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It has become very clear over the last year that Investment Banks are not able to fill permanent positions in business analysis, project and programme management with industry expert candidates. The tight candidate market is being caused by the increasingly complex nature of financial/IT products.

As a result we’ve seen that since Q4 2006 especially, investment banks have started to relax their entry criteria for management level candidates and are looking outside of the capital markets industry to make key hires. Candidates from the top management/IT Consultancies in particular seem to be attractive due to their adaptability and leadership skills.

One key reason why management and IT consultancies are proving to be lucrative hiring fields for the investment banks is because of the work-life balance they offer.

Typically employees of management consultancies spend a large majority of their time on the road, so the lure of being based in one location is making consultants take the investment bank option. Not surprisingly, the bigger bonuses are also proving to be an attractive draw.

For consultants thinking of making a change, they can expect good financial rewards. Depending on the role and level of experience, we have been hiring permanent candidates at salaries ranging from £60,000 to £90,000. Between 40% and 60% of this amount is then a performance related bonus on top of the basic salary.

On the contract side, there is a high demand for business analysts and project managers with specific skill sets in both IT and business. The market does have shortage of these candidates at present and as a result clients are extending candidate contracts for longer periods of time (on average from a 3-6 months contract to new programmes of 6-12 months).

Unsurprisingly the skills shortage has pushed up daily rates. Project managers are earning from £500 up to £800 per day depending on the size of the project their working on, while the daily rate for business analysts ranges from £500 to £700. While demand for programme managers has remained flat over the last month, contractors can still earn between £800 and £1,200 due to the scarcity of talent.

In addition, the demand and rate increase has also been driven by the Markets in Financial Instruments Directive (MiFID), which aims to create a single, cross-European financial services market.

According to the Financial Services Authority, approximately 2,100 to 2,800 firms will be directly affected by MiFID with implementation costs anywhere between £877m and £1.17bn. The MiFID deadline of November 2007 is looming and the need for candidates with specific project management experience is ever more business critical.

As a result a number of investment banks, and more specifically those on the buy side, are looking to mobilise MiFID project teams now and it is anticipated that the demand in the area will increase considerably over the next few months. And this will be a tough order to fill. The size of the market pool is incredibly small in London with only around 100 individuals having strong MiFID knowledge.

This increased demand and competition for staff has caused employers to re-look at their recruitment process to become more efficient. They are offering candidate jobs much more quickly than before, knowing that some experienced contractors have a least two other job offers at any time.

Combine this with recent reports that financial services companies plan to increase their expenditure on IT this year and candidates are in a very strong position. So, if you’re a programme or project manager, or a business analyst with a number of years of experience under your belt then now is the right time to consider looking for alternative roles.

If you’re an employer, it is essential that you have a clear strategy for recruitment to ensure that you get the best fit for your organisation without serious financial implications.

Stephanie Sherlock is a manager UK and Europe at Project Partners, one of the UK’s leading recruitment firms for senior level IT specialists.