UK contract IT staff at Swiss bank UBS have been given the choice of taking a 10 per cent pay cut or receiving four weeks' notice. UBS informed outsourced workers that due to the current economic climate, it had decided to reduce rates and those who did not want to accept the new rates would be let go, with some given less than …
Same old story
"However, speaking in general, Roy Grimsey, director at Harvey Nash, said that wage reductions for staff, whether contract or permanent, could be useful in the current climate"
Assume by "in general" he means other people taking a pay cut not actually him!
Pay cuts are always acceptable..
...a long as they're not happening to you.
How appropriate, grimey little parasite. "How much are you reducing your cut by?" would be my first question for him...
Cutting wages is the easiest way for managers to earn bonuses
Cutting the wages of underlings is the easiest way for managers to earn bonuses.
Times are tough, we need everyone to make sacrifices, following by an annual report indicating executive bonuses bumped up 50% due to increased profits.
directors probably already took one, surely
directors and management were the first to take pay cuts at the large electronics manufacturing business I work for. surely the bank bosses have shown the way too?
We took a pay cut in our division of the business. rather that than lose the business and my job. A part of the business didn't take the pay cut. they're closing now, all of them lose their jobs.
Of course, the agency could deal with this
By only taking 15% rake off instead of 30 - cynical, moi?
HN have in the past taken some quite brutal cuts in their rates in order to keep business and undercut the opposition.
Ah but were is the cry of
Ah but were is the cry of "Oh but there important banking staff and we have to pay them market rate of silly money or they will go elsewere" aka the bankers that messed up. No, not those type of bank employee's/staff, job descrimination heh.
Still at least the goverment can use this approach to get out of there contracts, indeed in any other form of business wouldn't this be deemed office bullying or indeed blackmail givin do this or we will release this for there own personal gains. Ok the release part is you, but its still releaseing something that will have a fiscal detrement upon you unless you do something that casues them fiscal gain whilst incurring discal loss in proportion to there others gains.
One can wonder if such a cut would take some external EU worker below the I'm a professional level of income and as such mean they don't get to work in the UK, unlikely but technicaly possible and indeed potentualy abusable.
Either way sucks to be UBS - U Been Screwed.
The word is "where". "were"?
Hear, their and every were ...
What on earth are you on about?
I <3 agencies
"both of which told the Reg they could not comment as UBS was one of their biggest clients"
So they're saying they would comment if it was about a small client?
Shoot them in the kneecaps
If you're in the mob, that risk comes with the territory.
Claw Back ?
"also gives them the ability, when better times return, to claw back some of that money"
How exactly ?
UBS should ask their providers of staff to take a 10% cut *and* to provide continuity of service. i.e. if they reduce their cut and their contractors take a cut there is a chance they'll get to keep the same people. The agencies that want to pass on the entire cut will have a higher attrition rate - UBS should use those agencies less.
agencies. high rates - no value add.
I know how they could 'claw back' some of that money
I hear the price of gold is at a record high at the moment. I heard somewhere that they might have some that's been sitting around in the vaults for the last 70 years or so...
Ces't la vie
This is part of being a contractor. You are disposable, hence the higher rates in the first place. Any contractor worth their price will walk into another contract. If they don't, they were probably overpriced in the first place.
The contract market is booming - two offers and a renewal in one week, and I wasn't even looking to leave.
I became a contractor a year ago having been replaced by three Indians. One of the offers was to go back and do my old permie job as a contractor at three times the money - I'm worth nine Indians :)
The bean counters will never learn.
I've seen this happen before. Good contractors leave, leaving behind many also-rans who now cannot hide behind the work of others, productivity drops off a cliff.
Not saying this will happen in this case, but it *has* happened exactly like this before.
As a contractor of several decades standing, my response to any attempt to reduce rates is "Bye-bye", especially if it's done mid-contract. At renewal, well, fine, it's just part of negotiations, but there is a contract in place for a reason, and attempting to reduce the rates paid is a breach of contract.
I thought it was a joke at the time...
"If you're not embarrassed to state your rate, you're not charging enough"
Sorry Geoff - that one just stuck in my head for some reason.
Doesn't anyone notice the Swiss franc's state??
