It's endemic in the IT industry.

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.

.... 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

Yes its rife within BT. The indian contractors are NOT Specialists which cannot be sourced in the UK market! Its essentially White collar exploitation.

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??

£200/day nah, more like £40/day+exes

The rest gets trousered by the agencies and all the others in the chain.

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.

- they try to hire contractors locally at these low rates, get no takers. See? shortage!

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.

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!

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.

Yeh, of living on lower salaries...

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.

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......?

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.

"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.

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 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.

> 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.