Reply to: Contract vs Permanent in Investment Banking ?

[twocontract]

Depends on your age and objectives. I worked as a permie for an IB in the mid to late 90s. I then contracted at several over the following decade. Now I'm into my 40s I hope I never have anything to do with an IB again either as a permie or contractor. Having said this I enjoyed some of my time as an IB permie in the mid 90s but eventually age gets the better of you. There's more to life than long working hours and a decent bonus.

[Dominic Connor]

You might want to google my name why my opinion is useful/worthless (pick one)


>Permanent Role
>Within the hot area of credit derivatives, also may get a chance to work with >the very talented team members.

CD is a the pit of despond, a tragic cluster**** of Capita dimensions, the epicentre of gigaquid losses and colder than a witches tit, it is in no way a "hot" area the person who used this term is not only lying, they are taking the piss.

However, sorting out the mess can be lucrative and like all other financial products will be trendy again one day.


>Contract Role
>1 Year contract with a small investment bank but not sure which area exactly >they we’re a little bit vague in the interview.

Hard to evaluate that, especially since you don't say what you do, sounds like they need generic IT people.
The bigger bank will look better on your CV


>Take home pay ?
Price bonus at 25% of base, so as you say the numbers are close to the same, but given the costs, employers NI et al the permie job is marginally better.


>Job Security ?
>The contract is for 1 year which is great
I will bet money it can be ended very quickly if they want to.

> but it may or may not get extended, also credit derivatives within all banks is growing rapidly
In % terms yes, but from a catastophic fall.


>Career Progression ?
>Want to learn the business but like the contract role due to no politics etc etc.
Contractors are the result of a political process, you may prefer the types of politics contractors must deal with but don't delude yourself that they don't exist.

>Long Hours ?
>Hate working really longs hours, it would be ok occasionally for a 2 month period. But worried with the permanent role this could be the norm at least with the contract I’m getting paid by the hour.

Nothing you say implies that either option will give short hours.

[Bluenose]

And the recession started a few months after this prat gave his opinion

Hopefully the guy took contract rather then perm in credit which would have got wiped out

Holy 6-year-old-thread-resurrection.

Chimpmaster, are you still in IT ?

[SueEllen]

Also a 25 to 30 days paid holiday, its an extra month pay!

You need the paid holiday to put up with all the tulip that comes from being permie.

[SandyD]

many thanks Christhedon for your time and effort in your reply....

it has been most helpful, I know it's a decision I need to make myself but at least I can get opinons and various of other prosepectives...

BTW I have account for Tax etc etc but not pension....

Also I 'm assuming i'll get at least a 10% bonus in the permie role, through I know it's not guarenteed....

thanks again

Also a 25 to 30 days paid holiday, its an extra month pay!

[DeludedAussie]

At the IB I work at, contractors hired by the business are known as "temps" and are paid a lot less. The bulk of the business permies get paid less than IT permies. But then again this is the back office.

Re: Andrew - I doubt there's any recession on for next 2 / 3 years. There is definately one coming, but it'll take time to feed through to the economy. Just look at how buoyant the stock market is right now (unrealistically of course).

And the recession started a few months after this prat gave his opinion

Hopefully the guy took contract rather then perm in credit which would have got wiped out

[ChimpMaster]

I've contracted at Investment Banks for the past 15 years.

The only way to be permanent in Investment Banking is to be a business hire with a business bonus. You don't want to go being hired by the IT department. If you are not working and responsible to the business then go contract. Easy really.

At the IB I work at, contractors hired by the business are known as "temps" and are paid a lot less. The bulk of the business permies get paid less than IT permies. But then again this is the back office.

Re: Andrew - I doubt there's any recession on for next 2 / 3 years. There is definately one coming, but it'll take time to feed through to the economy. Just look at how buoyant the stock market is right now (unrealistically of course).

[Lockhouse]

I've contracted at Investment Banks for the past 15 years.

