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Ubs It Contractors 10% Pay Cut


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Wait, are these the poor IT contractors that earn 90k a year in the "under 35s" thread?

All part of the contracting game, I'm afraid. Back when I was doing it, I reckoned that I'd earn in 4 months what a permie doing the same job would get in a year and whilst contracting was certainly less secure it wasn't as if permie staff had a 'job for life' either. Therefore, the extra cash more than covered the short term nature of my income stream. As it happened, I got lucky as the economy was in a boom phase at the time and worked for years in a single contract instead of bouncing around between jobs. The client paid steadily less but I got better at negotiating and dealing with the agencies so I actually managed to earn more over time. The amount of gouging by agencies was simply incredible.

They're lucky to have the choice between pay cuts or termination of contract ... still I imagine that such is their immense value-add potential to any business that they'll have no problem skipping off to another higher-paid contract, right? :lol:

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So the contractors who are actually good take the 4 weeks notice and go somewhere else. UBS then end up hiring new contractors with no knowledge of the systems/business at the going rate, which is what they were paying originally, except now they'll pay for a contractor for 1-2 months for him/her to learn the systems/procedures before being as effective as the contractor they got rid of.... Sounds like a great business plan :rolleyes:

90k sounds like a lot of money, but of you're a good permie in it it's fairl easy to get quite close to that sum including pension etc. The difference is that the contractor can avoid a lot of income tax as long as he/she doesn't end up inside ir35...

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All part of the contracting game, I'm afraid. Back when I was doing it, I reckoned that I'd earn in 4 months what a permie doing the same job would get in a year and whilst contracting was certainly less secure it wasn't as if permie staff had a 'job for life' either. Therefore, the extra cash more than covered the short term nature of my income stream. As it happened, I got lucky as the economy was in a boom phase at the time and worked for years in a single contract instead of bouncing around between jobs. The client paid steadily less but I got better at negotiating and dealing with the agencies so I actually managed to earn more over time. The amount of gouging by agencies was simply incredible.

They're lucky to have the choice between pay cuts or termination of contract ... still I imagine that such is their immense value-add potential to any business that they'll have no problem skipping off to another higher-paid contract, right? :lol:

I remember around the dot-com bubble every man and his dog was going contracting ( hence the introduction of IR35 ). When the bubble burst it left a lot of people with no work, I know 2 that were unemployed for over 1 year. 1 got a decent job as a team leader, only to loose that 4 years later. Once got a job as a tester....1/3 of what they had earned....but the reality had set in then that they had to get any job. If the banks start laying off their IT staff they wont be getting a new contract anytime soon.

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So the contractors who are actually good take the 4 weeks notice and go somewhere else. UBS then end up hiring new contractors with no knowledge of the systems/business at the going rate, which is what they were paying originally, except now they'll pay for a contractor for 1-2 months for him/her to learn the systems/procedures before being as effective as the contractor they got rid of.... Sounds like a great business plan :rolleyes:

One of the reasons that contractors are able to command a high hourly/daily rate compared to a permie is that they are expected to be able to hit the ground running and do the job more or less from day one. It isn't expected that they will take the same amount of time to become productive as an internal employee would.

As such, you are supposed to already be highly experienced and skilled in the role for which you deploy into. During the boom years this was not the case, I imagine that if the other big London banks copy UBS then we'll see a very big shakedown in IT contracting in London. Lower rates and more highly skilled contractors would be the likely outcome.

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Who wants to work for such people?

http://www.cnbc.com/id/40675799/Wear_Flesh_Colored_Underwear_UBS_Tells_Employees

Wear Flesh-Colored Underwear, UBS Tells Employees

I often wear no underwear at all, which is also flesh coloured I guess.

(I'm a forgetful bicycle commuter often arriving with no spares)

Edited by Terribad
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So the contractors who are actually good take the 4 weeks notice and go somewhere else. UBS then end up hiring new contractors with no knowledge of the systems/business at the going rate, which is what they were paying originally, except now they'll pay for a contractor for 1-2 months for him/her to learn the systems/procedures before being as effective as the contractor they got rid of.... Sounds like a great business plan :rolleyes:

90k sounds like a lot of money, but of you're a good permie in it it's fairl easy to get quite close to that sum including pension etc. The difference is that the contractor can avoid a lot of income tax as long as he/she doesn't end up inside ir35...

That is the problem for companies who do this. The very best, productive and well connected contractors probably will actually be able to go somewhere else and earn the same or more. The ones who cannot will stay and take the 10% cut. Overall the company may save 10% in costs, but loose 30% productivity.

I remember working as a contractor myself, when I and another contractor worked in a team doing the work required. The company implemented a policy that contractors could not be kept on a project for longer than 12 months before permanent staff had to do the work. They ended up replacing two contractors with 7 members of staff. They offered me the highest amount they could to get me to become a permanent member of staff, to which I replied I was not interested in being on the career ladder in the company. I used the money I saved doing that (before IR35) to start another business unrelated to IT contracting which pays me better than the contracting did. I could have had the skills to carry on doing good IT work, but the constant desire to outsource technical work to India made me see the light and give it up completely.

There is no skills shortage for IT workers, just the desire by companies to constantly cut costs and not pay the rate they need to, for the skills they want.

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One of the reasons that contractors are able to command a high hourly/daily rate compared to a permie is that they are expected to be able to hit the ground running and do the job more or less from day one. It isn't expected that they will take the same amount of time to become productive as an internal employee would.

