BT slammed for 'importing' cheap Indian contractors BT has been accused of laying off expensive UK contractors and replacing them with Indian staff. Workers brought in using intra-company transfers are replacing contractors for about half the price, a contractor told BBC Radio 4. According to a contractor working for BT Global Services on the National Programme for IT - the …
They sell the projects as "Offshore" with their related cost savings, fail to deliver because they can't manage people sitting around a table, never mind on another continent, then pull the developers in so they can flog them senseless locally till the project's delivered.
They just have to remember to send them back before their visa's expire / get complicated...
.... you take your choice. Wait and see. We've all seen it beofre in all walks of life.... you see a car for £20,000 then one for £10,000 - its always going to be a flase economy for opt for the cheaper.
Sort term = cheaper,
Mid term = more expensive
Long term = you buy the 20k one
Paris??? She knows
I'm glad the mainstream media have now picked up on this. The statement "...anyone brought in from India was a specialist..." is absolute tosh. I spent a year having to train several people to take over what my team did, and they were still rubbish when I finished.
I left in disgust in the end, since they were only interested in cutting costs and not the quality of what was done.
Its a completely blatant policy from BT and I'm amazed they keep getting away with it. Rates for Indian contractors crept up over time anyway and were not that far off UK rates by the end.
UK government could easily stop this but don't give a crap.
Err.. isn't pretty much EVERY large company replacing their staff with cheap foreign replacements and have been for some time??
I should know I'm out my job shortly for exactly that reason, replaced by much cheaper Indian workers.
Surely its about time the UK government wised up to this and brought in a law prohibiting companies in the UK from replacing UK staff with foreign workers?? If they tried to replace you with another cheaper Brit thats against the law so why not legislate against them using foreign staff for the same purpose??
Not exactly sure how they could legislate it but there must be SOMETHING they can do to stop this constant shedding of UK jobs and if nothing else a morale obligation to at least attempt it??
They are doing it where I work as well. 'Off-Shore' to india. Fail to deliver, bring Indian's on-shore and flog them senseless to deliver a lower quality of work. To be fair, they are not as good because they all studying management and get promoted within 18 months which means that only the dumb or inexperienced programmers are left.
As for the permies whinging about £400 a day. We get that so when the time comes we can get sacked so you don't need to be. If you don't like it, leave your nice paid holidays and funded pension and become contractors. No? didn't think so.
I heard this on radio 4 yesterday lunchtime and was amazed to learn that Indian staff that have been given Inter-Company Transfer Visas are "not allowed to replace" an UK worker, permanent or contractor. They are also supposed to be short term visas (i.e. months rather than years)
Anyone working in IT will have first hand experience of Indian staff being brought into the UK on inter-company transfers to 'lower costs' - a practice that all this time has been illegal.
The chap from the home office said they were looking at the practice and "producing a report" by the end of the month on the matter. So, hopefully some action is being taken place,
Dont forget, the nature of being a contractor means you will not always be employed for long stretches especially right now.
£400 a day sounds a lot, but if the contract is only 2 months long it becomes a lot less. In todays climate, contracting rates are crap (well at least in Scotland they are).
No because BT or rather techmahindra were subsidising their contractors Rent in Leeds. Most contractors on the NHS leeds based contract commuted daily from as far as Liverpool and Leicester with others renting accomodation in the week if further afield. Those costs warranted the £400/day rates when flats cost £700 per month plus bills, there has to be some incentive to pull in highly skilled UK contractors. The Tech Mahadrinda contractors were largely clueless on this project and the situation became very strained at times, especially when we had to train these guys whilst knowing we were on our way out. No wonder Global services are in the mess they are in. Its self inflicted via self inflicted "cost control". You get what you pay for and nobody on that contract really cares anymore.
In reply to this, as well as the other comment about 8 grand a month (nice to see you people all standing up for yourselves as AC, by the way) – one of the reasons contractors negotiate the higher price compared to permies is that companies like BT can get rid of us quickly and cleanly with dubious methods such as bringing in cheap foreign labour. The contracts can be cut or just left to lapse and the contractor leaves, unlike permies who would get redundancy pay, pension contributions, retraining, and possibly go to tribunal to try and extort even more money out of the company. Knowing that we don’t charge the client these extras, you can’t reasonably expect us to do the same work without some perk like more dosh.
In the months to come, UK will default (already on credit watch outlook negative). When this happens, the sterling will be fungible with used toilet paper. Forget Indian contractors: BT (and others) won't be able to afford contractors from any country, even the UK.
Mine's the one with the diamonds and gun.
"no wonder BT lost so much money. Contracters - get a grip on reality, you really are not worth that much. Regardless of your skill set."
I have no way of knowing why BT lose so much money. Rather than assuming that it is because their UK contractors are overpaid, I could assume instead that they have too many useless, and hence overpaid, permies.
Also, you assume the Indian contractors can do what the UK ones can. Again, I have no way of knowing that. Perhaps we should wait and see.
As for not being worth the money, my own experience suggests otherwise (although I've never worked for BT). Your own situation may well be different, of course.
currently Indian wages are rising 10-12% a year. UK wages are rising by about 2-3%.
Indian developers earn around 10% of they're equivalent UK developer salary. Within around 20 years the wage gap will be reduced to 2/3, in 25 years it'll be equal.
It'll be interesting to see what industry we have left by then though!
actually i am finding alot more companies are dropping indian call centers because of the amount of hate they get for having offshore centers
I have thought about dropping bt because of their call centers but then again nobody else will give as reliable a service.
Might just cough up the extra few quid and get a business line
Sounds like a lot doesn't it? Until you figure out that it has to cover both employer and employee national insurance, holiday pay, pension, sick days, accountant's fees, training, travel and any gaps between contracts. It can work out as less than permanent work, and without the job security.
Really old news.
Most organisations which use this kind of labour tend to trim them periodically, but they grow like yeast. You turn around once and there are 16 people where yesterdays used to be one.
