Reasons to believe contract recruitment is not facing Armageddon

Now is not a good time to be an IT contractor – demand has fallen to a two-year low across the UK, investment banks and retail banks alike have trimmed both headcount, and day rates and new job opportunities are scarce.

Another sign that cost-cutting is back on the agenda is enforced holiday – we’re hearing reports that any contractors that have not taken leave for 12 months are required to take between 10-20 days off this summer, which is eerily reminiscent of the situation before Christmas.

Are there any rays of sunshine amid the gloom? Well, outside of the banking sector companies are facing shortages around C++, Java, SAP, Security,.NET, SQL and Testing, according to the latest report from the Recruitment and Employment Confederation. Within investment banking any optimism is decidedly more low key.

“Contract recruitment is still slow – we’re actually seeing more permanent hiring currently – but investment banks which told us they weren’t going to do any contract recruitment this year, are now releasing roles,” says Martin Rennison, director of the contract division at IT recruiters the JM Group. “However, few contractors are being terminated and most contracts are being renewed.”

Few IT recruiters we spoke to pointed to any one bank ramping up, but the consensus is that the following areas are still comparatively busy:

User Experience (UX) and user interface (UI) design development: Banks continue to roll out trading apps for tablet and mobile banking technology, which means that contract demand for digital experts is still hot.

Equity and equity finance: Prime services remains an area where banks want to bring in contractors and there’s an ongoing need to develop trading systems for high volume divisions like equities.

Risk and regulatory: Yes, banks are still channelling IT budgets into compliance and risk technology projects and, yes, permanent staff are still reluctant to move across. Contractors are being drafted in.

Change management: Financial services firms are looking to streamline processes – everything from HR to finance – and the push for change managers, technical project managers and business analysts is ongoing in the contract space.

FX: The battle for the best FX technology is still going on.

Infrastructure: A number of banks – notably Goldman Sachs and UBS – are hiring infrastructure specialists for permanent roles. Recruiters suggest the contract market is comparatively buoyant.