Recruitment experts report that back office and support functions such as accounting, IT, finance, and operations are increasingly hiring more full-time, salaried employees than contractors or temporary workers. Moreover, there is a growing trend of converting existing contractors into permanent staff.

In the aftermath of the financial collapse, banks, as publicly traded companies, were concerned about pay and shareholder reactions. It made economic sense for them to hire new back office employees as contractors since this didn't impact the compensation pool or increase headcount numbers.

Additionally, there were advantages to not committing to full-time employees during economically uncertain times. Contractors typically do not receive benefits, and companies can terminate them at any time. Even private equity firms and hedge funds began embracing the contractor model.

While many employees didn't favor this practice, some had little choice in recent years. As Wall Street has regained stability, firms have felt more confident about increasing headcounts in the back office. The circumstances forced their hands.

Anne Crowley, managing director at Jay Gaines & Co., noted that hiring in the financial services sector has picked up, resulting in hiring managers facing competition for quality candidates. This situation has yet to be witnessed for several years.

Moreover, recent incidents involving reporting and IT errors at institutions like Citi and J.P. Morgan have made banks less comfortable with non-full-time employees handling crucial responsibilities, as explained by an anonymous recruiter.

Peter Laughter, CEO of search firm Wall Street Services, confirmed that many of their consultants in operational roles are transitioning to permanent positions with clients. However, he was skeptical about a dramatic shift in the hiring landscape.

However, it's worth noting that the area where contractors and consultants are still in high demand is compliance, mainly due to a shortage of qualified candidates. Some banks, like J.P. Morgan, even pay compliance consultants over $100 per hour.

Additionally, there's a sentiment within the industry that compliance spending is somewhat reactionary and will likely stabilize. HSBC Chairman Douglas Flint suggested that banks were initially underprepared and under-spending on compliance but are now playing catch-up. Eventually, the industry is expected to find a middle ground. Hence, making the most of the current opportunities is advisable for those in compliance.