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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  1. Ledswinger Silver badge

    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.

    1. Captain Save-a-ho

      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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        1. Jim 59

          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.

          1. Anonymous Coward
            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.

            1. Jim 59

              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.

          2. Swiss Anton

            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.

      2. Ledswinger Silver badge

        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.

        1. BlueGreen

          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.

        2. Trokair 1

          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.

        3. Someone Else Silver badge
          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?

    2. Anonymous Coward
      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...

      1. Crafty volt 7

        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!

  2. horsham_sparky

    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

  3. auburnman

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

    1. Anonymous Coward
      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.

      1. Tom 13

        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.

    2. Joe Drunk

      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.

      1. Snake Plissken
        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".

        1. Anonymous Coward
          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.

    3. poohbear

      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...

    4. Jim 59

      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.

  4. Anonymous Coward
    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 ..

  5. Quentin North
    Go

    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.

    1. Buzzword

      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.

      1. Anonymous Coward
        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.

      2. Tom 13

        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.

    2. Joe Drunk
      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.

  6. Richard C.

    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.

    1. Snake Plissken

      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.

  7. sandman

    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.

    1. Mark 65 Silver badge

      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.

  8. knarf

    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.

  9. Anonymous Coward
    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.

  10. Don Jefe

    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.

    1. Anonymous Coward
      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...

      1. Tom 13

        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.

    2. Anonymous Coward
      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.

    3. Marshalltown
      Pint

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

      And there you have it.

  11. The BigYin

    To paraphrase Dune

    "The bonuses must flow"

  12. Silver

    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.

    1. Yet Another Anonymous coward Silver badge

      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 ?

    2. Anonymous Coward
      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>

      1. Silver

        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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    4. horsham_sparky

      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!! :-)

      1. Kubla Cant Silver badge

        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.

      2. Silver

        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.

        1. horsham_sparky

          Re: Perspective

          Touché :-)

          Not living/working in London, the ones I know earn considerably less than £500 per day. The additional costs of living in or commuting to London and the more specialist area (banking) probably accounts for the difference.

          However I still stand by the fact your post was misleading as you didn't account for most of the costs contractors face. I regularly get told by permies/managers that I'm a rich contractor (I wish), purely because of this kind of misconception, which tends to get annoying after a while

          1. Don Jefe

            Re: Perspective

            A proper contractor, one who works on a project or problem, then moves on, faces all the challenges of any subject matter expert normally faces, plus all the costs, headaches, challenges and rewards of owning and operating a small business.

            It's that last sentence that's so crucially important and where so many contractors go off the rails. Whatever day rate you set is first a function of expenses, including your salary, then your needs to reach whatever goals you've set for your self/business, an operational buffer (shit will go all screwy, that's a universal constant, prepare for it) and your recurring contributions to your post retirement funds.

            That stuff ^^^^ is how you determine your base rate. Beyond that you crank it up as high as the situation will allow. That amount is your variable, only part of your fee that is negotiable

            Obviously, there are going to be times when you've absolutely got to take a job(s), but you want to move away from letting the client set your rate. That's simply not the path to good work. You, the contractor, control the contractor/client relationship, not the client. They come to you, you don't go to them. Nobody walks into a mechanics garage and says 'Fix my car, the transmission has failed. I will give you $750 for the work.' Not do they do that in a doctors office. Well, I suppose people might actually try that, but it's not going to work.

            If an mechanic or a doctor can set his rates, and control the work he takes, don't you think it is a bit odd that an IT professional can't do that? It's more than a bit odd, really, it's just flat fucked up.

            If you aren't attracting the clients that will pay your fee then go back up to that expenses paragraph and add increased marketing and a higher cost of sales to your figures. You aren't just a contractor or an IT professional, you are also a business. Don't be shy of making your presence known, of emphasizing what you offer, never what the other guy doesn't do. Don't be hesitant to wear a suit and not only look the part of a professional, but to act the part of a professional in naming your price as well, just like with any other profession: The price is the price.

            I don't know everything, and I'm wrong a fair amount of the time, but I do know how to make money as a contractor and I know, without a doubt, that nobody is going to offer you $4-5+ day rates if you don't ask for them. Obviously, you've got to work up to that, but you're never going to get remotely close to that if you are stuck in a retrofitted mail room cubicle and letting the client control your business.

            Clients pay for not only what you do, but what you know as well. You've paid dearly for what you know. I don't know any 6+ figure contractors who aren't licking the wounds of fucked up relationships (the one that got away / divorced them), kids who hate them for never being around and being stressed if you are. Friends are something you vaguely remember, but they only work 10 hour days and have weekends and holidays off, who has time like that? Your house is cool, and so are your cars, but you never get to stay there or drive them.

            Yes, it's your choice to go into contract work and beat the living shit out of yourself, but you're good at it, and god damnit, you're worth your rate. Big executives always cite the pressure of their jobs as justifications for their jobs, and it's true. It's true for you too, never sell yourself short.

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