Pay jumps for financial IT contractors

The credit crunch appears not to have hit pay for IT contractors in the financial services sector, as recent research has shown an 11 per cent jump in the past six months.

The statistics, released by SkillsMarket and the Association of Technology Staffing Companies (Atsco), show that average hourly rates for IT freelancers working in finance firms rose from £45 to £50 - its highest level in two years.

Ann Swain, Atsco's chief executive, said the current economic downturn is very different for IT jobs than that which followed the terror attacks in the US in 2001. "Strong demand for IT skills in areas such as equities and commodities trading in investment banks is helping to pick up some of the slack on the credit side," she said. "IT departments are not as over-staffed as they were in 2001-02 in terms of IT skills, so there is far less fat to trim this time around."

She added: "Retail banks are continuing to spend on e-banking and web security at a healthy rate, and regulatory spending in the form of compliance with Solvency II and IFRS Phase II is already feeding through to demand for IT skills in the insurance sector."

Indeed, technology's use in boosting security, risk mitigation and creating efficiencies likely mean the financial sector will require more IT professionals, not fewer. "Ironically, during a slowdown investment in IT is often one of the best ways for banks to increase efficiency and make cost savings elsewhere, so despite difficult trading conditions, the City ought to resist savaging IT budgets," Swain said.

Stephen Grant, managing director of Atsco member Cititec, agreed: "Risk management and compliance are still growing areas of demand for IT skills in the City. If anything the credit crisis and the Société Générale scandal will accelerate this process, rather than put the brakes on spending."

Even if IT hiring freezes do occur, they may help contractors, Swain said. "Banks may look to mitigate employment costs by putting a freeze on permanent hires, which often creates more opportunities for contract workers."

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