However, let's be blunt it is mostly the UK contractor's fault. The level of thumb twiddling and work avoidance manifested by the UK contractors and especially the software ones in large companies is often beyond staggering. I know plenty of companies where it is the norm to see 5+ people taking 6 months for what can be done in a couple of days by a university graduate. Not surprising as they know that Indians are not going to deliver and will soon grow in numbers to the point where they are hire-able again so there is no need to overstrain.
'BT told the programme that it was looking to cut its dependence on expensive contractors'
A 'dependence' they created by getting rid of permy staff.....
Debate about how much contractors are 'worth' aside, they are convenient to companies because they can basically punt them whenever they like with no employment law complications.
Actually contractors are worth 8 grand a month. And so are many permanent staff.
£400 a day is a decent rate for an IT contractor. A permie with a similar skill level would probably earn around £40Kpa, possibly more. Given 5 weeks paid holiday (that's 10% of the working year, remember - worth about £4K), sick pay (assume another week or two), decent company pension contributions and employer national insurance payments (at 13% that costs the employer over £5K for this example), plus all the other perks, bonuses and other direct and indirect costs , the actual expense to the employer is much more than £40K. My manager at a FTSE100 company I recently worked at said the cost to an employer is, as a crude calculation, double the salary paid to the employee. £80K is £6.5K per month.
Contractors are still more expensive, yes, but for the extra £1.5K per month the company gets flexibility in their workforce and the benefit of no commitment to the individual, as BT are demonstrating here. The contractors get to trouser a big chunk of what would normally be the employer's employment expenses themselves, and if they chose not to take a holiday or work through sickness to ensure they take the money, that's their business.
I do love it when people yelp as popular politics hits there where it hurts; in their pocket. I just find it utterly astounding that it takes financial discomfort before anyone actually *looks* at the situation.
What you are struggling with here, people, is the fundamentals of an idea called 'capitalism' or 'the free market' - if someone can provide labour/goods/resources more cheaply, we should use them, so goes the theory, because doing so drives prices down, stablises economies and makes everyone wealthier and "greed, for want of a better word, is good".
This is exactly what happened to the miners in the eighties - it's not that there wasn't coal left to mine in Wales and the North of England, it was that it was cheaper to buy it in France and ship it over, because the EEC poured money into subsidising their industry to make it more 'cost-effective'.
Free Market, Low Inflation, open competition, cost-effectiveness, stable economics: These are the power-phrases of Capitalism, and are held up as being 'moral, right and true'.
But look - they don't say ONE THING about the people who labour under the system. Capitalism cares about Capital, hence the name. It has no care for people, or society; it doesn't matter if person X or social group Y suffer, so long as the market improves, the prices stabilise, profit made and loss avoided. If you want to care about people and society, you need something other than capitalism, you need SOCIALism and that is evil! Evil, they tell you!
But wait, lets take a look at a balance; lets nose at the alternative...
Ok, so the capitalism is causing us pain, lets go ahead and adopt Social poilicies, ones that protect workers and wages at the expense of free trade and open markets, preventing migrant workers from travelling and legislating to prevent companies offering cheaper labour from overseas (or even locally!) - As many of you have said "Surely, the government can protect our jobs?!"
Yes, they can, but doing so is called 'protectionism' and is something we've all moaned to the EU about for years! Protectionism is no silver bullet, especially in times of a recession. Do you realise what happened the last time protectionism was employed during a recession? It was a little something called The Great Depression....
All in all, I would say, be careful what you wish for. You might just get it.
Yep, I worked for Standard Chartered Bank, where they let permies and contractors go in the UK to bring cheaper IT staff over from their Chennai office. Sometimes on "rolling or rotating six month assignments". Works out cheaper and all perfectly legal under current UK immigration laws. Lots of comapnies do it.
Expect no action from the government. Its all part of globalisation. Just wish my local authority would do the same and thus reduce my council tax bills. If on-site off-shoring is good for the private sector it should be good for the public.
No permie vs contractor bias here....contractoers have to live with this - that's why they are paid more than permies - so they can absorb this sort of action. BT or any other can get rid of contractors and replace as they want - that's why they are called contractors and were engaged as such. If contractors are whinging/upset about it - go permie.
When it becomes BAD is when the permie staff are being replaced by offshore workers - as I was (sort of - at least I was paid off). Morally indefensible, but companies find a way to make it legal. The people who replace are generally non-specialists (I know because I was one of the few specialists in my particular area) , are not particularly high flying in the quality/brains department, and there is always a language barrier (but that improves over time). You may be able to throw more of them at the project because they are cheaper, but that doesnt mean it gets done any quicker.
So in precis - contractors, fair cop, permies, bad news.
The staff spoken English that was heavily accented. Nodded politeley when you asked them if they understood you and then proceeded to get it wrong/not do it. Many of these are still friends but I would not employ them. The delays and errors caused by the diferent attitudes and language barrier easily cost more than any money saved. Because of these the stress levels were through the roof - which is why I chose to quit the contract. It really wasn't worth any amount of money and i'm good at handling stress. Sadly its Techmahindra Stereo typing but no smoke without fire i'm afraid, ask any contractor thats left BT.
When I left BT ..... ooo some..... 3 years ago(ish) this practice was already well in place.
Good luck on your short sighted views BT, its cost you far more than you think you've saved but im sure you know what your doing right......?
It's a project paid by UK taxpayers
The Indians if they work less than 6 months pay their taxes in India at the lower indian rate of about 30%. I bet their company takes most of the fee anyway, so the big saving in the rate is the UK tax.
So UK person earns 400GBP, pays 45% total tax + social tax = 220GBP.
Whereas indian earns 220GBP pays no tax and UK social, and company exports most of their fee to India.
Best of all, some of the huge tax goes to pay for the BT project which goes to replacing their job with Indian ones.
First, just because you see 400 vs 220 doesn't mean that the individual contractor sees the 400 or that the internal transfer sees the 220. The numbers reflect the cost per day of the worker and its not only the salary that goes in to the cost.
The point you should be taking away from this is that BT is using a loophole in the law to replace the *local* contracting force with their internal transfers because they are a global corporation.
