Wednesday, Jun 03, 2009
EU employment laws are a joke
BBC: IT jobs 'lost to cheap labour'
BT deserve all the losses they get...
"employed at lower rates of pay by Tech Mahindra, an Indian company that BT Global Services has a 31% stake in."
Would this happen in France where workers have backbone ?
Posted by doomwatch @ 11:01 AM (973 views) Add Comment
19 Comments
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1. Jessica Rabbit said...
It's not just BT. It's Virgin and hundreds of others. What they don't mention is that often these 'transferred' consultants aren't actually any good. A lot of the indian contingent are graduates and have little or no practical experience of the jobs they are transferred to. My husband is an I.T consultant who often finds himself employed to come in and sort out the mess left behind by the cheaper international labour brought in to save money. It actually ends up costing the company more in the end, and the majority of that money has gone abroad.
2. braindeed said...
Doomwatch
The workers (for the electorate are so) voted to emasulate themselves.......ergo no sympathy. The French have a gut feelling for the notions of Liberté, égalité, fraternité, - here, sell them a new front door for their council flat.....oh, go on guess.
3. Frank Mason said...
So.... this has been going on for years; isn't this what 'being in business in your own account' is all about? Suppliers undercut each other
all the time, and often there's a lot of nepotism.
I was an IT contractor for 18 years until 2003 then went permie. One day I hope to return to the contract world, but not yet!
Frank
4. george monsoon said...
I can identify with this article, being an IT bod myself. I have watched the IT industry deteriorate over the last 20 years.
We are now a long way away from the haydays of the 80's.
I work for an extremely large company (recently merged with another US giant ... therein lies a clue!)
My wage has been static for 2 and a half years. This year we are being asked to vote in a pay cut, and in the background, the management are oblivious to the fact that their workers all know about the plans to "best shore" as much of the support structure as they can get away with. At the moment our clients are happy with our work because we are based in the UK and there are no cultural or linguistic differences.
Earlier this week I had the unfortunate task of talking to my internet provider's 1st and 2nd line IT support people. the level of service I received was not only shockingly the "techies" lacked the basic fundamental understanding of how to do their job.
This is after I spend an inordinate ammount of time getting past the communication problems. I could not understand what they were saying and they did not understand what I was saying. All through the phonecall (15p per minute) at 40 + minutes, I bit my lip, throwing these morons all the rope they needed to hang themselves. At the end of which, my account had been so messed up, I had to talk the guy through, how to re-enstate it and eventually, how to perform a basic trace back to my router to identify the cause of my fault. (It turned out to be my exchange that was at fault)
Sorry about the rant, I believe this is relevant, in that if we are not careful, many knowledgable IT people over here, will have to suffer the indignity of relying upon foreign cheap, badly trained people to sort out their home IT issues. It beggars belief !
If any of you guys are in a managerial position in an IT company that currently outsorces, or is seriously considering doing so, try to see past the pound signs and wake up to the immense damage that you will cause to your company's reputation and the very tallented staff you really NEED to hold on to.
5. Ironman said...
I've worked for numerous companies that have done the offshore thing. It never works. On a function point by function point basis dollar for dollar they work out much more expensive to offshore or offhore/onshore than use indigenous developers.
The well known travel company I work for now has just axed off shore because and I quote "Communication problems. The offshore developers actually work in real terms multiples more expensive the quality is poor and indiginous developers are capable of 3 times the work rate of on shore offshore and 10 times that of offshore".
Work returned from offshore as done invariably has to be reworked and is useless plus it takes an age to specify what you want.
Companies are steadily learning it doesn't work out in the real world the same as it does on paper. In the mean time our work force is being deskilled and grads left untrained.
6. stillthinking said...
The problem is that the UK workers have to support families in the UK, hence their inability to compete on price. Their family spending is exposed to the UK taxation burden, even for something like food, generally considered a non-taxed item, the price contains the taxation on labour, and ultimately contains the taxation on the disposable income of labour. The obvious conclusion is to work in the UK but not have your family here.
7. braindeed said...
@ 2. stillthinking said...
I refer the learned gentleman to my previous statement. There really is no escaping the fact that the people have voted for this, for all of the past 30 years. It's been Hobson's choice admittedly – there’s never really been a well argued antidote to the ‘Anglo-Saxon’ economic model, that's been put forward during either Tory or NuLab rule.
8. paul said...
The IT industry has had this coming for some time - it will always choose 'cheap' over 'good'.
And unfortunately once you stop employing UK people, the market for your products also tends to gradually fade.
The only IT workers I know in regular work in the UK now are semi-retired or retired - they used to work for companies like Fujitsu, Logica, IBM, BT. None of these companies are hiring permanent high value staff any more on the IT side. Only bodyshopping for cheap Indian workers. So the brain drain continues.
9. stillthinking said...
You are right. However, I never voted for it.
