City-based firms are paying bounties for IT staff of up to £10,000 in an attempt to take recruitment companies out of the hiring process and slash hiring costs.
Richard Lloyd, managing director of the technology division at recruitment company Robert Walters, said that £10,000 payments for recommending vice president level appointments were increasingly common throughout the Square Mile, although bounties for lower level jobs typically hit the £3,000 to £5,000 mark.
But even a £10,000 bounty can shave 50 per cent off the cost of using an agency to source a high level IT recruit, Lloyd said.
The trend is a result of serious cost cutting across the financial services sector, which has also seen contractor rates slashed by as much as 20 per cent.
In February investment bank Credit Suisse First Boston reduced its rates by five per cent and in May, Barclays said it would cut contractor rates by a fifth.
The average salary of an IT professional now stands at £39 per hour in a contract role, a fall of 8.4 per cent on six months ago, according to figures from skills analyst TheSkillsMarket.
Lloyd also warned that a glut of good candidates on the market, combined with the shortage of new job opportunities, meant that employers could be more choosy about who they take on.
"Client expectations have gone up even for junior posts and they'll wait longer to find the right person," he said.
"Candidates have to demonstrate they're a good multi-tasker. They want new hires who can do two or three jobs.
"Gone are the days when a techie went to an interview and said 'I want to be X'. You have to be very flexible."
Niche IT specialists and individuals with experience of specialist risk management systems and mathematical modelling tools are still in strong demand, according to Lloyd.
"Clients will pay top dollar for those skills but there are probably only about 50 people in the City who can do that," he said.
But, despite attempts to move recruitment activity in-house, City firms still rely on specialist recruitment companies to source overseas candidates and for their headhunting skills.
"Clients can access job boards but headhunting is something they never entertain. The best guys in the market don't go to job boards because they don't need to," said Lloyd.
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