As pointed out, these internal transfers do not have 'expertise' that could not be found locally.
As also pointed out, this not only a BT thing. In the IT world all of the major companies do this as a way to keep fat margins on declining bids.
Who loses? The consumer because the quality of the software is shite. The Indian worker because even though they are brought in to the UK, they still earn their current salary plus maybe a small stipend and their UK housing paid for. (Part of the reason you see $220 a day.)
As pointed out by Callum, its a short term work visa. So you rotate the staff.
Here's the net result. BT saves money until they are caught. Then they say mea culpa, pay a fine and do it again until caught. BT can also start an appeal process by claiming that they have the talent within their global workforce but not locally within their workforce so that instead of bringing in outside contractors they sourced internally first.
The bottom line, there are no longer any ethics in business. If you stipulate in a contract that the work has to be done locally and no off shoring, the contracting companies will find a way to get around that. If you limit the temporary work visa to only those who have specific skills that are not found locally, they will find a way to make it so that the workforce has some specific skill.
The true and not recognized issue is that if you choose the more skilled and qualified resources that may cost more dollar per hour, your overall cost will decline because you can do more with less workers and the final quality would be up to snuff.
The blue headed boffin guy because while what I've written is common sense and common business knowledge, it appears that a lot of people in charge have the intelligence of Monty Python's Gumby characters. (Gee I wonder why I use the alias of Ian Michael (I.M.) Gumby!
BT have been doing this for years .... as a cursory view of the martlesham bus stop will prove.
This made me laugh though.
"As for the permies whinging about £400 a day. We get that so when the time comes we can get sacked so you don't need to be. If you don't like it, leave your nice paid holidays and funded pension and become contractors. No? didn't think so."
As for the contractors whinging about being undercut. You get 400 quid a day, so when the time comes you can get sacked and swapped out with the cheapest alternative labour when the employer feels like it. If you don't like it, sacrifice a bit of your freedom and become a permie or take a pay cut.
this freedom thing is a bitch when it works against you aint it ?
Funny though - I was working with a firm who were less than happy with their offshoring arrangement. We looked into things and found the indian subcontracting company had offshored the offshored work to a country even further down the economic food chain.
Experienced this before. Not with replacements, but on-site Indian offshorers brought in to meet the demands of tight timescales, flagging project, and all at a cheap price.
Suffice to say it was a disaster. Usual problem of management expectations and assumptions that they think they can just bring in cheap foreign developers and dump them in the project to make everything work. Combined with the serious lack of experience these guys had. Sure they all had top Indian University degrees which are supposedly regarded well, but they barely understood basic concepts of software engineering and programming. They had experience more like a bunch of typical dixons sales managers who've cross-trained to IT by trying to learn kiddy languages like VB.
They'd also just try and do exactly what you told them, to the letter (so you have to spell everything out), without understanding what you've asked of them, and then promptly do it wrong.
The amount of hand holding and training consumed the existing developers time and troubleshooters had to be brought in until the whole thing was canned.
There are plenty of decent IT workers in the UK of all kinds of nationality who have the knowledge, experience and understanding. The problem with offshorers is they are run by companies who just round up lots of fresh graduates and farm them out as if they are expert contractors.
But in response to AA Posted Thursday 4th June 2009 10:24 -- I don't regard eight thousand a month too high for a lot of people.
As for the £200 per day figure: I know garage mechanics who earn a lot more than that. I was earning £250-300 a day FIFTEEN YEARS AGO and I am amazed that contractor rates are as low as they are in some areas.
Not low enough: they're getting rid of us for Indian guys on a fraction of that. It'll all end in tears.
"get a grip on reality, you really are not worth that much. Regardless of your skill set."
Unlike our MP's who trouser similar amounts with all their little extras.
And why shouldn't skilled workers that are good at what they do be able to earn good money?
After all, bankers and peeps in the financial sector have been trousering insane amounts for what appears to have been piss poor skill levels.
Just because you get shit wages doesn't mean everyone else should.
especially IT, and all those cost savings are neatly lost by a couple of things that management don't seem capable of factoring in. In case you haven't guessed, my own personal experiences of offshoring work (especially with onshore, offhoring) have made me wonder how anyone can maintain even the semblance of it having a commercial benefit.
1) the language barrier, harsh but true. you can't expect someone who's first language isn't english, to take a carefully worded set of requirements written in english and produce something, also in english. if they don't actually speak it. While most can get by, all the indians i have worked with have mangled the grammar, which is an issue in a carefully worded, unambiguous requirements document. Strong accents are also an issue, if you have to repeat everything several times it takes up valuable time.
2) the time difference, anyone who's worked with offshore teams knows that, due to the time difference you never get an answer to a query until the next day, which can drag out what should be a 10min email session (has to be email for the audit trail) into a week of hell.
3) cultural differences, just because you are using the same words, in the same language, doensn't necessarily mean it is understood as the same thing. After explaining something at length, and asking, are you ok with that, you will get the answer yes or OK whether it was understood or not.
4) Housing and travel, if you're actuallly inporting someone to work here, you have to pay to get theme here and put them up, but that probably comes out of a different budget.
5) quality! Most of the time you dont; interview indian staff, they are shipped over as a commodity, if the person you get happens to be useless, what do you do? you've already paid for a flight and setup some accomodation. You can either train them or wait another few months to get someone else, who could be just as bad.
6) handholding, it doesn't matter if you get several cheap contractors, they invariably need handholding by your more experienced staff, taking them away from the work they actually should be doing.
And most importantly, it doesn't matter if staff cost half as much, if it takes three times as many people to actually get anything done. The only way i can see offshoring working, from my own experience, is scale, generally the indian companies can throw an indefinate number of bodies at a problem (a gang bang, in tech terminology). solving it by sheer attrition.
"no wonder BT lost so much money. Contracters - get a grip on reality, you really are not worth that much. Regardless of your skill set."
