In the wake of hasty pay cuts announced at Bank of America Merrill Lynch for contractor staff, one recruiter of contract staff to banks tells Recruiter that banks and City organisations have learnt that they must treat such staff better.

Rob Booth, managing director (contract staff) at IT recruitment firm Genesis, tells Recruiter that staff treated badly will be quick to go elsewhere when they can, saying “As soon as the market changes, if you handle it badly, you lose out and you’ve got a problem because there is a lack of talent… each of these businesses has learnt their lessons from the past.”

Booth believes there has been an increase in “professionalism” among such firms, saying: “What would typically happen if you go back to 12 years ago - after the dotcom boom, in the recession - you’d get an email saying ’8% cut, accept it or turn it down today or you’re out’.”

Merrill Lynch advised its temporary and contractor staff on Friday that their rates of pay would be cut by 10%, with staff allowed four days in which to choose whether to accept the new terms or lose work, as reported by hereisthecity.com, reports which were verified by Recruiter.

Booth says: “There are some organisations that do blanket cuts - but that is not happening so much any more. What we’ve seen them do is limit the number of days they can work and enforce compulsory leave.”

He adds: “In technology it’s going to be more difficult to cut any more because you’ve already got outsourcing and offshored services.”