One of the largest employers of IT Contractors in the City, Barclays Bank, is seeing its contractors depart in droves after announcing a mandatory rate cut of 10%. Contractors currently engaged by the bank have until 4th April to agree to the new terms but, according to sources who spoke to Contractor Calculator, many have treated the rate change as a breach of contract and chosen to leave the bank for greener pastures.

Some departments within Barclays are reportedly already “clear” of contractors. Contractor Calculator’s CEO Dave Chaplin, himself a veteran of the IT world, said:

“This is exactly the wrong time in the IT contracting market cycle for any bank to be taking such a risk with its IT. The best and most productive contractors are easily finding new contracts in such a buoyant market, leaving less qualified contractors and new starts to maintain Barclays’ IT systems and pick up existing projects.

“Even those highly experienced contractors who may decide to stay are hardly going to be highly motivated now, so the rate cutting exercise will backfire across the board. In my experience of managing teams of IT contractors through similar rate-cutting exercises in the past, the client can suffer from lost productivity as high as 10%, with the resulting impact on budgets and schedules.”

This isn’t the first time Barclays have announced a double-digit day rate cut for IT staff – similar cost-cutting measures were announced in 2008 and 2011.

With High Street banks RBS and Lloyds suffering recent glitches with their IT systems, as well as the huge outages experienced by NatWest a year ago, Barclays will be very keen to maintain the integrity of their banking systems – however this could prove tricky with their maintenance and support staff leaving in droves.

Photo by Ian