back to article HP offers contractors a choice: 5 per cent pay cut ... or 100 per cent

HP has told some IT contractors to expect at least a five per cent pay cut as it looks to eke out cost savings across the organisation. A letter sent out by IT employment agency Advanced Resource Managers (ARM) IT Ltd last week to the behemoth's field of techies confirmed HP's intent to end-of-life its existing Enterprise …

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      1. Sir Runcible Spoon

        Sir @ Mark65

        Most companies are loathe to do this these days. It happens once in a while but certainly not the norm. No company wants the headache of managing 20+ (or however many) separate sub-contractors.

  1. Anonymous Coward
    Anonymous Coward

    "i work on this basis....you want to pay 5% less then I will work 5% less."

    I'd happily pay you 100% less then - there's the door.

  2. Gary Riches

    It's simple enough to just leave. There are plenty of contracting jobs around at the moment.

  3. Anonymous Coward
    Anonymous Coward

    I worked a contract that did this

    and whilst 90% of the contractors agreed to the terms on the day pretty much all of them left as soon as they could arrange alternatives, leaving the client company up sh1t-creek IT wise for months afterwards. In the end they had to hire more contractors to cover the backlog of work caused by their existing ones walking away and taking historical knowledge with them.

    So HP IT, expect projects to fall behind and open help desk calls to increase in number, leading to any savings made being spent anyway to bring everything back into balance.

  4. Anonymous Coward
    Anonymous Coward

    You get what you pay for

    Fine - you pay me 5% less, I work 95% as hard. I'll still outperform your offshore permies by a substantial margin. (To be fair, I probably out-cost them by a substantial margin, too.)

    I can devote the spare 5% capacity to looking for another contract. And I can start saying "Yes" to the agents who are forever asking if I might be persuaded to leave before the end of my current contract.

  5. Anonymous Coward
    Anonymous Coward

    "I'll still outperform your offshore permies by a substantial margin."

    Ok - so you do 20% more work for 400% more pay - value?

    1. asdf
      Thumb Down

      depends

      If it is for a profession developer the question is you pay %400 more initially for code that is done in half the time and costs %400 less to maintain in the long run before you even get to the quality difference.

  6. Anonymous Coward
    Anonymous Coward

    "pretty much all of them left as soon as they could arrange alternatives"

    Or maybe that's what they want - when a company is not doing so well they will probably look to bin some expensive contractors rather than permanent staff. Not sure why contractors whinge about this - it's the 'nature of the beast' and you get paid more but accept less job security.

    1. Vic

      > Or maybe that's what they want

      Not for contractors.

      If a company wants rid of a contractor, it can simply terminate his contract. There might or might not be some nominal notice period, buyt it's rarely very much. Contractors don't get redundancy pay.

      If the company just pisses off its contractors to get rid of some, it will lose those who can most quickly get new contracts - that's invariably the best ones, the ones you actually want to keep hold of.

      Vic.

  7. Anonymous Coward
    Anonymous Coward

    "I can devote the spare 5% capacity to looking for another contract. And I can start saying "Yes" to the agents who are forever asking if I might be persuaded to leave before the end of my current contract."

    Agents are even more mercenary than you. I have seen this many times with colleagues and contractors I have employed - the agent wants their fee for placing them and then starts looking to move them on after 3-6 months.

  8. Spudbynight

    Contractors moaning - say it isn't so!

    Hmm....contractors will often earn twice what the local permies will earn. (Nevermind the guys in India)

    Why do they moan at least 3.4* times as much as the permies?

    It isn't unusual to see a guy performing a 60k a year perm job and earning 120k a year as a contractor - plus all the nice tax breaks.

    *Stats from survey conducted in 2011

    1. NinjasFTW

      Re: Contractors moaning - say it isn't so!

      hmmm yes and no.

      They do get more up front (although I have never seen 2x and i've been on both sides of the fence)

      but they don't get holidays, sick leave, maternity/paternity leave, insurance, pension etc.

      I contracted for 8 years and I always avoided holidays because I would mentally be calculating how much it was costing me for the holiday and lost wages etc.

      I did enjoy contracting but once junior came along it was hard to risk not having guaranteed work :(

      1. JetSetJim
        Thumb Up

        Re: Contractors moaning - say it isn't so!

        > I contracted for 8 years and I always avoided holidays because I would mentally be calculating how much it was costing me for the holiday and lost wages etc.

        I do the same and I'm only 3 months in to my first ever contract after 12 years as a permie (and with 2 young kids - such is life, not many choices open for me...). Anyway, I just factored that in to my expected earnings for the year before accepting the contract (not that I had much choice in the matter, but it sets my expectations, at least) - i.e. assume a day rate of whatever and multiply up by the number of work days your typical permie works in a year, allowing time off for holidays. I don't expect to go on 5 weeks of holidays this year, so anything more is a bonus (or I'll get ill and wipe out the advantage as I naively forgot to include that in my calculations!).

        1. Sir Runcible Spoon

          Sir @ JetSet

          You should be factoring your equivalent annual income based on 48 weeks at your rate (that's the norm when calculating annual salary as far as I can tell).

          Also, you should be working your nuts off to save at least 3 months worth of bills/mortgage etc. for when you are out of contract - preferably 6 months...and don't touch it unless you need it!

          Ordinarily that would be 2p worth, but since I'm a contractor you can send me a cheque for £3,280 please, plus 20% vat.

