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, …

COMMENTS

This topic is closed for new posts.
  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.

      1. This post has been deleted by a moderator

        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.

    3. This post has been deleted by its author

    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.

        2. Roland6 Silver badge

          Re: Perspective @Silver

          >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.

          Are you sure? Just because your company pay's the agency at least £500 per day doesn't mean the contractor is earning that much...

      3. Velv Silver badge
        Boffin

        Re: Perspective

        @horsham_sparky

        You pay corporation tax (20%) on the profits AFTER expenses (e.g salary), so if you were taking a full salary you wouldn't pay the corporation tax (but you would probably be giving the government 40%+ instead of the 20%). You choose - 20% or 40%

        You're right that the gross turnover is NOT the take home money, but "Please get your facts straight before posting stuff like that" !

        1. horsham_sparky

          Re: Perspective

          My facts are straight. I don't pay myself a full salary, I take some of it in dividends (like most contractors). I still pay PAYE to keep up my NI contributions. I fully agree, corp tax is paid on profits after expenses (i didn't state that it wasn't)

          my point was that the original post was misleading, which I still stand by

    5. kmac499

      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.

    6. Tom 13

      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.

    7. Roland6 Silver badge

      Re: Perspective @Silver

      Your maths tells me you are a committed permie, who has neither contracted or worked as a consultant, nor seriously considered working in such a position.

      I suggest as an exercise you take your current package and work out how much you would need to gross to earn it if you were to freelance - then work out how much you need to charge as a minimum day rate to cover it.

    8. Jim 59

      Re: Perspective

      Both permies and contractors like to believe that contractors are hyper-rich, like the gold at the end of the rainbow. It is incorrect. Most IT contractors are on about 300 to 400 at the moment, and were on about 250-300 three years ago. Terrific rate still, but contracting also comes with about 3 or 4 months forced unemployment every year, on average. Amortize that into your figures. Now subtract about 10 - 12 thousand for hotel bills. Add in the Alan Patridge "Traveltavern" lifestyle and living in a suitcase.

      Many people, even contractors themselves, believe they obtain huge income tax savings by a magical thing called "dividends", thinking, perhaps even boasting, that they have paid no tax on certain monies, while blissfully unaware that they have in fact paid 20% corporation tax every penny, even before personal taxation takes a bite.

      1. Don Jefe

        Re: Perspective

        You can make enormous sums of money as a contractor, but as you note, there are significant expenses incurred in doing so and you've got to cover those with your fees as well.

        Bookkeeping is something I don't do myself. In truth, I wouldn't advise anyone capable of making a successful career as a contractor to do their own books. If you are making big bucks as a contractor a certain mindset is required, and that mindset isn't compatible with any revenue service I've ever encountered. They're rather glum, serious sorts :)

  13. AMBxx Silver badge

    Surprised if this works

    IT Market doing pretty well right now. My new customers are paying between 20 & 50% more than existing. Plenty of work.

    1. Anonymous Coward
      Anonymous Coward

      Re: Surprised if this works

      Quite - the contractor market is going up, not down. Barclays will be left with the dross.

  14. Valeyard

    I'm possibly wrong

    I may be mistaken here, so please don't get angry if I am, but isn't the generally higher pay rate of a contractor specifically to mitigate against times when the market is dry?

    a friend who contracts says his longest dry spell was about 3 months once, but you weather it because you've saved up when you DID have work at a higher pay than permie staff

    you can't have your higher-than-permie pay AND long-term job security too... for a start it tends to piss off the regular workers who demand that full-time staff are recruited instead

    1. Anonymous Coward
      Anonymous Coward

      Re: I'm possibly wrong

      "but isn't the generally higher pay rate of a contractor specifically to mitigate against times when the market is dry?"

      In part. As others have noted, the contractors also have no access to the staff benefits, and have to pay out more in costs, and if genuinely contracting may have to put up with worse hours and offer mobility to go where the work is. The high headline rates soon evaporate when you start working out the annual value of costs and lost working time.

      At the end of the year a contractor should be getting more per working hour after everything is taken into account because they are taking more risk, and requiring less in the way of support from the company, but that's a lifestyle choice. It suits some and not others.

      1. Valeyard

        Re: I'm possibly wrong

        ah true, i forgot one had to go to glasgow for 3 months once and so had to factor in rent etc (he was from Durham), yeah costs do factor in too

      2. Yet Another Anonymous coward Silver badge

        Re: I'm possibly wrong

        > should be getting more per working hour ...because they are taking more risk

        No - a contractor should be getting more per hour because that's what the market can stand

        Or more likely - it comes off a different budget and it would take too much politics to get your head count increased, so it doesn't matter if it costs more in the long run it's easier to get a temp

        1. Don Jefe

          Re: I'm possibly wrong

          Contractor, in the correct use of the term, hired for a project/problem with defined milestones and end points, is paid more than employed staff because even at day rates 10x+ over staff, they are cheaper than hiring a best in field specialist and keeping them on the payroll forever.

          An administrator of some sort (DB, network, storage, etc...) can often keep things cursing along just fine for ages after everything has been built and deployed. It could be a colossal waste of money to keep a full blown (tech) architect on staff once their job was done (that's an internal issue, that's why I used could in that sentence). The best specialists I've ever worked with are completely useless in daily operations and can actually be detrimental to keep around.

          If you're being a dick and hiring contractors as full time staff contractors get paid a bit more because it's expensive to be a dick.

  15. Maverick

    idiot bosses

    had one company owner who told me that he only paid mid market rates in his company. . . . me "so you only want below average people working here then?"

    seriously I tried to explain the maths, it was beyond him (guess he failed his O level maths)

    turned the job down flat (the director concerned was gutted)

    they went bust a few years later when their market got tougher, wonder why?

    1. horsham_sparky

      Re: idiot bosses

      My experience is that most bosses in the IT/Engineering sector don't understand the skillset of the people they employ, and therefore are unable to place a value upon it. