Demand for financial contractors falls as long-term plans take priority

Despite a 1% year-on-year increase in permanent vacancies in the finance sector, demand for contractors dropped by almost a quarter (23%).

That’s according to new survey data from the Association of Professional Staffing Companies (APSCo), which also reveals that median salaries across all professional sectors dipped by 1.3% year-on-year. There are notable fluctuations in terms of sector, with IT, for example, recording an uplift of 1.3%; in banking meanwhile, average salaries were down 3.6% year-on-year.

As investment banks in London finally begin to execute plans to uproot jobs from the City, overall vacancy numbers for permanent roles across all sectors took a 1% dip in February, while demand for contractors decreased by 9% year-on-year.

APSCo’s data, which focuses on professional recruitment, reveals notable variations between the trade association’s core sector groups in terms of hiring activity. While permanent vacancies across both finance and engineering, for example, have increased marginally (both by 1%), permanent placements within IT slipped by 7%.

Vacancies for professional contractors decreased by 9% across the board year-on-year, with much of this activity attributed to a notable fall in the number of roles within financial services.

Demand for IT contractors has also decreased by 16%. This is despite the fact that a recent report from Tech Nation found that the British technology sector is growing faster than the UK economy, growing by 30% in just five years.

Ann Swain, Chief Executive of APSCo, commented: “Amid the huge amount of uncertainty the UK is facing as the Prime Minister prepares to trigger Article 50, demand for talent remains incredibly strong. Despite predictions that the Brexit vote would decimate the jobs market, the fact that permanent vacancy numbers remain largely unchanged since early 2016 – a time when forecasts overwhelmingly predicted that the UK would remain inside Europe post referendum – is testament to the sheer strength and robustness of the UK economy.

“While contractor placements actually increased by 3% in February, a decrease in contractor vacancies suggests that employers are now prioritising long-term workforce plans, rather than short term gap-plugging, as we enter the new financial year. This is most evident within financial services, where it is apparent that the recent frenzy of temporary hiring, which created a temporary boom in demand for contractors, has now subsided to be replaced with more stable hiring activity until employers have a firmer idea of their plans post-Brexit.”