  9. Anonymous Coward
    Anonymous Coward

    Missing the point

    "Or maybe that's what they want - when a company is not doing so well they will probably look to bin some expensive contractors rather than permanent staff. Not sure why contractors whinge about this - it's the 'nature of the beast' and you get paid more but accept less job security."

    The rehires were taken on at roughly the same rates they had been paying the contractors that left....BEFORE the rate reduction. In the meantime the only people that suffered were the company's own user base, until finally they agreed to increase the headcount of contractors in order to get the work done. So who actually suffered? The people making the money that paid the IT department.

  10. Alan W. Rateliff, II
    Paris Hilton

    Meg must be mistaken...

    We've been in a recovery now for two years. Their arguments are invalid.

    Paris, in a perpetual state of recovery.

    1. N2

      Re: Meg must be mistaken...

      Correction

      We've been in a recession now for twelve years

  11. asdf
    FAIL

    another HP fail

    Didn't see if this in England only. If they are doing this in the US then they are stupid as usual. The hiring market is really picking up again (recruiters bothering coders again). Wage cuts generally aren't the best way to keep your already over extended work force and considering in most companies I have seen contractors do most of the work while the regular employees are in political meetings all day it probably won't help the bottom line in the long term. But then again when your upper management spends over a billion dollars on Palm and then gives up on in a few years and gives it away for free the long term isn't that bright any way. Thank god for the ink I guess.

  12. Anonymous Coward
    Anonymous Coward

    WTF

    Have they got any staff let alone contractors left to make redundant based outside of India?

  13. Reg T.
    Flame

    If these lot

    are the same folk who write the worthless software for HP printers, I hope they all walk.

    HP is also pushing the hardware business almost entirely to resellers. The SMB shop is given almost entirely resellers now, with nothing available on the HP website - direct order. Only the braindead use the junk they sell through Home-Home office. HP used to sell robustly reliable workstations and business PCs. In this current HP environment, I can't imagine any IT enterprise purchasing HP anything. One does imagine that they could somehow make a buck from their disappearing_as_if_by_magic printer drivers - perhaps a new TV IT reality show on the order of Candid Camera.

    Seems like the new CEO is making all the right moves to hurry them into receivership. Obviously running an online flea market would be the right training for an HP shuckster.

  14. Doug Glass
    Go

    Ah yes, the business world ...

    ... and a dozen or so who have no real idea how it works. But that's fine, the IT people keep our toys running and that's good. And they like to eat too so, well ... there you go.

  15. N2
    Go

    I took 100%

    I quit my not very satisfying only just rewarding enough job, sold my house and moved to France.

    Senior management were shocked at my resignation, but I quit on favourable terms and still do a bit of work for them remotely.

    That was just over a year ago & Ive no regrets, would have done it sooner if I could.

  16. Peter 39

    prior art

    I think that the HPs actions here have a non-trivial resemblance to the cost-cutting scheme at Circuit City.

    And we all know where that led.

    1. LateNightLarry
      Paris Hilton

      Re: prior art

      Or maybe Best Buy... the company announced today that they are closing 50 stores in the US, and laying off 400 employees in the central office... Circuit City redux?

      Paris, 'cause I need something better to look at...

  17. Dominic Connor, Quant Headhunter

    The contractors won't quit

    ...today.

    Because until they find another spot, they don't get paid anything.

    So they will quietly circulate their CVs and move somewhere else.

    Be clear this is not going to save HP any money over (say) the next year, because the contractors will leave as the market rises and HP will need to pay the newer higher rate.

    Hiring a contractor has lots of costs, not least it takes time to get them set up, for them to learn the way things are done at this particular site, some tools they may not have seen before, etc. That cost has already been paid for those on site, but replacing outgoing staff ,contract or permanent has a cost.

    So why is HP doing this ?

    HP isn't.

    Some mid level manager has found a way to look good to his boss, there is a clear cost saving up front and the general hit to productivity is too spread out for the 2nd raters who run HP to spot. The guy who came up with this idea isn't doing good for HP, he's doing good for himself.

    HP's share price is in structural decline, pretty much anyone who cares knows this.

  18. Steve 13
    Stop

    What's the big deal?

    I don't understand how this has generated so many comments.

    Contract is offered a 5% reduction in rate as off next month, they decide whether to take it or go elsewhere.

    I know someone that starts a new role in London soon on more money, it didn't take them long to find something and they won't be taking the 5% cut.

  19. Hooksie

    Yep

    Plenty of other contract around - don't like it? Leave. That's the message that was given to Lloyds full time permies last year and I left - to join HP! :) I've since found a whole wad of contractors on double the daily rate that I'm on because of my so called benefits. Contractors rake it in and they know they do so take your 5% cut (285 a day from 300 a day, hardly drastic) and shut the f*ck up.

    All this "I'll work 5% less" - if you're a proper professional (and MOST contractors are) then you want to do a good job so don't give me that bull either. HP carry too many contractors and are hiring about 400 FTE's in Scotland alone so believe me, you won't be missed.

  20. Stefing

    Been there

    Me and one other contractor were given a similar choice, but with a 10% cut, 2 years ago.

    Luckily for me they asked him first, he tried to play hardball and he got the chop - I didn't risk it.

    A couple of month's later he had to come crawling back.

    Only now have they started to cut into the tumorous mass of managers that's choking the company,..

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