Saturday, February 16, 2008

For all my IT contractor friends in the City: Rates are up

Over the last few months there has been a reoccurring topic at any gathering of IT workers in London: What does the turmoil in the financial markets, the so called ‘credit crunch’ mean for employment?

Specifically: are we looking at another down town like in 2001/2002?

Well, the answer is, according to this piece in last weeks FT we have an answer: more money.

The average hourly rate has increased from £45 to £50 per hour. Of course most of the banks moved away from hourly rates a few years ago, most people earn ‘professional daily rate’ so multiply that by 8 (the official number of work hours in a day) but expect to work 9.

The City of London sucks up a lot of IT talent, and many of the best people choose to work as IT contractors. This is logical, the City pays well, jobs come and go but there are always projects, they just move around. Since IT is always at the bottom of the bonus pool you might as well take your bonus one hour at a time.

Frankly I think most of the IT work in the financial markets is pretty boring, the City pays well to offset the boredom factor. Most of the problems I have seen or been told about in the City are down to:

• No shared goals between departments, call it political infighting if you prefer couples with:
• Individuals who will not share their knowledge: traders, analysis, quants and yes, especially IT people
• People who don’t understand IT and a continued belief that IT is like any other resource to be managed the same way. Thus leading to:
• Adherence to the traditional project management model

Add in an extreme short term view which occasionally swings to extreme long term and you have a recipe for disaster.

I don’t think many financial institutions actually care about getting their IT right. After all they make money from financial deals not IT. The IT can be pretty screwed up and you can still do trades and deals. They won’t go bust from bad IT so you can afford to carry on doing it wrong.

However, banks and friends do have large amounts of money, so when they do care about their IT they can afford tools and advice from snake oil sales men. Whether they are selling tools, services and silver bullets, none will fix things, at the end of the day you really have to care to want to fix things.

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