IBM slices UK GTS contractor rates

IT contractors working for IBM Global Technology Services (GTS) in the UK are being hit with a 10 per cent rate cut from this week. A Reg reader said that IT bods were being told that they had to accept the rate reduction from this weekend. Recruitment firm Hays confirmed that contractors were getting their pay chopped, but …

[Anonymous Coward]

Am I missing something?

"According to IT Jobs Watch, IT contractors at IBM GTS in the UK make an average daily rate of £425 and an average hourly rate of £24.95"

Does this add up? It would appear that for these numbers to be consistent with each other, IBM contractors must be working for 17 hours a day.

I know that IBM contractors are screwed over with poor contract conditions, but that would really be unreasonable.

[JDX]

Re: Am I missing something?

I thought the same but assume they simply report the data they are given, and people hired on an hourly rate are paid less for different roles.

[Alan_Peery]

Re: Am I missing something?

You're assuming that the groups being referred to are the same groups. Imagine the daily and hourly groups as distinct sets, and it makes sense.

And you'd clearly want to be on a daily rate...

[Anonymous Coward]

Re: Am I missing something?

Daily rates are people in IT security, network design and admin, etc which command an above average pay rate.

Hourly rates are people like you Joe Average outsourced IT admin who deals with your laptop when it is b0rken.

It is not surprising that they differ by a factor of 2 times or more.

[Anonymous Coward]

Re: Am I missing something?

£425 a day is not "above average" for an IT Security professional.

[Anonymous Coward]

Ireland as well...

[Anonymous Coward]

Do agencies ever cut their rates as well?

Not likely!

[Ian Michael Gumby]

Re: Do agencies ever cut their rates as well?

Agencies?

Which rates? What they pay their subcontractors? No, they are negotiated short term or are on a W2 basis.

(I'm a yank so I'm using Yank terms... sorry)

Rates they charge? Yes, they charge what markets will bare and then get beat up when the rates go down on their next contracted SOW.

IBM?

IBM is getting hammered by their customers. *SHOCKING*. This happens when you start to compete on price and not value.

IBM gets less so they are now forced to squeeze the sub contractors who do all of the actual work.

Pretty soon, the subs will walk.

[Pete 2]

1st rule of contracting

> contractors were getting their pay chopped

Rates go down - coffee consumption goes up.

IBM's bean counters may *think* they're saving money, but the reduction in pay WILL be compensated for in other ways.

[Anonymous Coward]

Re: 1st rule of contracting

Except that you have to pay for everything in IBM - no freebie drinks here.

[Pete 2]

Re: 1st rule of contracting

Indeed (having served my time with IBM). However on £425 a day the most expensive part of a cup of IBM coffee is the cost of the time it takes to walk to the machine (or cafeteria) and back again.

I did once suggest to my IBM boss that it would save them money if they employed a "waiter" to serve coffee to the "subbies" at their desks, rather than having the contractors fetch it themselves. Surprisingly, this was not well received!

[FutureShock999]

Re: 1st rule of contracting

That is because that IBM (et al) take the time that you walk to the coffee machine as part of their "Health and Safety" mandated screen-breaks, to promote better circulation and avoid RSI and blood clots in the legs. If they couldn't count your voluntary breaks, then they would be forced to mandate a proscribed set of stretching and walking excercises which they would then have to monitor for adherence. In short, you are doing their Health and Safety work for them by fetching your own coffee...and probably saving them more money. ;-)

[Anonymous Coward]

Re: 1st rule of contracting

Yeah, those trips to the coffee machine (or cafeteria) and back again were getting people valuable exercise! Why should waiters get all the exercise?

[Matt Bryant]

Re: Re: 1st rule of contracting

"......the most expensive part of a cup of IBM coffee is the cost of the time it takes to walk to the machine....." First rule of managing contractors - get sh*t coffee in for free (e.g., Clic vendor machines) and charge for the nice stuff or sell it out to a franchise (reception Starbucks, Costa, etc.). People visiting will only see/drink the franchise coffee and think what a nice place to work you company is. Your long-term contractors/prisoners will know THE TRUTH, i.e. that they take less coffee breaks (which costs the company less money on cheap vending machine coffee) and spend more time at their desks (pushes up productivity).

