, managing director of Vivacity executive search and selection. "Many are being risk-aware and waiting for the right opportunity to prevent itself and from a headhunter's perspective, a contractor currently employed is more attractive than one who has been out of the market for six months."
