Banks are giving out unusual 'bonuses' to contract engineers
Banks are losing their appetite for hiring ad hoc contract technologists in 2025. Some are being replaced by AI, while others are being replaced by in-house employees. Pay is also going down, but for staff already employed on fixed-term contracts the situation is a little more bizarre.
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One experienced banking contractor in London, speaking anonymously, told us a growing trend among banks is to provide a bonus to staff who complete the full length of their contracts. While that sounds like it could be a good thing, he said it's likely that these bonuses have been deducted from day-rates. They're usually around ~10% of contractors' total compensation.
End of contract bonuses aren't unheard of, but their profileration suggests contractors are harder to retain. Some are being transformed into full-time employees and leaving before contracts end.
End of contract bonuses aren't universally popular, with one London contractor condemning them as an "absolute no." The perception is that they benefit employers, who cut day rates and tie-in contractors who receive no corresponding upsides.
New contracts are, however, harder to come by. One London contractor told us "there are more contracts today, but the take home is less than it would have been in the past." Roles that had a day rate of £1k in the past are now paying £750, he said.
A front end development contractor told us that, in addition to rates dropping, "the market has seemed terribly quiet lately." Deutsche Bank said it eliminated 1,800 contractor roles earlier this year, while Singaporean bank DBS cut 4,000 temporary roles due to its use of Gen AI.
Still, there are benefits to contract work, like working hybrid. "I don't know anyone who has been asked to come into the office five days per week yet," the London contractor told us, "even at JPMorgan."
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