back to article Barclays warns freelance techies of DOUBLE DIGIT rate cut

Cost-cutting Barclays has incurred the wrath of all its contractors, including techies, by confirming plans to slash rates by ten per cent from next month. This is the third cut to IT freelancers in as many years, say our sources, and comes as the business prepares to wave goodbye to up to 12,000 workers worldwide including 7, …

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Meanwhile...

They increased the bonus pot by 10% year on year to a nice fat £2.4 billion.

Barclays techies, I'm sure your noble sacrifice will be appreciated by the truly deserving and value creating types who are dipping into that bonus pool.

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Re: Meanwhile...

What a fat load of bollocks. Bonus pools and noble sacrifices don't enter the picture where contractors are concerned. So your client is deciding to squeeze you on price? Fine, the project ends early at their behest and you find someone else who needs your help. And if that's not acceptable, you shouldn't be a contractor.

I'm sure any second you'll give some diatribe about the evils of capitalism and how contractors should unionize to fight such practices. Meanwhile, those people willing to contract their services are the very epitome of the capitalist that you hate so very much.

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Anonymous Coward

Re: Meanwhile...

"plans to slash rates by ten per cent from next month"

Good luck with that when market rates have risen by > 10% over the last year. Glad I don't bank with Barclays. If you do, best make sure you have some contingency measures in place for when it all goes tits up...

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Re: Meanwhile...@Captain Save-a-ho

"very epitome of the capitalist that you hate so very much"

How lucky I am to have such clever people like you to tell me what I think.

Actually, on second thoughts, no I'm not lucky, because you're an @rsehole who doesn't know what I think, clearly hasn't paid any attention to the span and content of my previous posts that might give a reasonable clue to my opinions and politics, or indeed paid any attention to the post you're angrily responding to. And what's more you're either a Merkin, in which case you're hardly able to offer a valid opinion in a UK forum on matters in the UK involving a UK company, or alternatively you simply can't spell. I'll presume the former until proven otherwise.

So perhaps you should take your ill thought, reactionary extreme right wing opinions and go find somebody to educate you on how markets work. And don't forget to ask about economic history, and how the combination of the banker-dominated Federal Reserve and the unfettered capitalism of US banks caused the biggest financial crisis of all time, largely because the bankers were chasing bonuses to make themselves rich at the expense of everybody else. If that's the world you want, I'm afraid it was given a chance, and found wanting.

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Re: Meanwhile...@Captain Save-a-ho

> caused the biggest financial crisis of all time

Has it? The imbalances are still present and have been allowed, even encouraged to grow further by QE and other bollox policies that turned a real crash into a fender bender but kept the car on the road and jammed the foot back on the pedal like some hollywood disaster movie. The *real* crash hasn't actually happened yet.

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Re: Meanwhile...

Come on people, enough with the Barclays bashing. The bank needs that money to pay off its 290 million pound fine for covertly fiddling the Libor rate, and to fend off pesky Africans seeking reparations for Barclay's support of the SA apartheid regime in the 1980s (Wikipedia), and also to lend hard cash to your friend and mine, Mr Robert Mugabe, who is a nice bloke, except when he is driving hundreds of thousands from their homes or changing the law so he can shoot dead (newzimbabwe.com) any citizens who approach his residence. Heck we have all done that.

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Re: Meanwhile...@Captain Save-a-ho

"And what's more you're either a Merkin, in which case you're hardly able to offer a valid opinion in a UK forum on matters in the UK involving a UK company, or alternatively you simply can't spell. I'll presume the former until proven otherwise."

Oh stuff it will you. We aren’t all semi-conscious mouth breathers and I was actually on your side of the argument until you had to inject this drivel. As a matter of fact, anyone can have a valid opinion on any forums for any matter in any country. You tosser.

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Stop

@ Ledswinger Re: Meanwhile...@Captain Save-a-ho

And what's more you're either a Merkin, [...]

