Of course, the agency could deal with this
By only taking 15% rake off instead of 30 - cynical, moi?
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 …
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.
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.
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I became a contractor a year ago having been replaced by three Indians.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.
"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!
"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.
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.
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.
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.
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!
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?
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.
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.
"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)
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.
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.
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.
OK, whilst I don't think that these tactics are particularly "gentlemanly", contractors are in business and sometimes business is just war without guns.
Not nice, not very palatable, but it's the real world, deal with it. Over the last 15 years two of the three times this has happened to my business (not at UBS), I accepted it, the third I chose not to and the agency/client backed down within hours. This course of action may not be appropriate for all contractors, but they can and should resist if possible - that's just good business practice. They should also consider demanding that their agency take a lesser margin and share the loss - after all the large proportion of an agency's work is paid for within the first few weeks of a contract and with a reasonable allowance for admin/factoring costs the remainder of the contract is at a healthy profit.
If ALL the banks/agencies do it simultaneously then that smacks of collusion/cartel and the MMC, DBERR (or whatever they're called this week) might get to hear of it from a bunch of contractors with good lawyers, but on a bank-by-bank basis, this is just business and you can bet your bottom dollar that other suppliers are getting similar sort of pain.
Bear in mind that most senior employees of UBS are pretty much in the same boat with ever-decreasing (and paid in shares) bonuses, salaries held frozen for years at a time (not even CPI/RPI increases &etc) and ever-decreasing levels of morale.
At some levels old-hand staff in many companies are line managing recent joiners who are on much, much higher base salaries because the old-timers have had years of frozen pay and the newbies join at market rate or better. Old-timers may be reluctant to move because their bonus funds are in shares which are not yet vested so they feel locked in to their current employer (the obvious intention of such schemes).
BTW whilst it's fashionable to beat the banking fat-cats about the head, remember that for every barrow-boy trader or investment rocket scientist there a dozens and dozens of staff on "normal" rates of pay.
Shouldn't this article be called... "UBS tells agencies to reduce rates by 10%"?
I'm a contractor of 15 years. For most of those 15 years, and apart from 1 or 2 direct roles - my contract has been with the agency - not the end client.
In only a few instances have I ever negotiated rate directly with the end client. On the occasions that the agency has asked me to take a cut, I have flatly refused at which point they quietly go away and leave me to carry on as planned.
As another says... the contract market is buoyant at the moment. If you are any good - you shouldn't have a problem if you choose to walk.
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