I'm sick of green eyed monsters knocking contractors rates, it says much for the basic mindset of humanity that instead of thinking "hell yeah , good on him/her , another guy in the rat race like me but making it work better , now how do I get me some of that action" , instead wanting them to get paid less , like you.
People should just stop moaning about contractors rates , especially fellow workers. You are envious of it? Take the step , form your own company , choose to live without the security of steady work and do it ! :) ( As long as you have long years of experience and skills for people to want to hire you that is)
Hard-working Indian immigrants pass much-needed money to their families, improving the standard of life back in India.
How is this a bad thing? Demanding wealth stays within our little first-world circle is what causes poverty. Redistribution of wealth and equality across the world is the only way forward.
Face it - to improve everybody's standard of living, we might have to give up a few luxuries. Above-average pay may be one of them.
The thumb twiddling is often caused by the bottleknecks in the organisation decision making processes, its the fact their contractors that focuses peoples minds. The fact that when i was a permie at two different IT Services companies (all with with a different shade of blue in the logo) 25% of the year was spent pursing "non core" activites whilst waiting for the Account SMT or Customer SMT to make a desicion or approve X or Y. A contributing factor to going contracting, as previously when i worked in the manufacturing sector contractors were worked like dogs (and, nothing wrong with that - makes the day go quickly!)
As for the grads being better than contractors!? maybe in certain sectors but for for most IT services companies its an exception that the rule, they all come along having done a 6 week module in x or y and think they should reegineer the world.
I've had considerable experience recently dealing with Inidan replacements for UK contractors. As a contractor myself, whose role was outsourced, I can say that there's plenty of dissatisfaction with the outsourcing process, from those left behind to deal with it. Loads of problems when it comes to Analysis \ development roles especially.
The Outsourced people find it difficult to think out of the box, the standard of the work is extremely variable - usually well below that of the UK people they're replacing, communication is often a challenge and it's a bugger to get rid of them if they're no good. Plus, it's not the same working with,let alone managing, people several thousand miles away.
Not to mention the irony that a lot of this outsourcing is justified because of the recession. Yet by using foreign workers in their own country, they are actually adding to that same recession by sucking money abroad and making employees redundant here. How stupid and short sighted can you get?
I once estimated that a onshored offshore resource of my career level (you've got to love corporate-speak!) was getting a per diem allowance roughly equally to my take-home pay after accomodation and bills, plus his "home" salary was still being fed into his Indian bank.
There's the problem. They can give essentially the same wage to the worker, but it'll cost them half as much because there's no income tax, NI, etc etc etc.
It would not be protectionist for companies to face a tax hit to cover this for non-EU staff, it would level the playing field.
I agree with some of your comments regarding capitalism. We are all part of the alleged free market economy but the balance of scales weighs hard on the UK workforce. Its very apparent that the goalposts have silently moved and laws are getting broken and the system is highly abused. like it or not when people do lose their jobs and the pockets are hit you suddenly become a part of a very dark grim reality that we are not anybodies primary concern. True that is capitalism to a certain extent but laws are laws and no matter how companies dress it up they are all directly replacing UK staff with Equivalent overseas staff cheaper and mostly less skilled. We orginally opened doors to offshore IT staff because we had a skills crisis in the early naughties. Now there is no excuse. The government may not react but never mind the great depression, this wil be more like the great revolution.
As an indirect Share holder in BT through pension schemes and the like, and a user of their services, I find their rationale a suspiciously flawed.
It would seem they can't manage the project within time and budget using local expertise. They've been doing IT projects for how many years???? Cost cutting stems from inadequate URS and PP planning. The result is a schedule crunch to be solved by throwing labour at it. There is no budget for experienced labour to dig the job out hence the labour from "lower wage" economies. There is an axiom that says, roughly, "putting more labour on a late project makes a project later" but by skillful BS the BT managers can deflect responsibility.
Meanwhile UK IT support is compromised, UK skill base is diminished and your/mine hard-earned used to pay for BT products is wasted by BT and the profits paid out abroad.....
Hmmmm - not good.
that is all it is.
Go back to 1950s America, where 2 works next to each other doing the exact same wage got different salaries because one was black and one was white.
Most people would not suggest this is not unfair and a travesty.
However, ferry in the 'blacks' from abroad under the wing of a friendly corporation.
now company A is not employing white and black people doing the same job next to each other at different salaries... oh no...
now it is 'just capitilism'.
The fact the company A gets company B to supply em with 'blacks' for half the price as the other works is fine.. its just a coincidence apparently that they are onshores....
nothing to see here. all fair....
total sh1te imho.
It's old schoold racism in new clothes and it's pathetic and wrong by any normal persons moral standards.
> what you are struggling with here, people, is the fundamentals of an idea called 'capitalism' or 'the free market' - if someone can provide labour/goods/resources more cheaply, we should use them, so goes the theory, because doing so drives prices down
No, what you are talking about here is a kind of "wild west" or "casino" capitalism that cares only about short term profits. This "go for broke" investment mentality fails to correctly quantify the true costs (including social, environmental and long term economic interests) of a business model and seriously damages the long term viability of company as a going concern.
While BT's profitability fails and business falls apart rivals (particularly several European telcos) who didn't resort to such stupid short-termism consolidate and grow.
>if someone can provide labour/goods/resources more cheaply,
Yes, that's the essence of capitalism, and there's nothing wrong with it.
Except that you left out any mention of quality. Most of the "offshored" projects I've worked on have been taken away from local staff who vary between "passable" and "excellent" and been handed to people who are utterly unsuited or incapable of doing it.
However, the general equation that the management uses is
1 local person = $400
1 offshore person = $200
But our large corporations are increasingly being run by people who don't actually have a clue (do I need to point at any banks here?) and they neglect the last bit of the equation:
1 person to fix the damage done by halving the cost of the original person = $600
Not every time of course, some transfers have gone very well. But these are in a very small minority - so far, of around 30 projects, I've only seen 3 or 4 that could be rated as a success after they've bedded in. The rest have ended up vastly over cost or with the people who used to use the systems reverting back to massively inefficient systems while demanding replacement systems that actually work.