Hey, don't foist him (her?) on us...What makes you think we want him?

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Anonymous Coward

Re: Meanwhile...

Yeah, it's not like New Zimbabwe makes anything up. Oh wait, that's a US mansion they're writing about.

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Re: Meanwhile...

Barclay's was a bank back in 1736. The slave trade in the UK wasn't abolished until 1833. Today it was reported that "Caribbean nations prepare demand for slavery reparations" (http://www.theguardian.com/world/2014/mar/09/caribbean-nations-demand-slavery-reparations).

Now was Barclay's involved with the slave trade? If so they may need to set aside some money for some reparations as well.

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Re: Meanwhile...

Now you come to mention it AC, I can't find any other source for the newzimbabwe.com story. On the other hand, I was in Zimbabwe myself in about 2000, saw his motorcade passing, and was warned by others not to enter the streets near Mugabe's palace as you risk being shot.

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Re: Meanwhile...

They always did believe if you pay peanuts you get monkeys. The Simian pool must be getting thin over there for this step!

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Ironic

I'm electronics design contractor.. ironically my business account is with Barclays! time to reconsider if their IT is about to go down the sh***er

sounds like Electronics contracting is different to IT contracting, I've never had to drop my rates.. Although I do move around every year or two to ensure I keep getting market rates (companies never voluntarily increase their rates unless they're desperate to keep me) and to make sure I fall foul of IR35

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The contractors should simply reduce the level of service they provide by an equal percentage in turn.

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Anonymous Coward

No, anyone who's any good will reduce the services provided by 100% and then watch the Bank scramble to re-hire them at 110% of their previous rate.

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The reality is those who can will move to more lucrative contracts while the remaining staff will have to perform double the amount of work. The stack of CVs with desperate candidates who meet your qualifications is taller than you.

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Make that 120% of their previous rate. Just to remind them that when re-negotiating rates, it is better to discuss the new rates than simply announce them.

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Mushroom

Judging by the fact that I get approached by recruiters to contract for Barclays about once a month, I'm not sure that pile of CVs is quite as high as you think. I'm sure my phone will be ringing multiple times over the next few weeks and the answer will still be a curt "No".

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Anonymous Coward

"Judging by the fact that I get approached by recruiters to contract for Barclays about once a month, I'm not sure that pile of CVs is quite as high as you think. "

Actually, in my experience it is - just that the turnover is also comically high. I left there four months ago and every vacancy was deluged with quite attractive candidates leaving the hiring managers to be stupidly picky.

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Mmm

I had exactly the same idea today ... a customer wants to 'negotiate' a 1/3 reduction in my rate because they're struggling. After much thought, I've concluded that he actually wants me to work 1/3 slower. Which is doable, I suppose...

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Cutting contract rates

Business is business. If Barclays wants to cut rates, the contractors should, if they choose, serve notice on the contract or decline the next renewal. In the current economy they won't have a problem finding work, and a rate increase, and by declining Barclay's offer they will help to improve rates in the wider industry. Sorry if that sounds like price fixing, which is something Barclays has never been accused of. Well not since this morning anyway.

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Anonymous Coward

So that's 200% bonuses for the people who f***** up the bank and a 27% cut for those who've kept it going.

Makes complete sense ..

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Banks don't understand IT staff

In my experience, IT contractors with Banking experience are always in demand and IT staff are generally quite intransigent on principle. if there is sufficient rage IT staff will just quit to spite the organisation that chose not to recognise their value. Could be a difficult time for Barclays IT systems ahead with the result that Barclays will have to spend money on attracting new contractors and probably offer higher rates to attract them.

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Re: Banks don't understand IT staff

If it's their third time trying this on in as many years, then they've presumably realised that they can indeed get away with it.

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Anonymous Coward

Re: Banks don't understand IT staff

... until their systems start falling over and everyone who ever knew how to fix them has already walked out the door.

