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It Jobs 'lost To Cheap Labour'

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£220 a day or £50,600 a year assuming the contractor works 5 day weeks and is out of work for 6 weeks a year - they're still paying the Indians more than the permies :lol:

£400 a day seems fairly standard for UK contractors. I'm sorry, I know there are some very good and specialized contractors out there who are probably worth over £100,000 a year, but there are also a lot who are doing the same job as all the £35k people - to the same standard - of course a company is going to look at reducing that cost.

This isn't really news anyway - been going on for years now.

Edited by impatient_mug

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An example of big corporates who do not care about using local staff. They want to sell the overpriced crap services to the local pupulation, but don't want to employ them. Before people say IT contractors are paid too much, this kind of activity is going on in all sectors, and the Indians who come here can save money and buy alot more back home. However UK contractors have all the inflated costs to pay which go with living in the UK.

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The market will continue to disabuse BT of their institutional cretinism (whilst it persists); a value-adding role lost to BT is a value-adding role gained by a competitor.

Given the history I'd cheerfully predict (hi Noel!) that BT will shut down GFS after their key clients (in the financial sector) fail to renew and decide to go it alone - and not for the first time, either; a process which will take perhaps two years.

The real tragedy here is that the taxpayer is unable to vote these intellectual dwarves "off the island".

Edited by ParticleMan

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eh? £200 a day is still way too high - its only IT work FFS, it really isn't that difficult.

That is so funny. As someone who does IT work and charges double that, if you think its so easy then start doing it. What do you do now? Shop assistant?

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British IT contractors have lost their jobs to non-EU workers because they were cheaper, the BBC has been told. An ex contractor at BT's Global Services Unit, said IT contractors laid off recently by BT, were told workers brought from India to the UK cost less.

He claimed the overseas workers working in the UK, received about half the rate for the job he was paid.

But BT said it was looking to cut its reliance on contractors and the Indian firm was supplying specialist staff.

Immigration rules allow for companies to employ their own workers in the UK, from non EU countries using intra company visas where staff had specific company knowledge or distinct skills which were not available in the UK in a process called on-site, off-shoring.

A BT spokesman said the company had a long-established relationship with Tech Mahindra and it made business sense to tap into their highly-skilled workforce.

The company was looking to reduce the use of "expensive contractors".

Replacing contractors was part of a global, outsourcing deal and no permanent BT staff had lost their jobs, BT said.

Outsourcing deal

The former contractor, who worked on an NHS IT project at BT Global Services in Leeds, told File on 4 that IT contractors were told: "We have to cut costs, you've got to go."

o.gifFIND OUT MORE Listen to File on 4, BBC Radio 4 2000 BST, Tuesday 2 June 2009, repeated 1700, Sunday 7 June 2009. Listen on iPlayer Download the podcast He claimed that staff were told they were being replaced by new staff who were employed at lower rates of pay by Tech Mahindra, an Indian company that BT Global Services has a 31% stake in.

The contractor said he received £400 a day while the Indian staff would receive £220.

"I haven't seen it written down on paper, but these are the numbers that were given by our line manager," he added.

Tech Mahindra told File on 4: "Our operations in the UK comply with all the prevalent laws governing immigration and work visas. Employees are transferred to the UK if and only if their particular skills are needed to execute a client's projects."

'Jobs loophole'

It is the potential widespread abuse of on-site, off-shoring that has caused concern to Ann Swain, head of the Association of Professional Staffing Companies (APSCo).

She said the association feared it was being used as a "loophole" to bring in cheaper foreign labour.

"We're looking at about 35,000 IT professionals coming into the UK frankly in a market that is not short of IT professionals in the incumbent workforce," she added.

Her comments were disputed by Keith Sharp, marketing director of NASSCOM, the body which represents companies such as Tech Mahindra.

"These are not permanent UK jobs. Where we have permanent UK jobs, our preference is to fill those with UK nationals," he told File on 4.

He added: "Government guidelines are very clear that there can be no cost advantage in bringing in an Indian IT professional on a temporary assignment as opposed to a local contractor.

Undercutting pay

"If there is non-compliance or any abuse that should be stopped."

In March Professor David Metcalf of Migration Advisory Committee, which advises on the kind of the jobs the UK Might need migrants to fill, said his committee would be investigating on-site/off-shoring.

Professor Metcalf told the Commons Home Affairs Committee in March, "The people coming in to do IT jobs are disproportionately coming in through the intra company transfer route and we will be having a proper look at that in our review.

