Banks are shedding permanent jobs, yet workloads remain the same. Who’s there to pick up the slack? Most likely a trusty contractor.

Global firms are leading the hiring charge because of the difficulty in getting headcount approved in Europe or the US. However, Aussie banks have also been receptive to these candidates.

The inherent flexibility of these roles has aided demand. “If the economy starts to improve, they’ll turn these guys permanent, however if the European crisis hits harder, they’re easier to cut,” says Michael Cunningham, partner, Anton Murray Consulting.

Everyone’s contracting

It’s a broad range of roles that banks are staffing with contractors. These include jobs in operations, middle office and finance. Investment fund managers in particular are searching for senior accounting operations people. “As a result of a few large-scale asset transitions in the market there are also some BA project roles going to contractors,” adds Cunningham.

While all this sounds great for contractors, the fact remains that 2012 premiums are much lower than five years ago. “Contractors are now generally paid daily or weekly rates rather than hourly rates,” says Sharmini Thomas, director, financial services, Michael Page International.

For instance, senior BAs might earn $100 an hour, which amounts to $1,000 a day after a ten-hour shift. “Now they are paid a day rate calculated to a maximum of 8 hours, which means daily takings of $800,” says Thomas.

Demand for IT contractors has remained steady. Banks see them as being a more flexible option for managing short-term projects. There’s also less red tape involved in letting people go when a project is over.

“It’s easier to hire contractors as they aren’t considered new headcount by many financial institutions, so sign-off is much easier than for full-time staff,” says Andrew Hanson director of financial services, Robert Walters.

Contracting candidates with rare skills like C#NET, Java or specific domain knowledge, such as insurance, superannuation or wealth management, are in significant demand, adds Hanson.