As such, you are supposed to already be highly experienced and skilled in the role for which you deploy into. During the boom years this was not the case, I imagine that if the other big London banks copy UBS then we'll see a very big shakedown in IT contracting in London. Lower rates and more highly skilled contractors would be the likely outcome.

no, the reason contractors are able to command high fees is that some schmuck is happy to pay them.

Bankers need to cut costs....they need to look at what they are getting for their money...in every department....I dont think they even bothered to get good value in the past.

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That is the problem for companies who do this. The very best, productive and well connected contractors probably will actually be able to go somewhere else and earn the same or more. The ones who cannot will stay and take the 10% cut. Overall the company may save 10% in costs, but loose 30% productivity.

I remember working as a contractor myself, when I and another contractor worked in a team doing the work required. The company implemented a policy that contractors could not be kept on a project for longer than 12 months before permanent staff had to do the work. They ended up replacing two contractors with 7 members of staff. They offered me the highest amount they could to get me to become a permanent member of staff, to which I replied I was not interested in being on the career ladder in the company. I used the money I saved doing that (before IR35) to start another business unrelated to IT contracting which pays me better than the contracting did. I could have had the skills to carry on doing good IT work, but the constant desire to outsource technical work to India made me see the light and give it up completely.

There is no skills shortage for IT workers, just the desire by companies to constantly cut costs and not pay the rate they need to, for the skills they want.

There's a shortage for low paid workers.

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One of the reasons that contractors are able to command a high hourly/daily rate compared to a permie is that they are expected to be able to hit the ground running and do the job more or less from day one. It isn't expected that they will take the same amount of time to become productive as an internal employee would.

As such, you are supposed to already be highly experienced and skilled in the role for which you deploy into. During the boom years this was not the case, I imagine that if the other big London banks copy UBS then we'll see a very big shakedown in IT contracting in London. Lower rates and more highly skilled contractors would be the likely outcome.

It sounds like you are someone who's knowledge of IT is limited to posting on HPC forums.

They will be skilled in the topic/field but they still need to learn the systems.

If a company uses SAP they can hire in a SAP contractor but that contractor wont have any knowledge of the way the company have implemented and integrated SAP and how it links to other systems.

If I was coming in as a new contractor, I'd allocate the first month just to get the required access to systems and find out who does what. I'd be absolutely amazed if I was able to log on within the first 2 days.

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If I was coming in as a new contractor, I'd allocate the first month just to get the required access to systems and find out who does what. I'd be absolutely amazed if I was able to log on within the first 2 days.

You must work for some incompetent clients. I'm a permie these days and I'm given a day max to have my workstation installed and set up and am expected to be developing the next day. I'd love a couple of months to "get up to speed" and find out how to log in and post to HPC :-)

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You must work for some incompetent clients. I'm a permie these days and I'm given a day max to have my workstation installed and set up and am expected to be developing the next day. I'd love a couple of months to "get up to speed" and find out how to log in and post to HPC :-)

In big firms you don't get to setup / install your work station.. you raise request and have a tech team doing that for you... so it depends are how quickly that tech team action those requests... and often accounts / permission setup takes days if not weeks..

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It sounds like you are someone who's knowledge of IT is limited to posting on HPC forums.

They will be skilled in the topic/field but they still need to learn the systems.

If a company uses SAP they can hire in a SAP contractor but that contractor wont have any knowledge of the way the company have implemented and integrated SAP and how it links to other systems.

If I was coming in as a new contractor, I'd allocate the first month just to get the required access to systems and find out who does what. I'd be absolutely amazed if I was able to log on within the first 2 days.

+1

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In big firms you don't get to setup / install your work station.. you raise request and have a tech team doing that for you... so it depends are how quickly that tech team action those requests... and often accounts / permission setup takes days if not weeks..

We have 1200 employees. When someone arrives a ghosted (or dd'd) image is already installed on their workstation and they are in LDAP so have access to the basic stuff. At the department where I work we have around a hundred client projects with perhaps a dozen projects active at any one time for a total of 180 staff. For each project we have a "getting started" doc which will give the additional software setup as well as detail access to servers etc. Seriously we expect people to be up and running very very quickly.

I do recognize what you are saying and it is nice the banks have the money to pay someone 600 quid a day for sitting on his **** looking out at the Thames and reading through some manuals.

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We have 1200 employees. When someone arrives a ghosted (or dd'd) image is already installed on their workstation and they are in LDAP so have access to the basic stuff. At the department where I work we have around a hundred client projects with perhaps a dozen projects active at any one time for a total of 180 staff. For each project we have a "getting started" doc which will give the additional software setup as well as detail access to servers etc. Seriously we expect people to be up and running very very quickly.

Being up and running and being productive are two different things.

For example, you can be the bee's knees when it comes to programming, but if you're chucked into a project with a couple of million lines of code, it WILL take you a while to get to grips with it.

The same goes for systems administration, architecture etc etc.

Unless the job/project is completely trivial, it will take a while to get up to speed.

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In big firms you don't get to setup / install your work station.. you raise request and have a tech team doing that for you... so it depends are how quickly that tech team action those requests... and often accounts / permission setup takes days if not weeks..

Agreed but you're kept busy during those weeks as you need to be escorted around the building by permies while you wait for your security pass

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  • 429 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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