Umbrella companies supplying contractors with expertise in the IT skills market could well be seeing a flurry of demand for their services in the financial services sector, according to new research by the CBI and PricewaterhouseCoopers (PwC).
During the second quarter of 2011, the survey reveals that employment in the financial services sector soared by 11,000, a surge that was also accompanied by significantly increased business volumes in the sector. On a slightly gloomier note, the study also shows that the rate of growth has started to slow and may continue to do so over the coming quarter. Despite this tailing off, business volumes fell only in securities trading and banking.
CBI Chief Economic Adviser Ian McCafferty said that the employment expansion in the sector was both unexpected and heartening. “Despite sharper cost increases and a small rise in non-performing loans,” he added, “firms’ profitability continued to improve with growth in volumes and incomes.”
The survey results follow news that Lloyd’s Banking Group is planning a cull of jobs totalling 15,000 by 2014 in its efforts to bring down costs. PwC’s UK Banking Leader, Andrew Gray, cautioned that continuing concerns about economic growth and demand have dented banks’ confidence. He added that the Independent Commission on Banking’s recommendation that banks separate their retail facilities from their investment banking units had led to an “unsettled quarter”, despite the apparent growth. In addition, confidence had also been hit by the loss of PPI (Payment Protection Insurance), leaving banks with an estimated bill of over £5 billion in compensation settlements.
Despite the forebodings, PAYE umbrella contractors with skills in the sector are likely to remain in demand at least in the short term.