IT contractors in the financial services sector are being paid
12% less than six months ago as the credit crunch forces firms
to cut costs.
The report said this is the first fall in IT contract rates in
the sector since 2002.
According to research from the Association of Technology
Staffing Companies (ATSCo) and
www.iprofile.org the average pay
rate of £44 per hour rate is the lowest for five years. At the same
time last year IT contractors in the financial services sector
received £50 per hour.
This is the result of new employment contracts being signed with
lower pay rates and
not cuts to existing contractors' pay, said the report.
Ann Swain, CEO at ATSCo, said falling demand for IT contractors
from banks is the cause.
"Contractors are typically first into and first out of any
recession. The $64,000 question now is whether falling demand for
IT skills in the financial services sector will ripple as far as
permanent staff."
Phil Morris, European managing director at sourcing consultancy
Equaterra, said banks are looking at areas to outsource and
offshore to save money.
"There is strong price competition for anything that can be
taken off-site and that is impacting contractors pay," added
Morris.
But some parts of IT in financial services are likely to see an
influx of spending as a direct result of the credit crunch.
"
Market turbulence has exposed many latent problems that banks
have with their back office clearing systems. These systems will
need to be overhauled and updated," said Ann Swain.
ATSCo points out that the fall in pay for IT contractors in
financial services is not being mirrored in the wider economy, with
contract rates for all sectors static at £40 per hour.