"If there were real elements of, for example displacement or undercutting, we will report on this."

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Why are a good 60% of the people who are qualified in it still crap at it then (anecdotal, from my own personal experience, and of course excluding me)

It's not professionalised like engineering, or law.

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IIRC, BT's recent results revealed a £1.5bn loss for Global Services.

Indeed. But it's not group specific, it's just that the machine has decided to unload all their losses onto GFS - the piñata's been filled with raw sewage fit to bursting for some time now, and GFS happened to just score the last lucky strike.

So now the politics of the situation demand that what should've been the growth engine becomes the Great Satan instead, and that the company resolve to never ever do anything like that again.

... and who better to take the reins, than the same damn CFO who signed off on all the business cases leading up to the point of failure...

But yes, BT is actively coreing out its own UK operation by paying over the top ratewise to TM (who aren't redistributing the largess) and yes the effect depresses contract rates at BT.

The remaining questions are :-

1/ Is this kind of structure really better than directly engaging the actual (foreign) contractors directly at the NHS?

2/ Should the NHS be capitalising what's obviously zero-value-add commoditised IT (or healthcare for that matter) at all? (surely leasing it or letting the end user source it elsewhere is better use of our capital?)

Edited by ParticleMan

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He claimed the overseas workers working in the UK, received about half the rate for the job he was paid.

Meanwhile the actual cost of the contract is greater at inception.

Replacing contractors was part of a global, outsourcing deal and no permanent BT staff had lost their jobs, BT said.

This is abject nonsense, complete doublespeak that seeks to rebrand the actuality of what's occuring.

Although it must be said that there's usually a financial incentive involved (to go); and it might be brought into question whether a £400/day (I assume - contract) rate is something the client (ie, John Q Taxpayer) can afford to fund...

Tech Mahindra told File on 4: "Our operations in the UK comply with all the prevalent laws governing immigration and work visas. Employees are transferred to the UK if and only if their particular skills are needed to execute a client's projects."

Explain "knowledge transfer" then, eh?

"These are not permanent UK jobs. Where we have permanent UK jobs, our preference is to fill those with UK nationals," he told File on 4.

No, they're not permanent jobs, because you have taken permanent jobs and reclassified them to be a series of project tasks.

Et viola...

He added: "Government guidelines are very clear that there can be no cost advantage in bringing in an Indian IT professional on a temporary assignment as opposed to a local contractor.

Which goes a great way to explaining BT GFS' recent P&L - in fact there is no cost advantage, but this doesn't negate that wages (or contract rates if you prefer) are lower and the spread is being pocketed by Tech Mahindra (et al)'s owners in the form of retained profits (now handily retained offshore...).

Who would this be again? Oh yes...

Then again, it should surprise no-one here that BT is now drowning in their own managerial incompetence...

... they've been underperforming the FTSE for good reason...

Edited by ParticleMan

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And how would that help? Have you used a solicitor recently?

:lol:

Well, it'd probably help a bit. I know a lot of people who took a BSc in computer science who couldn't code to save their souls. This is why, I presume, that industry requires work experience above all - the degree is hardly proof.

I don't think it's quite the same for a chartered engineer. They get a degree, but then go on for professional accreditation, which is (supposedly!) more focused on the demands of industry than the demands of university academics or government bureaucrats.

I'm sure there are still crap engineers - and solicitors - but surely less than there are hapless IT graduates.

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eh? £200 a day is still way too high - its only IT work FFS, it really isn't that difficult.

Why are a good 60% of the people who are qualified in it still crap at it then (anecdotal, from my own personal experience, and of course excluding me)

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eh? £200 a day is still way too high - its only IT work FFS, it really isn't that difficult.

Yeees. Well there is a double irony here. The first is that you don't actually believe its that simple because if it was, you'd be doing it yourself. The other irony is that the IT workers/contractors you've had contact with were good because they made what they do look simple.

Unless of course, everything looks simple to you ... in which case you must be a ...

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Does anyone know whether the BBC/other media are actually picking this story up in a serious manner?

The reason I ask is that "we've" just received a quite angry memo from our "union" in which it discusses these very issues - including the fact that US HQ are refusing to answer questions such as these.

I would love for this memo to get in to the hands of someone taking the issue seriously.

I really do have to f*cking wonder how many of these Chindian peasants they expect to be buying their services in years to come.