The only way to be permanent in Investment Banking is to be a business hire with a business bonus. You don't want to go being hired by the IT department. If you are not working and responsible to the business then go contract. Easy really.

[Stan]

But I guess if I get a decent bonus then it won’t be such a big difference. .

...

Hate working really longs hours.

Unfortunately there is often a strong link between these two thing in IB.

I think this could well be a good case of six of one and half of the other and it is down to yourself what tradeoffs you make, good luck.

[BlasterBates]

It isn't just the area eg credit derivatives, what are you programming in, what would you be doing ? What do you want to do ? programming ? business analysis ?

Are you doing risk, pricing, valuations or something like trade entry. If you ain't doing valuations, pricing etc the types of instruments you work on doesn't make a lot of difference.

Look at the roles in Job serve and look exactly what they're asking for.

[biggie]

many thanks Christhedon for your time and effort in your reply....

it has been most helpful, I know it's a decision I need to make myself but at least I can get opinons and various of other prosepectives...

BTW I have account for Tax etc etc but not pension....

Also I 'm assuming i'll get at least a 10% bonus in the permie role, through I know it's not guarenteed....

thanks again

[angusglover]

Flip a coin. You really dont expect some misfits on the internet to give you an answer do you?

Misfit???? I will have you know I resemble that remark!!!!!

[BrilloPad]

In many ways you are better off contract in IB - banks will take the p155 if permie.

Remember that working in an IB is not that bad - its the commuting thats the killer.

Having said all that I am thinking of going permie after 19 years contract - cos I need to survive the next recession.

[christhedon]

oh for the money comparison thing you also may want to take into account tax...

[christhedon]

Welcome to the board Biggie. Firstly, I have to say that sockpuppet has a point. Not that I think that people here are misfits, more that you have to take huge pinch of salt with what some people say and less with others and that in itself is another decision you need to make about the answers you get on the board.

I found that I posted a lot of supposedly 'stupid' questions and I've managed to do things that people on the board said wasn't likely, even though I may have been dejected at the time by some of the comments. I found that more with this board than any other board I've been on. At the same time I've got some very useful information here as well. Its just a learning process I guess.

Anyway heres my thoughts on your situation based on your structure and unfortunately you'll get more questions than answers:

What business area do you work in now?

1) Take home pay: Question: Have you included pension and benefits in the calculation? Why don't you ask the employer what the typical bonus is in their area? Why don't you ask if you can get a guaranteed bonus? A 25% bonus in a front office IT (presumably you'll be FO?) area is nothing special. So the permanent job may likely pay more than the contract one.

2/3) Job security and career progression: You can get sacked whether you are permanent or contract so I wouldn't just think about it in the 1 year terms. (By the way 1 year contract is quite long in my opinion). On the other hand I believe its harder to sack a permanent employee than a contractor. However, do you honestly think that you will get sacked for any reason?

You don't say what business area the small investment bank is in? If they were vague why don't you go back to them and ask them whatever you want to know (within reason)? Career wise in a small place you have more chance to shine because there is less competition at the same time you mentioned you don't really want to rise to the top.

With regard to learning the business what exactly is the Credit role? How do you know you are going to learn the business in it? When you say you want to learn the business what do you mean? Products or business processes or how to trade? How do you know the role will satisfy any of those requirements?

Hours wise I think you have to work whatever hours necessary to get the work done. If it seems unreasonable then you can get your hours changed or leave. You're quite lucky to get paid by the hour in the contract, most I've seen in my very limited experience are daily contracts. Also, in contracting you still need to get involved in politics to a certain extent e.g. as in most big environments you don't do everything and you need to ask others to do things.

For me it seems like a lot of unanswered questions, which either you haven't got the answer to or didn't write about in your question. Take what I say with a big pinch of salt especially getting back to the prospective employers with questions which could be very sensitive as I don't know your situation fully. Write back if you think thats helpful or need any other input.

I hope that helped in some small way.

Cheers and good luck,

Chris