Highly experienced Umbrella Company Employees and other independent professionals engaged on a contracting basis by RBS are posed to start looking for pastures new after the bank announced a global 10% cut in contractor pay rates for those earning over £250 per day.

This is the verdict of a number of prominent recruiters, who predict an exodus of in-demand contractors.

In reaching its decision, an RBS spokesman told Recruiter magazine: “We continually keep costs under review. In reaching this decision we have taken into consideration market day rates and those across the industry.”

The timing of the pay cut depends upon the period of notice for those contractors affected, varying between twelve and two weeks.

Recruiters are, however, already predicting that contractors with the most in-demand skills will desert the bank. Tim Sohal, senior consultant for EMEA at IT and global finance recruiter Reuben Chase, said that the move was a very obvious cost-cutting exercise that would affect permanent staff as well as contractors. He continued: “With a fairly buoyant market, particularly in London, the move will inevitably lead to an exodus for contractors looking to retain the rates they are used to.”

His views were echoed by another recruiter, who told Recruiter that the pay ray cut was short-sighted and  “a very short win”. Wishing to remain anonymous, he went on to predict that approximately half the IT contractors at RBS possessed highly sought-after skills in SAP and Oracle, all of whom, he said, “will find alternative contracts”. While other contractors will accept the cut for the time being, he added, “they will start looking for something else.”

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