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Unhappy

Re: Banks don't understand IT staff

You're correct on both counts - IT staff with banking experience are always in demand and banks either don't understand or are indifferent to IT staff. I am inclined to believe it's the latter based on treatment of IT workers. I disagree with your view that IT workers, especially contractors, are willing to sacrifice their livelihoods to prove a point or force senior management to recognize the value of their contributions to the company. It certainly doesn't work that way here in the US nor has it in the past decade. Aside from the few unionized IT shops I've worked with there's only two entitlements that have been recognized by myself and fellow contractors.

One is your paycheck and the other is that no matter how much your performance is lauded by the firm you work for you can still come to work one early Friday morning and find your ID badge doesn't let you in the building anymore.

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Re: If it's their third time trying this on in as many years

No they can't. If they could, they wouldn't be trying it a third time.

Repeating the same process that previously produced no or bad results is the very definition of insanity.

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Assumptions

I'd be tempted to write back to Barclays and saying you, as a contractor, are increasing your rates by 200% with a minimum of 3 month break clause and that you will assume they accept these terms unless they write back to you in X days. After all, if assumption is good enough for them.... I'm actually tempted to write to them that I'll become their CEO in 28 days and assume they accept that unless I hear back by the end of the week.

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Re: Assumptions

In my experience, Barclays are very upfront with the terms of their contracts. You have to give them two weeks notice, they don't have to give you 60 seconds notice. They have always been explicit about it.

On the one hand, you know where you stand employment wise, on the other you know exactly where they stand in their attitude towards their staff.

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Short-sighted

As a contractor you know you have little or no protection against rate cuts, etc. If you feel strongly about it you just find a better contract (this works best when times are good obviously). The problem for the company is that the more experienced contractors (those in most demand) leave and are replaced by less experienced ones. This causes delays and other problems while the new guys get up to speed. It's not a great way to ensure critical projects are finished on time and to a high enough quality or that the infrastructure continues working smoothly.

This kind of myopic short-termism isn't a great incentive to go and work for Barclays.

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Re: Short-sighted

Yep, when you cut rates you just get to keep the shit as the capable are already out of the door. That's capitalism for you.

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Oh Well...

The really good guys will leave quickly for better rates, while the bad will hang about and moan. Don't like your customer then find another. This is independent companies here NOT employees and most contracts can be terminated with in a week or so on either side. It is shit but it will be the middle management that will suffer all the pain as contractors leave and deadlines that can't be meet.

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Anonymous Coward

When I worked at Barclays, about 80% of the IT staff were contractors. Many of them had been there 15 years or more and were the only people that actually understood how the creaky old COBOL systems worked. The other 20% were junior staff who hadn't yet gained enough experience to go contracting.

The staff should call management's bluff on this one. Barclays couldn't last a week without their IT contractors. They'll be forced to re-hire them a couple of days later at double the rate.

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Dangers to Projects?

Why would any projects be threatened if contractors leave? It isn't exactly difficult to find good IT contractors you know. The ease of finding good contractors is one of the major downsides to working in over staffed job sectors.

That being said, most of these jobs aren't actually filled by contractors. They're filled by what should be called salaried staff. Fuck Barclays and all the other companies that have played a part in forcing people to be contractors but treat them like regular staff with regular staff pay. That was bullshit years ago and it's bullshit now.

Most people aren't cut out for proper contracting and it's even more rare to find managerial staff that can deal well with contractors. There's nothing wrong with that! Proper contractors are the equivalent of a No. 12 Grain Shovel with a propane powered telephone pole auger in the handle. They're rare and seldom used. If an an ultra specialized tool like that is something you use a lot it's nearly guaranteed there are far bigger problems in your organization that need immediate attention.

