Australian financial institutions are increasingly opting to employ fixed-term staff as a way of filling project-based roles without paying expensive hourly rates to agency temps.

And in a tight hiring market, candidates are snapping up these jobs, which put them on the payroll as salaried employees for between about three and 12 months.

“Fixed-term contracts have always been around, but now they are more common and are being used for a wider variety of roles,” says Anna Whiteside, principal, Derwent Executive. By contrast, using temporary contractors, paid by the hour or day, is becoming a less common option.

Risk, compliance, audit, business analyst and project management roles are amongst the most popular recently for fixed-term contracts across the financial services sector, adds Whiteside.

The Westpac/St George merger, and to a lesser extent CBA/Bankwest, are generating short to medium-term integration-focused jobs for project managers, management consultants and business analysts.

There has also been a big jump in fixed-term assignments for senior IT specialists working on essential upgrading and integration projects at Australian banks, according to Duncan Amos, divisional director of technology at Bluefin Resources. IT generalists are in turn needed to backfill the newly vacant roles of employees seconded to projects.

“For a lot of these jobs, banks ideally want ex-employees to return to them because they have a good understanding of the business and its IT systems,” says Amos.

Fixed-termers are more economical to employ than permanent staff. They don’t receive redundancy payments when they are let go, and firms save on external recruitment costs, if they choose to offer long-term employment.

And because fixed-term employees receive pro rata annual salaries, they are also cheaper than agency temps, whose hourly or daily rates can work out about 30 per cent more expensive over the same period.

Whiteside says employing someone for a set period can also make them more loyal to the project than if they were working hour by hour.

So far, so good for the banks, but are there any benefits for employees? For a start, the likelihood of being let go during the fixed-term is low. And if you do a good job, you stand a good chance of being hired when the contract is over.

While you might get better money on an hourly rate, most fixed-term contracts offer employee benefits such as holiday pay. “And, more importantly, in the current market, candidates are more than happy to consider fixed-term work because it locks in security for several months and potentially means they can ride out some of the financial crisis,” says Whiteside.