But I don't see it as the anglo-saxon model. Brown pursued a strategy of controlling wage inflation with imported labour. That is one of the reasons why the debt bubble managed to grow without any inflationary signs. He often, in tandem with King, used the idea of the NICE decade, which merely suppressed obvious and clear danger signals on debt buildup, and was of no benefit to workers at all... I would be very interested to see even one convincing explanation of any ultimate benefits achieved through wage suppression.
For me, the unfairness of it, being an IT worker myself, is that although there is undoubted downwards wage pressure on the IT sector generally, there is no equivalent downwards pressure on broader wages. As in, the nature of IT in particular allows wage competition which is not accompanied by cost of living competition.
Perhaps we now see broader deflation to compensate. Anyway.
10. stillthinking said...
One more,
I don't actually see anything wrong with international wage competition, and I believe that competition is good. However, there are high costs involved in running the UK, over 50% of GDP, and to the extent that wage competition seems to be largely biased to those who do not have to support the ship of state, embedded deeply into every UK price, it isn't really wage competition at all. Just tax avoidance.
11. mander said...
My experience with BT: Took them 3 months to make the lines work in my office and another 6 months to get an VOIP phone trough the system. Now competence should apply to everyone and everywhere.
Job loses are bad news regardless how inefecient a company may be.
12. stillthinking said...
How about this for an idea.
The government in the UK are currently carrying out a stimulus which will end up costing the average worker 10K, to be recovered through taxation over the next ten years. The UK worker, redundant now or not, has to repay this debt. Perhaps as a condition of working in the UK, we could ask, reasonably enough, that foreign workers being beneficiaries of the debt, could take on the equal liability for the debt as a UK worker.
Lets be honest, if we billed foreign workers for the cost of running the state, including our -future- liabilities (being incurred -now), it would no longer make sense for them to work here and they would run a mile. Work in the UK, become immediately liable over your working life for UK bank defaults, insane state spending, chronic and increasing government debt etc
Which Indian worker do we expect to agree to that?
13. Ironman said...
I've worked for numerous companies that have done the offshore thing. It never works. On a function point by function point basis dollar for dollar they work out much more expensive to offshore or offhore/onshore than use indigenous developers.
The well known company I work for now has just axed off shore because and I quote "Communication problems. The offshore developers actually work in real terms multiples more expensive the quality is poor and indiginous developers are capable of 3 times the work rate of on shore offshore and 10 times that of offshore".
Work returned from offshore as done invariably has to be reworked and is useless plus it takes an age to specify what you want.
Companies are steadily learning that savings on paper don't translate in the real worldr. In the mean time our work force is being deskilled and grads left untrained unemployed so exactly who will buy those luxury barratt bijou shoe boxes?
14. Steve said...
Standard Charter Bank folow a similar practice, they terminated permanent and contract IT staff alike to bring IT staff from their India office into the UK to work for lower wages doing the exact same jobs. All large UK companies with India connections now do this. UK employment laws covering on-site, off-shoring are almost non-existant. When you facor in EU workers on top of this, its a wonder there are still and UK people being employed. But then thats the price of globalisation and a weak government. No wonder UKIP is the most searched term in google ahead of the Euro election tomorrow.
As Paul says once you follow this to its logical conclusion there will be no market in the UK.
15. d'oh said...
George Monsoon @ 3 Zen Internet is my answer to your problem. You immediately talk to someone who knows what they are doing. Worth the extra few quid a month.
16. shipbuilder said...
stillthinking - while I enjoy your posts and your talent for seeing all the angles, I can't help feeling that you always assume some sort of striving for general benefit on behalf of the government/business. The benefits of wage suppression are obvious for the CEO or shareholder of a large business and they, ultimately, are the ones that matter in this world. Globalisation means one thing and one thing only - large corporations being able to take their business to where labour is cheapest. That is not competition. Absolutely nothing to do with the mutually beneficial 'Wealth of Nations' fantasy that it is portrayed as.
We are not a world of trading nations, we are a world of multi-nationals with no borders and without loyalty who care nothing for the economic policies of nations - they are now in charge, and the nations must compete in the race to the bottom for their benefit.
17. shipbuilder said...
To simplify - 'nations' are no more - just pools of labour to be sold by their governments. Such niceties as cultural identity, for example, are uneconomical in such a situation.
18. mdmick said...
OMG!! A thread not quite about house prices and it hasn't been deleted!!!!
I have changed banks and mobile phone provider on the basis that I can not always understand the person to whom I am talking on the phone during my limited lunch hour. It is not practical for me to talk to someone who I do not understand or who does not understand me.
Add to that the script which these people tend to follow so that they can not address issues which fall outside the script.
And that's enough justification before even considering where in the world that person lives.
19. doomwatch said...
Unfortunately most of the commentors on this thread seem to have confused highly skilled contract analyst programmers with the robots in off shore call centres. This use of an "IT" catch all has to be addressed at some point. Would you classify a brain surgeon and a hospital meal wheeler under the same banner of "Medical" ?