Over the past 18 months, financial services firms have faced persistent headwinds. Since late 2022, the market has been marked by caution and consolidation. The collapse of Silicon Valley Bank has cast a long shadow over venture and growth equity, tariffs have introduced friction for firms with US exposure, and in the UK, political uncertainty, including multiple elections, has impacted sentiment and slowed hiring decisions. In this environment, resourcing strategies have come under closer scrutiny, and the question of when to hire a contractor versus a permanent employee has become increasingly relevant.

As one of the UK’s specialist financial services interim recruiters, we’re often asked when a contractor makes more sense than a permanent hire. The answer depends on timing, risk, and the strategic goals of the business. Interim solutions provide flexibility, speed, and often bring in highly experienced professionals who are comfortable stepping into complex or transitional roles. For firms managing regulatory change, launching new initiatives, or simply needing to steady the ship during a period of uncertainty, contractors can offer immediate impact without long-term commitment.

This is particularly true in regulated environments. Where an SMF holder exits unexpectedly, or where a key function has been left under-resourced, contractors can be a critical bridge. Regulatory risk does not wait for the right CV to arrive. Experienced interim professionals can step in quickly, hold regulated responsibilities where appropriate, and provide assurance to boards, regulators, and investors. In asset management, wealth, insurance, and banking, this kind of stability can be invaluable.

Contractor recruitment also makes sense when the business case for a role is still emerging. Firms navigating cost constraints may not be in a position to add permanent headcount, but still need specific expertise. This is common in areas such as compliance, transformation, finance, and risk. A senior interim can lead a project, guide strategy, or provide coaching to the internal team without triggering permanent cost obligations.

That said, there are still compelling reasons to hire permanently—especially in core commercial or leadership roles. Permanent employees provide long-term continuity, help embed culture, and support succession planning. In functions where institutional knowledge, client relationships, or cultural alignment are critical, permanent hires bring lasting value. They also allow firms to invest in development and progression, which many candidates continue to prioritise even in a cautious market.

There is also a cost consideration. While contractors often appear more expensive on a day-rate basis, they are generally not enrolled in benefits or long-term incentive schemes. For short-term needs or project work, the overall cost may be lower than hiring someone permanently who will be underutilised. However, where the work is ongoing and business-critical, building a permanent team is usually more efficient.

For financial services firms, the key is to assess the nature of the need. Is the challenge short-term or structural? Does the business require knowledge transfer, delivery, or transformation? Is the regulatory risk time-sensitive? Is there an internal candidate who could step up with the right support? These are the kinds of questions that shape the right resourcing model.

At Fram Search, we support clients across asset management, private markets, banking, wealth management, and specialist lending with both interim and permanent hiring. As a trusted financial services contractor recruitment agency, we help firms source experienced professionals quickly, efficiently, and with an understanding of the regulatory and commercial context. Our interim recruiters work closely with clients to assess risk, define requirements, and manage the process from start to finish.

We also recognise that the line between interim and permanent is not always clear. Many of our clients begin with a short-term need and decide to convert that individual into a longer-term hire. Others use contractors to cover gaps while they search for the right permanent candidate. In a market where agility is increasingly important, the ability to flex resourcing plans while still maintaining control is a significant competitive advantage.

In uncertain times, the strongest firms are those that can move quickly without compromising on quality. Interim professionals give firms that capability. Permanent hires give them roots. Knowing when to use each model is part of building a workforce that can not only adapt—but lead.