It's a bout time the rest of the world got a bite of the pie, hopefully Africa will be next. When prices across the globe have finally normalised racists won't be able to hide behind economic arguments anymore and maybe ignorant people will turn their ire away from immigrants and back toward the rich ruling elites and bent governments of the world.
RBS employ hundreds of Indians, both onshore and offshore, getting rid of permanent UK staff to be replaced by foreign nationals.
Remind me who owns RBS again? Oh yes that's right, even the UK government is now complicit in the act of killing off the IT industry in this country and turfing out taxpayers for non-taxpayers.
What a load of shite.Take two cars, a Kia Ceed & a 3-series Touring. The BMW is twice the cost of the Kia, it will have less of a warranty, service costs will be higher, and if anything does go wrong with it you'll pay through the nose for BMW spares. At the moment, the money in the motor-trade is currently in servicing rather than sales.
Sorry, but when it comes to cars (and a great deal of other things in life), the extra costs tends to be the prestige of having a brand, rather than higher quality.
Go here www.migrationexpert.com/UK . I took this test a year ago and said I was a pig farmer, had no degree, spoke no English and didn't expect to earn much when I got here (why did they want to know that). They also, suspiciously, asked me how much money I had available.
I passed the test but there was a £400 fee for documentation. Innaresting....
Best rate I ever had as a contractor for desktop support\project rollout was £19ph back in 2001, closely followed by £17.50 - 18.50 around 2004-2006.
One of the lowest rates was working for a local authority that paid £12ph, it was a substantial rate cut I took from the 2006 rate, just to be closer to home for the wife & kids.
The very worst rate of all I took when there was absolutely nothing to be had was £78 a day & I took that because it was based in my city centre about 20 mins walk away from my house.
As others have stated the rate you take is not the rate you pay yourself, its there to pay the tax's & both sets of NIC's, to pay accountants, to pay yourself between contracts\sick pay & holiday (actual family holidays not ones enforced on you by sudden contract terminations). I earned far less overall than the permies taking all that into account with far less job security & I was far happier than most of the permies when I was working & I wouldn't have swapped that experience for the world.
After being shown the door from the local authority along with some others, I managed about 2 weeks backfill work & 3 interviews in four months before I gave up my Ltd co & utilised my (new) residency status to move to Canada.
Coat because you need a good one here.
Companys that i have actually seen involved in this practice
AVIVA (formally Norwich Union), BT, Norfolk County Council, Computer Centre, Datalect, A&O (formerly EDS)...etc.....
Agencys Involved Modis International, Computer People....
OK so this is how it goes...
The Company go to a Recruitment Agency, some one there (may or maynot) offer a back hander to get cheap staff...
The agency advertises the job in the UK at a inflated unrealistic price (200 to 400/day) on the internet.
Lots of British Nationality applicants (hundreds+) apply for the postion.
The Agency rings up the most suitable applicants and asks if they are happy about the rate offered, which everyone says yes, very nice rate, very interested.
but....
They also advertise the same job in India/Pakistan etc...
(BUT at a much lower rate such as £30 a day, which for those countries is a lot of money) and also say they will pay for flights and sort out accomodation (like 10-15 people living in the same house which is rented by the agency) etc...
They (the agency) then turn round to the Company and say they have a few UK nationals but they are demanding unrealistic rates, but... they do have lots of Highly Qualified NON UK Nationals who are immediatly available to relocate and accept the offered rate!.
The Company may or may not realise but they are being ripped off by the agency as are the foreign staff who (dont speak good English) are being imported into a UK industry that has tens of thousands of unemployed staff looking for work.
When thier contract ends, then then are shunted off to some other IT job (which is never advertised as they now have surplus legal slave labour avalable to draw on) and the Agencys then pocket the surplus for the xmas do and the company profit margin.
Meanwhile the British IT workers are left on the dole facing having thier homes repossesed because they cannot find ANY IT work in the UK because they are constantly being undercut by the immigrants who are working at well below the UK legal minimum wage.
Which is why many of us are now forced to look for work in Europe, Canada, Australia/NZ.
rant over :)
Maybe someone should kick (whats left of the UK.Gov. ) into shutting down these Agencys with thier sharp practices and sending all these foreign workers home.
@John Bayly :
> Sorry, but when it comes to cars (and a great deal of other things in life), the extra costs tends to be the prestige of having a brand, rather than higher quality.
Doesn't work like than in software engineering / programming -
You've clearly never had the pleasure of working on a terrible codebase hacked together by a drunken recent graduate who was hired at half the costs of the senior guy, left to his own devices and learning on the job.
Or trying to bugfix / maintain some hideous undocumented crapware created by an offshore team in a different timezone who barely speak english and got the qualifications the sub-sub contractor demanded off the guy on the street corner with the photocopier.
Yeah - buy the cheapest. Good luck and just see how that works out for you!
ps. I'll be available after you've slipped your deadline, wasted all that money and are finally willing to pay the market rate for someone with skills, requisite experience and track record to do the work properly.
This stuff is really beginning to bite.
I had reason to visit BT Labs (sorry adastral park ... wtf) in Martlesham last week.
Seeing bus loads of workers from the Indian sub-continent wasn't too surprising. However I was more surprised to see the busses crowded by hordes of pasty faced urchins when it stopped.
"Carry your laptop Mr ?" "shine your shoes governer ?" it was getting a bit scary until some wise indian girl threw the crust of a peanut butter sandwich into the crowd and everyone slunk away while the urchins fought over crumbs.
Occasionally you'll see an ex-contractor sitting on the floor and a sign reading "will code for meat" in front of him.
Night times are a different matter. There's many an attractive female ex-project manager forced to sell herself to anyone with a few quid to spare. Or an ex-coder who is all to familiar with taking it up the rear for a few extra coppers.
Meanwhile our Indian friends walk around fanning themselves with £50 notes occasionally hiring white folk to fan them, bring tea etc.
The end is nigh. Kesgrave is a town on the edge.
To the AC near the start of this.
