Contracting in the financial services industry: Is it beneficial?

It is becoming more common these days for contractors to be used within the financial services industry. Outsourcing is something that many industries are embracing as it can offer more flexibility in the way that a company operates.

Why is a contractor needed?

One of the main areas where help is often needed is administration. Particularly in a small bank or credit union, administrative tasks can take up a great deal of time. As it is sometimes difficult for small financial institutions to allocate the necessary resources for administrative duties, external services can often ease the burden and help productivity. For example, outsourcing payroll administration could allow a small institution to relocate a staff member to customer services, ultimately improving customer satisfaction.

To identify the staff roles that would be better served through the use of an external service companies should develop a contractor-staffing model. An accurate staffing model is essentially a forecast of the future staffing needs of a business. A review should encompass the company’s overall goals, plus any plans for expansion of product lines or other major changes that would directly impact on the required staffing levels. As a company progresses there will undoubtedly be a need to take on new staff, either on a full-time basis or in temporary positions to assist with particular periods and nature of change. It will detail the roles that need to be filled while ensuring that the right numbers of people are on hand at all times.

Interim management services

While relocating resources and long-term outsourcing proves to be beneficial to smaller organizations, it’s important to note that temporary management solutions also yield much value.

There has been an increase in the use of interim management services in the financial sector in recent years. According to data from the Interim Management Association, contractors have seen a growth in new assignments of around 8%, with some assignments lasting for six months or more. It also states that financial services currently account for around half of all interim management contracts within the private sector.

Advantages of using interim management services can be found with short-term recruitment efforts as it allows companies to recruit a staff member at relatively short notice. As a company’s productivity may be affected with staff on leave or in training, hiring contractors helps fill the gaps. These temporary employees are trained and experienced professionals who have the ability to hit the ground running, helping to make the transition seamless. Additionally, interim management services are also useful when there are special projects planned, as the staff can be brought in for the length of the project only.

Despite the value an interim staff member could provide, the thought of hiring contractors may not be appealing to some managers in financial services as it could mean a lot of additional paperwork. However, umbrella companies such as self-employed PAYE, offer services that can ease this problem. An umbrella company can deal with invoicing, timesheets and taxation, making it a lot easier to bring in a contractor to meet the required staffing levels and maintain productivity.

 

Luke Spoone is well educated freelance writer with a passion for finding cost effective solutions for small businesses. He would like to start his own consultation business as he feels he has a lot of advice to offer.

 

Written by Luke Spoone

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