Number of financial services contractors earning 750 a day or more doubles in one year
SJD Accountancy 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. Nearly 500 contractors responded to the survey.
According tothe contractor services provider, 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.
SJD Accountancy points out that 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, comments: “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.”
He adds: “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
Other indicators point to strengthening demand for contractors in financial services. Joblessness among contractors in the financial services sector continues to fall. 94.6% are currently in work, up from 93.2% in Q2 2014. Contract lengths are also increasing. Just 5.8% of contracts are for three months or less, compared with 8.8% the same time last year.
Curry concludes: “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 a pay 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.”