There has, it appears, never been a worse time to be a contractor in banking. Particularly if you're "experienced" (ie. aged above 40) and expensive (ie. you cost more than £500/$670 a day). Banks are doing their utmost to cut back on technology contractors and people who've been in the industry for decades are going hungry. Or, so they tell us.
"I've been a senior business process analyst for over 35 years," says one senior contractor. "I recently found out that the people that work in the mail room at our bank get paid more than I do now."
While pay in middle office jobs like compliance and risk has risen since the financial crisis, senior contractors claim pay in their area has been cut to the bone. "I earn like $22 an hour," says one. "Seriously, I have earned many times that amount."
Credit Suisse's contractor purge is well known. Under new CEO Tidjane Thiam, the Swiss bank has cut contractor rates and numbers as it seeks to bring staff in-house. Where Credit Suisse once had 20,000 "external vendors", it now has 10,000. It's not alone: Deutsche Bank and Barclays are following the same strategy. At the same time, banks including Goldman Sachs, J.P. Morgan and Credit Suisse are shifting entire chunks of tech teams that were previously based in London to cheaper locations, like Warsaw.
The upshot is that there seem to be far fewer contractor roles than there used to be - especially at the senior end. When banks hire contractors, they want them to be cheap. Veteran contractors complain too that banks want new hires to be specialists in one area: "Junior people are being compartmentalized and therefore don't understand the whole process. This makes them cheaper. - Banks don't want us heavy hitters who can do it all."
"Juniorization is killing us," agrees another senior contractor who's been out of the market for months that are fast turning into years. " When banks hire they want associates and VPs. They want people who are cheap at no more than £300 ($404) a day. They end up hiring mediocre low cost people with a few years' experience. It's a false economy."
It doesn't help that as banks pull-back from using contractors, the balance of negotiating power is moving in banks' favour. One contractor talks of applying for a banking tech job that had 200 applicants. "Banks won't talk about pay any more," says another. "The price they offer is the first/last/final one. If you don't like it, then go someplace else."
In the UK, the rout is being made worse by the British government, which wants to hike the amount of tax contractors pay, and is hitting some people retrospectively. Contractors say they're being served "accelerated payment notices" which demand payment of tens (or even hundreds) of thousands of pounds in back taxes within 90 days - and which only allow these sums to be disputed retrospectively. "You're guilty until proven innocent," complains a London banking contractor. "I know a guy who just handed over £60k to the revenue. He just wanted to get on with his life. The contracting market is bad enough at the moment, without out this too."
If contracting is such a misery, why don't all the complaining contractors just become permanent employees? They've tried. But the senior ones say banks don't want to hire them. "Why should they convert me to full time if they get the same productivity (for years) for half the price and no benefits?," says one. "I had one of the best interviews of my life the other day and the bank said I was too senior for them," says another. "They want slaves, not gladiators."
Maybe it's time to apply to the mail room instead?
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