£220 isn't much when you consider:
Have to live in hotels (and trust me, you usually pick the cheapest - no £120/night hotels like when your company pays for you), away from friends, family.
That's before tax.
Before you pay for hotels
No sick/holiday/training
No job security/redundancy payout
Before you criticise, give up your permie job and go contracting.
Stomme eikel.
I've heard that Lloyds Banking Group is another who outsources all their development. Now that they are merging, sorry taking over, HBOS, I wonder if they will stop using Indian outsourcers and go back inhouse? I suspect that they have to because it would not look good for a company who majority shareholder is the government to use non-UK staff.
"Hard-working Indian immigrants pass much-needed money to their families, improving the standard of life back in India."
Dream on, friend. How do you think these Indians got into top-flight universities against horrendous competition in order to qualify for the outsourcing company? They all come from wealthy middle- or upper-middle class families. None of the dough we pay them trickles down to poor Indian families.
They take these jobs to get experience, improve their English, and beef up their CVs. Then they move on - which reveals another hidden cost of using outsourced labour. The work BT pays for (the source code, the Word docs) sometimes completely vanishes when the Indian leaves the outsourcing company - happened to me.
Firstly, let me describe my time at BT in Martlesham a couple of years ago...it took about 2 hours to get through security on a Monday morning as busload after busload of 'Indian' (just a guess but they were all Asian) bodies piled into the security building to get their temporary passes. Me and my colleague, an American, were amongst the very few non-Asian faces at lunch time, and it's a BIG canteen.
I have witnessed the same kind of behaviour at Vodafone in Newbury, Co-op in Manchester (nice ethical policy, giving the locals jobs to Indians), LloydsTSB and elsewhere. The 'resources' at Vodafone lived above an Indian restaurant crammed in like sardines according to colleagues who worked there.
Several times I have witnessed teams of more than 20 with a nominated spokesperson whose English was considered good enough to communicate with the locals. Imagine what gets lost in translation.
The normal incentive for the short-sighted UK management that subscribes to this 'off-shoring' is the typical £100/day rate that they get quoted. The skills are almost always run-of-the-mill (Oracle, SQL Server, Java, Unix, C etc) and readily available in the UK market, so the argument that they fulfill a skills gap is absolute bollox. Even if true, what about training recent graduates or school-leavers?
This is what pisses me off - jobs that can readily be filled by EU nationals (even Brits!) are being now being performed en masse in the UK by non-EU nationals. It's one thing to send the jobs offshore where costs and therefore labour rates are lower, it's quite another to import the low labour rate into a higher cost market and unfairly undercut the locals.
The UK government simply does not care one iota about the displaced UK IT staff, both contract and permie. Management wants lower costs, at any cost. Simple as that. The agencies are fully complicit in this stitch-up, fo' sho'. So long as they get their cut they don't care where the warm body comes from. It's a volume game for those vultures.
The quality of the offshore work that I have witnessed has been poor generally, and in some cases downright shocking, as attested by the techies back at the customer site. Management needs to ask the cost per unit of high quality work, not what each of the non-EU nationals is being paid per day. Throwing armies of cheap bodies at the problem leads to higher costs, almost always.
I would never recommend IT as a career these days and that's the saddest part for me :-(
I would just like to point out that if pasty faced Brits were replacing Indian contractors in India there would be rioting and fires. Why is it that western countries continue to allow a few family cartels in India to become immensely wealthy at the cost of the welfare of their own people?
The Tech Mahindra contractors are paid split, half in the uk and half in india (in fact its not even 50/50). The indian gov gives them high levels of tax relief on the bit earned through offshore (ie working in the uk) work, so while they may be cheaper, theyre actually a lot better off than they look on paper compared to the expensive UK employee they just replaced, because the whole Tech Mahindra setup is taking the mickey out of the british taxation system.
You should also remember that not so long ago Tech Mahindra was once called Mahindra BT, and only very very recently was it floated off and sold, so it was designed at the start as a mechanism to offshore all the IT workers and managers to india without raising the spectre of mass union action... Now BT has flogged TM to some unsuspecting suckers on the basis of their cashflow, they have a new load of bods in from yet another indian outsourcing company, because theyre cheaper than the Tech M guys!
It really is a race to the bottom.
They've just done what happens in the US every day. Immigration law in the US says that you can't sponsor an immigrant to come to this country and work for you if it is possible to hire a US citizen with the qualifications to do the job. The cost of the US citizen in relation to the immigrant is immaterial.
However there's always a loophole. If you were to say employ an immigrant for your Indian based headquarters, you might need to 'train' that person in the US first. What better person to train the 'temporary' immigrant than someone doing the same job in the US. Now coincidentally the US citizen is about to be made redundant, because surprisingly there's this less expensive person who comes from India who apparently can do the same job for less money. Obviously after a specified 'temporary' period.. say 2 years.. the foreign worker will be sufficiently trained in 'company culture' and can return home to carry on his work in his native country.
Company culture? Oh yeah, that one. Now off shoring has a number of problems, and none so important as the lack of understanding of a US corporation's culture. Naturally the best way to solve this problem is to have the coincidentally cheap employee remain in the US after he's received his tech training. Oh happy coincidence (again).. because of course all of a sudden you realise you are terribly short of people who can perform the duties of this new cheaper employee. Obviously we can't think of anyone from our own country that can do this work can we? No of course not, so the best solution is maybe to make that temporary, culture-learning trip permanent? Yes, absolutely that must be the best solution, because if there was someone locally who could do the job, surely we would have found him by now. My guess is it's down to that shortage of IT professionals we keep telling you about when we ask for the number of IT related immigrant Visas to be doubled every year.