[Anonymous Coward]

Re: 1st rule of contracting

Such logic has crossed my mind before, but seems lost on those actually managing IT folk.

I did have the dubious pleasure once of working on the IT systems of an IT recruiter, if you have worked in London then you have probably heard of these people.

Given their sales background, there was much more focus on how these guys do their work - where they can save time so they can make more calls.

As a result getting a coffee was never far away (5 to 10 steps) and supplied by an urn of constantly hot water (no waiting for the kettle when you can be on the phone !).

I was actually impressed by these people who'd i'd always seen with a certain distain before.

[Ian Michael Gumby]

Re: 1st rule of contracting

First rule of contracting... Never trust the company that you are subbing through.

Second rule of contracting... Learn to live off a smaller percentage of your wages. Its usually either feast or famine.

Third rule of contracting... Learn how to get in to the daily rate game. Then understand, you're going to be the first to be man ... err... 'asked' to stay late and arrive early.

Fourth rule of contracting... when working for IBM, don't drink the cool-aid.

[tin 2]

Ohhh yes. What Pete 2 said.

[Anonymous Coward]

I know.... Where I work, we have to sort our rubbish into recylcing bins at the end of our row of desks rather than putting it into a bin next to us. I often wonder how much productivitilty is wasted by us having to get up, walk to the bin, decide which bin to throw which bit of rubbish into. We must be the highest paid rubbish sorters in the world!

:-)

[Anonymous Coward]

End of the row of desks, you're lucky!

We have to carry it to a lobby at the end of the office, and sort it there!

And inevitably, whenever I clear the desk at the end of the day, the cleaners are trying to empty the recycling bins already, so my organic waste has 24 hours to fester before it actually leaves the office.

[Anonymous Coward]

Netherlands too..

Here it was a 20% take-it-or-walk rate. Unsurprisingly, none took it. So far a few have had to walk.

Irony is subcos' are, by and large 100% billable - a trick to, you know, get the contract renewed and avoid early termination

So all the sludge that's on the permie payroll (no, not all, by any means) who are dragged over with every outsourcing deal, get to sit around doing sweet FA (the contractors have an interest in staying - they'll do it!) drinking the expensive shyte coffee

should be an interesting time for the account execs if procurement get their way.

[ScottME]

I'm sure the whole point of this is to allow IBM to reduce the rate it charges its customers for services, thus making it more competitive and allowing it to sign some new contracts for a change.

[Matt Bryant]

Re: ScottME

"I'm sure the whole point of this is to allow IBM to push up the earnings per share wihtout having to buy back even more shares." There, fixed it for you.

[Anonymous Coward]

Reduce rates?

"I'm sure the whole point of this is to allow IBM to reduce the rate it charges its customers for services, thus making it more competitive and allowing it to sign some new contracts for a change."

I would be willing (if I wasnt an Anon Coward) to make a big bet that this isnt the case.

[David Eddleman]

Ding-dong...

As a former member of IBM GTS in the US, we saw this all the time. Now that they're employing the same methods overseas in the legal manners they can...yep, squeezing as many pennies out of the non-BRIC(A) countries while shifting more or the work there.

And slowly, Big Blue begins its decent...

[Matt Bryant]

Ah, it's all so unfair, right?

Remember the good times of the Y2K fuss? Endless overtime, lots of bonuses to stop you disappearing off to another company even more panicked than your own. Shortened purchase cycles with reduced oversight as you really did have an unmoveable deadline. Recruiters just throwing money at the problem. Ah, good times, good times. Of course, it wasn't all good for everyone, but you didn't hear any of us IT bods - IBM-employed ones or otherwise - moaning. But now the pendulum has swung and the good times have disappeared along with the bonuses

Last week a friend of mine bought a new 991 version of the iconic Porsche 911 Carrera. For him, it's boom time, he's making money hand-over-fist! He's particularly happy that he can give all his staff an extra bonus for Christmas. But then he owns a credit recovery agency and is one of those guys that closes down business and sells off the assets to recover money for the companies they owed money to. For him a recession is just good business. But he knows the pendulum will swing back some day and so he's making hay now whilst the sun isn't shining for the rest of us, and when it does swing back he'll not be giving out bonuses to his employees. Will anyone be moaning about the poor state of debt recovery agent pay then? I doubt it.