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RBS is trying to convince tech contractors to stick around

Cutting edge

Cutting edge

Technology contractors working on RBS’s IT platforms are being offered retainers to ensure that they see projects through to completion as the bank struggles to attract workers to replace its legacy platform.

The Scottish bank’s technology budget just keeps getting larger and another IT meltdown on ‘Cyber Monday’, which left more than 1m customers unable to access their accounts, is another example of why it needs to spend more. Most UK retail banks operate on clunking legacy platforms that are slowly being replaced, but RBS CEO Ross McEwan admitted on Tuesday that the bank had failed to invest properly in its technology “for decades”.

The series of acquisitions at the bank – which entailed all the acquired companies being transferred on to RBS’s often inferior systems – has exacerbated the problem. In March, it said it would spend an extra £750m across 142 separate IT upgrade and improvement projects. Analysts suggested this week that this needs to rise to at least £1bn.

Trade union Unite says that the ongoing job cuts at the bank have left its IT team under-resourced. However, recruiters in the City suggest that it’s been embarking on the steady recruitment of contractors, as well as relying on consultant resources. Currently, according to recruiters we spoke to, there are around 20 new roles emerging each.

However, RBS is not paying top market rate for these roles. The contract positions pay anything from £200 a day for relatively unskilled roles like file reviewers, and £800 a day for project managers and senior business analysts. Fearful that many will leave before the end of their contract, however, RBS has been offering retainers to ensure that contractors stick around until the job is done, particularly for those working on its Project Rosetta review of its interest rate hedging products.

In theory, there’s plenty of contract resource on the market, but RBS has a couple of things counting against it, suggest IT recruiters. Firstly, it’s replacing a legacy system that requires knowledge of old or defunct technology – not surprisingly there are increasingly few people positioning themselves as experts in this area and a number of banks are competing for the same skill-sets.

What’s more, according to some disgruntled recruiters, it’s also squeezing the commission it pays third-party recruiters to 8% for 12 months, meaning many are not inclined to put the leg-work in required to find this relatively scarce resource on RBS’s behalf.

Comments (3)

  1. RBS has several tmes cut the pay of contractors during contracts, saying “take less money or get out”, RBS dimwitted HR people genuinely seemed to believe this wouldn’t come back to bite them.

    …and they were right.
    The outsourced HR at RBS is like something out of the IT Crowd crossed with Fawlty Towers, but they look cheap to RBS management and no one seems to care whether they do a good job or not, except of course project managers who find their good poeple quit after pay cuts and that getting in new people has to navigate the way that the outsourced HR has a “close” relationship with a particular recruitment firm, so they quit as well.

    I’m not surprised RBS keeps having major IT falures, I’m surprised it works at all.

    Dominic Connor Reply
  2. I find the article ironic, RBS may now be paying top market rates (I have not looked) but they have a reputation for paying towards the lower end of the market.

    They may now be trying to retain staff until the end of the contracts but a couple of years ago when I was working on a migration project 9 legacy platforms to 2 strategic platforms my role was outsource to India (I understand that RBS have learnt that this outsourcing model hasnt worked and is back to onshore staff).

    Perhaps Ross McEwan would do well to ask his HR dept to speak to IT contractors that have previously worked on legacy RBS legacy platforms what it would take to attract them back?

  3. RBS just started another cull of contractors in Edinburgh and elsewhere no doubt. Only mandatory projects getting funding. They are desperately trying to cut costs. It’s not just about the failure to invest in technology which is as red herring – the offshoring of technology jobs to India has been a disaster. Almost every technology drive project is late or fraught with problems. Permanent staff know this but would never openly say so. Permanent staff admit this will cause even greater pressure on existing projects. Not sure where the author got the RBS rate figures from but they rarely pay over 250/day for senior business analysts. Contractors only stay on because the working conditions are decent.

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