Anybody that's ever been to Switzerland will tell you prices are ridiculous, making Oslo look like package holiday territory. And it has gotten worse recently... The last two years the Swiss franc has gone up by some 60%.
So if you're paid in Swiss francs but are an expat, then you're funnelling off quite a lot into Euros or Pounds, and have in effect had a giant payrise. [Example: work in Geneva, live in France (easily just 25min away from the diplomatic zone) -- so you pay mortgage/rent in Euro, food in Euro, council tax in Euro, ... . Bingo!] So a 10% cut in a tough jobmarket is not such a difficult choice [but 24h decision time is inhumane, human rights court territory].
Conversely, UBS charging for their services in Swiss francs: they've eaten deeply their competitive edge through no management decision of their own.
This of course only holds for Swiss units, not London-based ones.
The clue is in the article
This is about the bank's *UK contract staff* - you know, the ones working in the UK and (presumably) paid in sterling, and paying UK taxes...
The article did say
that take a 10% cut or get your 4 weeks notice, which is how they get around breach of contract.
Them: Take 10% cut
you: That's a breach of contract - clearly states that I have x months @ x per day here
Them: Also clearly states that we can give you 4 weeks notice and here it is...
But I agree with others, any contractor worth his salt will walk out and into another job - there are plenty around at the moment.
Yes Sir... Thank you Sir...
"Could be useful" in helping to shore up the coffers of the higher ups?
IT really is taking a battering. I keep seeing job adverts for 2nd line IT support that include duties that are more applicable to 3rd line support and the wages offered more applicable to 1st line support bods. I particularly like the ones where you need your own car as 'lots of travel' is involved and are offering £18k. I bet they are bastards to get mileage allowance from too.
Woo yay, for the IT skills shortage in the UK!
Same old UBS
They did the exact same thing late in 2001. Obviously the Nazi gold must be running low ...
Par for the course I guess
Of course if they have for example 3 or 6-month contracts there's probably some penalty clause to releasing them early, so anyone who is really good would just refuse the pay cut, cash in on the early release penalty fee and get a contract for the same rate somewhere else.
And of course I'm sure the big bosses in the banking and investing part of the business will share the pain by taking a 10% cut themselves. What? Oh!
The Contract Market is bouyant.
So let UBS let have all their good contractors walk straight into other contracts at their competitors.
Meanwhile UBS keeps the dross and have their critical infrastructire systems start falling over.
Re: The Contract Market is bouyant.
> all their good contractors walk straight into other contracts
One would assume that if UBS are having a tough time, that this has already happened - maybe for several cycles of "good" contractors.
Do 10% less work while you focus on finding a new contract
24 hours to decide?
Two can play at being unfair, and being a Swiss banker is not a prerequisite.
Do 10% less work while you focus on upgrading your skills and finding a new contract
If your contract is with Harvey Nash, not UBS...
...why would anyone take a cut? If you have any brains at all go to Harvey Nash, show them the schedule on page 1 of your contract and tell them to take at least half of the cut. And if they say no, Lloyds are hiring....
to take the passwords with you when you leave.
@P Saunders - I'm guessing you are a permie? Any contractor that had that kind of attitude (assuming you aren't joking) isn't a professional.
You know what they say about those.
Well, I said assuming because the side icons don't load up, so I put that there in case it was obvious to everyone except me that you had issued a joke comment.
Rates are based on level of skills and duration of the contract. If the client suddenly wants to change the terms and renegotiate in the middle of the contract, you can either let them or walk.
As a consultant, if my client did this to me, then I'd walk. By not honoring the terms of the agreement, your word becomes worthless and the trust in the level and quality of your work diminishes. How would UBS feel if you suddenly stopped work mid-contract and took a job at a different company for a higher rate?
Consutlants/Contractors have to be prepared for this contingency so that they don't make a rash decision. 24 hour notice? The first thing you do is pack your cube up and be prepared to leave.