Norfolk county Council recently started a 5000 unit PC refresh project, they just took on these so called specialised contractors at some ridiculiously low rate.
the numbers are, 5000 PC's + monitors to be replaced in an 8 week migration project.
so thats assuming that each pc takes 4 hours to build and migrate all data from the old PC
An experienced technician can deploy about 4 pc's in an 8 hour day (real world deployment rate
So thats 1-2 hours to build each PC by RIS, then 2 hours to migrate all user data to it and get it working ok. (not including specialised apps)
they would need: (total PC's / No. of days / PC's deployed) = bod's needed
5000/56/4 = 22 technicians do do the rollout if they work 7 days a week
or ......... 11 if they do double shifts breaking UK's working week laws, which they(the slaves) will no doubt not be covered by.
odds on that it will be x2 teams of 8 doing the deployment, with 1 senior engineer(almost speaks english) and x7 grunts (that cannot speak any english).
Nice to know the council (that lost 40Mil in dodgy iclandic banking investments) is spending our hard earned money wisely on a very dubious IT project.....
who wants to bet that they deployment will be considered a failure if a customer satisfaction review is ever carried out after the deployment,
The outsourced deployment team is always blamed for any thing that goes wrong, not the managers that caused the issues by attempting the impossible with inadaquate hardware resources and unsuitably screened staff.
i wonder how much of our corporate and personal data will wonder off with these foreign contractors....
mines the one with the pockets full of hdd's packed full of council data.....
"- the NHS project, workers from TechMahindra, earn about £220 a day, versus £400 a day for a UK contractors. The contractor told the BBC's File on 4 it was a cost-cutting move. He said he'd got the figures from his line manager."
No savings for the taxpayer. Instead, savings for BT, which mean higher commissions for the sales people and more money for freebies, bribes and kickbacks to hiring managers and executives of customer firms.
I'd like to know how many years experience these imports have in the technology they'll be using.
And is it a matter of the lame, "we can't find British residents with experience in version 7, only version 6, so we had no choice but to import" -- using minor educational requirements of a few person days to scam officials into putting British citizens and residents out of work.
Fact
BT employ contractors to do the work their own permie staff are either incapable of or unwilling to.
The Indians vary from very good to very very poor at times.
BT do this to reduce costs nothing more.
One of their Directors promised their staff and Unions a few years ago on a UK wide conference call that only low level backend work would go offshore - certainly NO customer facing work would. Now look at where it's at.
They are a disgrace, they lied, their staff took it and they are now reaping the results.
Wait till you see the 21cn developments - the Martlesham and other BT permie groups used to rely on the contractor resource to do most of the key work as they themselves couldn't hide behind the unions with an apathetic, lazy couldn't care less attitude.
Now whose going to help you? Serves you right!
That said some brilliant BT permy staff are isolated in this mixed bag of dross. If tye shareholders at BT want to see success get rid of the heavy senior and middle management and some of the back pocket lining execs. Do they still have the director whose other interests are HAYS IT recruitment, on the board?
A Contractor
that's still doing very well with my transferable skills and experience thank you very much.
It is simply exporting jobs from a developed, high social benefit economy with high taxes and cost of living to a low tax economy............ it will always happen. Manufacturing in the 80s and now IT is going to be caned. The sad fact is that the high cost of social benefits and therefore tax and cost of living will accellerate the shrinkage in jobs. The really bad issue for the governement , which they have not appear to have woken up to, is that these people are net contibutors to the Tax system. I do not see a solution... protectionism has problems.... true market economy has problems...
I think we need to examin why we have soooo many economically inactive people (Unemployed, disabled, sick).. they are being carried by the workers.... some willingly but some less so.
I've worked on a number of projects alongside offshore workers (some of which had moved to the uk). The suggestion that anyone brought in from india is a speciaist is just plain rubbish. There are offshore contractors who are genuinely talented and good at what they do, however from my experience the majority seem to be workers who have not had any industry experience, and lack confidence. I've lost count of the number of times I've been on conference calls where one of these so called specialists has been asked a question and the line stays eerily quiet - only if pushed for a response does the person answer.
I've never understood how BT could be saving money using these workers over uk contactors, surely it just ends up costing more money to correct things that have not been designed/implemented correctly first time round.
I'm not racist in the slightest, but soon the only thing British about BT will be the currency the customers use to pay their bills.
The `Cheap, Well Educated, Uniquely Skilled "Representatives" from the Indian "Partner"'
Santosh: `I am having a chip on my shoulder and have three years linux. Stop What you're doing NOW and tell me why this thing you've made needs a "netmask", I've not heard of this rubbish before.'
Kamesh: `I have been working in linux admin for four years and know everything, what does "stale NFS file handle not found mean?"'
Nirangen: "I am an expert embedded systems engineer, why won't this binary for a power pc run on the intel blade? Is it because of endianess?"
Andy: "For fuck's sake, and the third time, do NOT set your test rig to the same frequency as the local O2 3G cell."
Saghana: ("I have been working in 3G for four years") "Oh, if you say so, why shouldn't I?"
Simon: `Can you put your hands up if you've heard of input validation? buffer over-flows? Dangling pointers? Okay Can ANYONE Who's heard of a "Memory Leak" please step forard? See, this is why these guys are a waste of money'
Phil: (Senior Manager) `But They're CHEAP!'
Oddly this doesn't happen on defence sites.
Blimey, you boys are cheap I get more than that even in these times. Everyone bitching about contractor rates on this article and all the other ones recently, get a skill, get a reputation, market yourself and go contracting.
That is capitalism.
AC because customers read these sites.
Bloody took one of you long enough to notice that one!
I don't use my real name because my client happens to be one that appears on these pages rather a lot, though not in this story, and I'd rather not express opinions about the client in the clear as it were, as I like getting my obviously ridiculously overpaid ££££ a month.
Why shit on your own doorstep?
breaks down in general in this model of employment:
1) Get rid of indiginous worker, and bring in low cost worker from abroad.
2) Internally to the company, the costs increase due to linguistic difficulties coupled with cultural differences. This, however, is borne invisibly. It doesn't show up as a direct immediate cost on an accountant's balance sheet, it only shows as a reduction in performance, which is blamed on management structures. The financiers pat themselves on the back and the management crumbles (think: replacing your load bearing steel and brick walls with plain plasterboard. Cheaper, but what will be the 'hidden' costs over time?).
