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Contractor services provider, SJD Accountancy, who conducted the research says that despite many banks continuing to trim permanent headcounts, demand for contractors with niche skill sets is strengthening, which is pushing up daily rates.
The growth in demand for contractors in the financial services sector is partly a response to ongoing hesitancy among employers to create permanent jobs. At the same time, financial institutions are under pressure to hire regulation, compliance and financial reporting specialists and so are bringing in expertise on a contract basis.
Many of the specialists in demand in financial institutions are accountants. For example, the new UKGAAP financial reporting standard, which came into effect in January this year, has created strong demand for accountants specialising in derivatives. Banks are also bringing in accountancy skills on a contract basis to ensure compliance with the new IFRS 9 accounting standard.
Simon Curry, Chief Executive Officer of SJD Accountancy, said: “Demand for contractors in banking and finance has surged in response to continuing job cuts and spikes in workloads in niche areas. It is often said that contractors are the first into and the first out of a recession. End users usually look first to temporary skills to address short-term capacity issues before bolstering in-house teams.
“Nearly a quarter of contractors in financial services have been contracting less than a year, compared to around a sixth last year, so there has clearly been significant movement of talent from permanent roles. With employment rights and benefits having been eroded over the last few years, contracting has come to seem like a less risky option.
“Many of the contractors finding roles in financial institutions are accountancy specialists, who are also in demand across the rest of the economy. Demand for accountants has surpassed pre-crisis levels, but the supply of qualified professionals is static, so upward pressure on pay is building.”
Demand
There are also other indicators which point to a strengthening demand for contractors in financial services.
Contractors who are out of contract in the financial services sector continues to fall. Nearly 95 per cent are currently in work, slightly up from Q2 2014. Contract lengths are also increasing. Less than six per cent of contracts are for three months or less, compared with nearly nine per cent the same time last year.
Mr Curry said: “The increase in the average contract length is a positive indicator that hirers are becoming more confident about their medium-term requirement for skills. Contractors are increasingly in a position to negotiate an increase or move to a competitor once a contract finishes, so a longer term contract is a good way for hirers to hedge against skills shortages and control costs by locking contractors in.”
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Susie Hughes © Shout99 2015
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