UBS will more than likely attempt to offshore their work, regardless of the knowledge, skills and quality of the results. It may save money in the short term, but when your calculations are off or you miss an opportunity because your code didn't perform in a low latency environment... What's a couple of million of quid these days? They saved money now didn't they?
possibly what the UBS IT bods are thinking right now
with apologies to Fight Club
Look, the people you are trying to reduce the salary of, are the people you depend on: we manage your servers, we de-spam your emails, we guard your data, we run your PABX, we guard your systems while you sleep. Do not fuck with us.
... if everybody on the IT staff hand their notice in simultaneously? UBS make their cuts and the employees make their point. Everybody wins. :)
Seriously, some sort of protest is warranted here, big time.
permie person here looking to do contract for 3-6months anyone suggest a good contracting sites?
(not HNash or Google thank you please) that I am unware of, to point me in the right direction please?
this has not been a good week or two for contractors or finance people + recruiters now has it UBS/RBS+Hays.
all the best
You may want to visit ukcontractor.com as well and follow their guidelines on constructing a CV
Dear Sir R. Spoon
May I commend you on your unflinching and unfailing attention to good manners and politeness. I shall embark immediately for ukcontractor.com as I have, thus far, remained unaware of its munificent opportunities.
Your obedient servant,
Contractoruk.com, I think.
If you're going contracting...
...get the best advice you can from professional contractors. Start at www.pcg.org.uk with PCG's Guide to Freelancing.
But I would say that, wouldn't I.
"Of the expected 3,500 staff reductions, approximately 45 per cent will come from the Investment Bank, 35 per cent from Wealth Management and Swiss Bank, 10 per cent from Global Asset Management, and 10 per cent from Wealth Management Americas," the bank said.
And 0% from the people who actually caused the problems in the first place.
If the workers have a contract, then they have a contract. If they want to renegotiate, then they can do so. But I for one would be straight on the phone to my lawyer and be preparing a case for unfair dismissal and breach of contract.
Stuff like this sucks big time.
Contractors aren't employed by the client so they can't be dismissed. All contracts have get out clauses for both parties, call in the lawyers if you like but you'll lose.
I've survived a few sabre waving rate cut threats and I suspect this is much of the same. Asking for a response in 24hrs seems to be a way of frightening the insecure. Personally I'd politely decline the cut and if they insisted I'd walk.
> But I for one would be straight on the phone to my lawyer and be preparing a case for unfair dismissal and breach of contract.
Nice thought, but unfair dismissal doesn't apply if you're not an employee. And it isn't breach of contract as the alternative to the paycut is four weeks notice, which is presumably the notice period specified in the contract.
(IANAL. Contractor of 15 years)
Here's what you do
Yes Mr Agency idiot I'll take a cut. I'll take a ten percent cut in my weekly rate (day rate x 5).
However I will need a 20% reduction in my hours which is only fair as the cost of living in London is rising rapidly. So I'll have every Friday off thank you very much.
In other words a four day week for a 12.5% increase in day rate.
Business is business
Contractors are independant businises, just like RBS. They could adopt a similar stance. Accept the offer, find a new contract, then give the client a similar ultimatum, with 12 hours to decide, ie. they must agree to a 10% price increase or else. However, this is a silly way to do business. RBS are being silly, and could suffer if they acquire a reputation for sharp practice. Ultimately, contractors will just see them as a risk and charge more to cover it.
translation matrix activated
please re-read the post
RBS != UBS
(although RBS have done this in the past, just not in this instance)
Any contractor worth their salt will tell the agency or the end client to get stuffed. Those with fewer skills or less confidence will agree to the cut.
Worst case the end client saves 10pc but loses a lot of their most skilled resources who walk and end up in another contract quickly. I'd rather work somewhere else for 10pc less than sacrifice my integrity.
You'd think an investment bank could do the risk calculation here and see it's not worth it.
Well done, this isn't even in the Swiss press today.
First reaction is that the idea could be to motivate the UBS interns by sharing the pain. 210 in the HQ admin are to go, of 400 Swiss cut-backs according to a statement of a week ago.
Second, as Chris W points out, if there are foreign contracts in CHF, this has risen in value over 10% this year against major currencies, maybe nobody is losing, and it could come out of the currency gains.
Third, there will be a lot of post-2008 bank regulation projects in the late stages of IT implementation. That's a poor time to force IT wage cut proposals through at any bank.