3) You now have the sum cost of all of the monies paid to the 'onsite, offshore' workers being untaxable (they pay in their home country). This contributes to a necessity to increase taxation on the monies that 'stay at home', i.e. you and I.
4) You also have one more person locally that is no longer contributing to the UK economy, and possibly has no job at all, thus actually drains it (rather than about £3-4k contribution to the coffers per worker, there is now about a £1500 drain in benefits). This again contributes the a raise in taxes to cover the fact that the government needs to pay these benefits. Essentially, the FULL cost of the original person is paid anyway, just half of it is punted off to the taxpayer, with only a fraction of the rest being paid by corporations.
5) For all those advocating giving the money to the third world, and saying "Give them a slice of the pie".. By all means. Let them create companies in their home countries, produce, and sell it on the global market. It'll happen, and we'll be in for a good ol' bit of competition. However, in the meantime, the Western economies are struggling. If they fold, then there will be NO work for the third world to take up, thus they'll lose money, existing support agreements and a whole load of benefits, causing collapse of their nascent economies, industry and education.
Paris 'cos she knows all about a slice of pie.
Yes, I used to be a BT Global Services contractor. £400 a day was above the norm. Interesting to read about the intra company visa scheme which appears to be a convenient loophole. Offshoring brought pressure on contractor positions and then on Permie positions. I'm sure a lot of BTGS permies feel very insecure in their positions. BTGS is run by accountants who have driven it by dogma into the ground and now a massive loss. So does the off shoring business model work? errr... well probably not. The owners and directors of the Indian outsoursing companies are still making a lot of money. BTGS isnt, and customer satisfaction is down... If you think the work visa system works, why not turn up at BT Martlesham Heath outside Ipswich and observe the fleet of double decker buses that bring the non EU workers in every morning. Why not ask Chris Mole MP, Tim Yeo MP, Michael Lord MP, David Ruffley MP, John Gummer MP what they are doing about keeping Suffolk techies employed...
Don't get your hopes up about leaving UK for Canada as similar things have been happening here as well.
The Canadian corporation I'm currently in decided to go for a bit of Indian off-shore developing at half the price of the local permies, which is also about 20% of what the local IT consultancies charge here but that's another story. We all naturally complained, pointed out this never works or produces the cost savings imagined, were ignored and off we went.
Almost a year later and the experiment's due to finish very shortly thanks to the incredibly awful code produced by this band of muppets on the other side of the planet not to mention the threat of resignation from the poor chap who was practically working 24/7 trying to manage them. We've had 19 year old co-op students who've produced better stuff that this lot (and they're even cheaper!).
My favourite was the brand-new-state-of-the-art system they rewrote that literally ran over 100 (yes a hundred!) times slower than the old supposedly crappy thing we had before.
I have had so many severely bad expereinces with "foreign" call center staff that these days I refuse to even buy products from companies that employ them.
English Speaking, Live in my own country, Technically Proficient - only.
Barely able to understand english, live far away, utterly clueless script monkey - NO WAY.
Last case: Western Digitial Hard Drives...... Situation: An apparently flawed HDD, sounds like it's having a head crash... Ring the Western Digital "Help Line / Tech Support" for Hard Drives; Gets guy in Philipines / India / Malaysia call centre....
"Hi I have bought a new HDD, and it's having a "head crash".... answer 1. "What is that?"
"It's when the read write heads start scraping on the disk surface".... answer 2. "Could you be more specific?"
Etc.,
A FUCKING CLUELESS script monkey......
Oh Hoooray for Western Digitial Hard Drives.......
This post has been deleted by its author
each company that does this should be named, then we can decide not to buy or use their products.
In the case of BT its monopoly position should be looked into, it is not good for the country.
It always amazes that people do computer science and technology degrees in the UK the market is awful and has been for ages, you are better of learning carpentry though again you are easily undercut by abroad.
So what does the UK offer, and the answer is not very much, and so the pound should plummet, against other currencies when that happens then there will be jobs in the UK.
So, that is an interesting position to be in, knocking sterling and the UK is the right thing to do if you are in the UK and you are young. Remove your tax liability, and go on the dole that again is a wise move, to send the UK further down. Sterling fails as a currency, and the people gain. Mass strikes are another good move, it is not to save your job, that is about to be replaced anyhow it is to hammer sterling and the value of the UK in the eyes of the rest of the world.
I've worked on multiple projects at BT and the spread of Indian contractors has been steady.
Initially brought in to do testing, then bug fixing, then greenfield coding, then design and BA work, then project management work. Almost all onshore, with some low level coding done in India.
Alongside them on the management side Accenture has steadily spread its tentacles to the point where many BT staff actually report to non-BT managers.
When things go wrong (as they often do) the solution is simple. Flog the Indians til they drop and bully the UK staff to comply as far as possible. 24 hour shifts, including over weekends, frantically churning out release after release in the hope one will eventually go right.
Managers banned from turning off their mobiles, so some lunatic can phone them up at 4am and abuse them about another issue.
So much for working time directives and human rights law.
Part of the problem is there is a whole layer of BT management in their 40s and 50s who are locked into their final salary pensions. They have no desire to leave as they'd reduce a great pension, and no desire to rock the boat in any way. The good ones bite their lip, try to minimise the screw ups, and keep their head down, the bad ones do what they've been doing for the last ten years or so - nothing.
The leadership vacuum they have created is exploited by more commercially savvy suppliers who are stripping the company bare.
OK, so what's new here ? I sat around and watched Inidian guys doing my job whilst they hoped I would up and leave. My advice to anyone permanent, stick to your guns, make sure the management are aware that you know someone else is doing your job and then threaten constructive dismissal. Worked for me. Ironic thing is, I was a permie and it costs the parent company more for an indian contractor than it cost for me.
I used to work as a permie for BT and IMHO found the management decisions to be 'questionable' and very often short-term solutions to serious long term problems. This situation sounds like the cumulative effect of much short-termist manager bodging, is coming home to roost. I got out and am very pleased I did.
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