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Financial services contractors suffer 12% rate cuts

Published on Oct 6, 2008 | | Contract Rate Checker

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A new report shows that financial services contractors have seen their average rates slashed by 12% over the past 12 months.

The research, published by the Association of Technology Staffing Companies (ATSCo) and iprofile, shows that the average contract rate for IT contractors working in the financial services sector is £44 per hour - the lowest average rate for five years. In late 2007, the average rate was £50.

Contract rates in other industry sectors do not seem to have been affected by the economic downturn so far - with an average rate of £40.

Ann Swain, CEO of ATSCo said:

"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."

"The key difference between this and the 2001/02 downturn is that IT departments had a skills surplus following the dot com and Y2K booms, but there is much less fat to trim this time around. Some belt tightening is to be expected, but mass lay offs seem unlikely at this stage."

Both organisations said that they don't believe that wholesale layoffs of contractors are likely, and that financial services contractors will still be in demand as banks seek to create more efficient IT systems.

However, contract rate data from other sites suggests that general contract rates have fallen over the past year - although we have not seen significant drops so far.