Selling staff on the idea that contractors lead some kind of mercenary/gunslinger existence and have lots of freedom has always pissed me off. Sure, proper 'one problem' contractors do lead such a life, but the price those contractors pay is huge. To fit that role well you've got to have so much experience that retirement and estate planning are actually significant concerns. If you're up there with the $5-6k day rate, having a family is for all intents and purposes just a checkbox on insurance forms. I could never have married someone I actually cared about when I was working as a contractor. Never met anyone different in that regard either.

This whole fucking plan is unacceptable and shouldn't even be legal. You want contractors you treat then like contractors, short term, high pay. If you want staff you treat them like staff, long term, stable pay. You don't go mixing the two together just so you can yank the rug out from under them. It simply isn't an honorable way to act.

As much as I would like to say I hope every last one of their projects falls apart due to staffing issues it rarely works that way. Historically, companies that do shit like this develop some sort of cosmically fucked compensation arrangement where a few people will make good money, and everyone else makes far less than ever before but have the 'opportunity' to make more if performance is good enough. The inexperienced and the desperate always charge into those arrangements with the highest hopes and are drained and discarded as quickly as they come in.

Companies who treat staff like contractors have already proven they are dishonorable, don't go thinking that will change with a 'new approach'. Fuck those companies. Fuck them seven times with a flaming donkey dick. Laying siege to bad employers should be an inalienable right.

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Anonymous Coward

Re: Dangers to Projects?

"It isn't exactly difficult to find good IT contractors you know."

You usually have to pick through a lot of low grade imported chaff to get to the wheat - and it IS difficult to find good, available AND cheap IT contractors...

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Re: good, available AND cheap IT contractors...

When I worked in a screwdriver shop we had a saying about buying your next PC: price, power, or quality: Pick two of the three as you can't have them all. Same thing applies here.

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Anonymous Coward

Re: Dangers to Projects?

In my experience (10 years an Windows Support contractor before I took the poison pill and went permie) a lot of companies use contract workers in place of permanent staff because they're quick to hire, easy to get rid of in lean times, and crucially for the bean counters can be charged to projects and capital expenses rather than being a revenue drain like full-timers.

I've always said if you've got a contractor for more than a year then you should have hired a permie in the first place.

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Pint

Re: Dangers to Projects ... isn't an honorable way to act.

And there you have it.

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To paraphrase Dune

"The bonuses must flow"

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Perspective

Whilst I fully accept that a pay cut is never a nice thing, it's worth noting that a £500 per day contractor working 225 days (which is (365/7)*5 = 260 - 7 days unpaid sick and 28 days unpaid holiday) will earn £112,500 a year.

Admittedly that is without pension, private healthcare and life insurance - but they won't make that much of a dent.

For those on £700 a day, that would be £157,500 and place them in the top 1% of earners in the UK.

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Re: Perspective

Capitalism would suggest that if you are paying somebody in the top 1% of salary then it is because you need their skills and you can't find anyone to do it cheaper.

So logically if they walked out the door you would be in trouble.

If it was easy to just pick up the phone and replace them with staff willing to work for 600quid then why haven't you already done so ?

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Anonymous Coward

Re: Perspective

<sarcasm>

And those earning £20,000 per day would put them on 20,000 * 225 = £4,500,000.

Wow! Who knew these guys earned so much money - lets take it away from them eh?

Lets breach their contract and really fuck them over a barrel because they definitely don't deserve to earn what they're worth...

</sarcasm>

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Re: Perspective

Why don't you actually talk to some IT contractors and find out how much they're paid? 'cause frankly I seriously doubt there are many earning that level. Most will be between the £300-£400 mark per day, see

http://www.contractoruk.com/market_rates/

As a highly qualified, and in demand Electronics Engineer (there's a shortage of us in the UK), not even I earn as much as £500 a day, nevermind £700 a day!