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Does anyone know whether the BBC/other media are actually picking this story up in a serious manner?

The reason I ask is that "we've" just received a quite angry memo from our "union" in which it discusses these very issues - including the fact that US HQ are refusing to answer questions such as these.

I would love for this memo to get in to the hands of someone taking the issue seriously.

I really do have to f*cking wonder how many of these Chindian peasants they expect to be buying their services in years to come.

One word ... wikileaks

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BT in particular has made a point of describing contractors as expensive. However, the background to this is that BT completely underestimated the cost of the NHS work they won and as a result were in the shitter from day one. I have numerous anecdotes of people having to work 12 hours a day on low contract rates, to compensate for the underbidding. At one stage I was asked if I was interested in working on the project. I was told the rate was £300/day, about half of what I was on at the time.

From my experience current rates have fallen by between 35% and 50%, mainly due to supply and demand i.e. plenty of supply, no demand. Part of the excess supply has been caused by out-sourcing, however, I think most of it is just that large companies are no longer spending. As i mentioned in another thread earlier, one of the FTSE top 10 companies I know of has just asked hundreds of permanent staff to re-apply for jobs.

Finally, my experience of working with off-shore teams is that they are generally useless. Not all of them, but they the majority fall into the realms of cannon fodder. If you want someone really good you still have to pay proper money for them i.e. above average rates. This may change in the future, especially if capital spend stays low, as looks likely.

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However, the background to this is that BT completely underestimated the cost of the NHS work they won and as a result were in the shitter from day one.

They've gone from strength to strength in this area; I don't use the term institutional cretinism lightly, but I do use it here.

So what's the solution?

Of course! Promote the CFO to the CEO slot.

Brillant.

Truly Paula-bean-esque.

You couldn't make it up.

(you could short the crap out of it though)

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They've gone from strength to strength in this area; I don't use the term institutional cretinism lightly, but I do use it here.

IIRC, BT's recent results revealed a £1.5bn loss for Global Services. Basically, BT has stopped being a telecomms supplier and has started trying to be an IT service company, without having a clue what they are doing. I wouldn't work for them in a month of Sundays.

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Guest vicmac64

Treasonable Globalism - our Government are not protecting the people - they must be held to account.

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That is so funny. As someone who does IT work and charges double that, if you think its so easy then start doing it. What do you do now? Shop assistant?

it is easy, you break a complex problem down into lots of smaller simpler steps, and hopefully assign meaningful names to data items etc and code it in a structured manner so its easier to maintain.

IT IS NOT DIFFICULT.BUT IT IS VERY BORING AND SO ARE THE PEOPLE THAT DO IT.

i worked for a big software house AND HATED EVERY SECOND OF IT , EVERY DAY SEEMED LIKE A WEEK.

IT WORKERS have an overvalued sense of self worth, its non productive b0ll0cks mostly, and should pay about an average salary circa £23k.

ENDIF TALKINGB0LL0CKS.

ELSE PAY £23K.

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I have worked for one of the worlds major Indian onsite/offshore companies and can confirm the following

1. If you "transfer" an Indian employee to UK you still need a work permit - however, with the new system of self-issuing of WP's the system is now ripe for abuse.

2. There is no National Insurance payable on the salary of an Indian employee for the first year of their employment in the UK if it is intended to be "short term" i.e. less than 2 years. This reduces the cost of employment by over 12% straight away.

3. Many of these companies take advantage of HMRC's "dispensation scheme" whereby Indian staff in the UK are paid round sum amounts each month to meet the cost of rent, food and travel. These amounts are not taxable and paid gross, allowing the employer to reduce the taxable salary and leave them with effectively the same take home pay as a UK national at greatly reduced cost.

4. Jobs are "rotated" to get round the 2 year rule, i.e. the same role is filled by a new person every two years - i.e. the role is permanent but the person is not, allowing continued abuse of the tax benefits available.

5. These companies also import Indian employees to back office work such as HR, Finance etc - quite how these are "unique" skills I don’t know. Also, the requirement to advertise the jobs in the UK is handled by placing ambiguous, tiny adverts at the back of crappy publications that no one reads.

6. In my experience, the Indian employees see this 2 year stint as a life changing opportunity to generate a lot of cash. They save a lot of salary and use it to buy houses etc back home.

7. Many Indian transferees also come over on Business Visa's and do work for several months and pay no tax at all!

8.

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