You also didn't add in corporation tax (20%), PAYE (yes, most contractors DO pay this, myself included). Add in some travel and lodging expenses (a lot of contractors like myself go where the work is, and that means local accomodation during the week and long drives at the weekend). So if they're doing well, they might net between £50k and £70k per year, assuming they work all year around. Take away pension contributions, healthcare, professional indemnity insurance, end of year accounts and tax returns, etc etc etc, then I think you'll find contractors are not the extreme high earners that you make them out to be

Please get your facts straight before posting stuff like that, you only reinforce the misconception that we contractors are earling loads'a'lolly... though we would if we could!! :-)

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Re: Perspective

I don't doubt your income numbers calculation, but you do seem to be missing a couple of outgoing numbers.

No mention of accountancy charges,

public liability and or indemnity insurance (Yes you might be able to run without them but suppose you're client wanted sight of a policy).

Self training\certification (fancy a Cisco\MS\Oracle job sign here pay a fortune and not earn whilst training) with no guarentee of work as a newbie

Supplying your own equipment software. (Ok BYOD is catching up on this one.)

On those income numbers you would expect a raft of other hidden benefits in the permy package,

Car and or rail travel paid\loan subsidies.

Free Parking

Optical plans

Luncheon Vouchers (do they still exist ?)

Did I mention training (someone else pays whilst you still get paid.) with the likelihood pf immediate experience, that's why they sent you on the course.

If working in finance then some form of golden handcuffed discounted mortgages. Possibly available from day one as a permy

Working as a contractor you may even be chaged a higher rate and then only after a couple of years of audited accounts.

A VAT inspection demanding payment for the previous couple of years (happened to a friend of mine after duff accountants advice.)

Suddenly finding that IR35 has kicked in.

No Access to some benefits as a schedule 'D' payer..

Where is my next contract coming from. Every month out soon eats into the cash pile and 3-6months is not unknown..

And the Big One built in obsolescence. that skill you were superb at 10 years ago is no longer used. You missed the boat on retraining, the kids around you are much quicker and more nimble and the traditional route of promotion to manager isn't available because you're a contractor.

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Re: but they won't make that much of a dent.

I don't live in the UK so I don't know what the real tax rates are on contractors. The one thing of which I am sure is that you are even more clueless than I am about those rates.

A decent pension requires you salt away at least 10% of your salary each paycheck. In the US, employers typically match that 10% with another 5%, so as a contractor you need at least 15%, 20% if you want to give yourself a cushion for the lean times. On top of that you need to be salting away a similar amount of money for the times when you are between contracts. so that's 30-40% of your so-called sweet contract gone.

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Re: Perspective

@horsham_sparky - You are mistaken. £500 per day is mid-to-low for IT contractors in London banks.

I've never been on the wrong end of one of these rate cuts, but it's been in the air, and I've naturally considered my response. Even with a 10% reduction in effort I'll still be more productive than the permies, and I can spend the 10% of time I've freed up to look for another contract at leisure.

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Re: Perspective

Lets breach their contract and really fuck them over a barrel because they definitely don't deserve to earn what they're worth...

The whole point of being a contractor is that you're a flexible, disposable, short-term resource. As compensation, your day rate is significantly higher than a permanent equivalent.

If you'd rather something more stable, then go permanent and accept that you'll get paid less. You can't have it both ways.

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Re: Perspective

Why don't you actually talk to some IT contractors and find out how much they're paid? 'cause frankly I seriously doubt there are many earning that level. Most will be between the £300-£400 mark per day

I work in Financial Services and the majority of IT contractors I know earn at least £500 per day. I have to do the budgets for the ones in my team.

As a highly qualified, and in demand Electronics Engineer (there's a shortage of us in the UK), not even I earn as much as £500 a day, nevermind £700 a day!

Right, so because someone who is in demand in a completely different profession doesn't get £500 per day, it's not possible for someone else to do so?

Please get your facts straight before posting stuff like that, you only reinforce the misconception that we contractors are earling loads'a'lolly... though we would if we could!! :-)

And by "we" you actually mean "we Electronic Engineering contractors who don't work in a bank", right?

Because that appears to be your only frame of reference here.

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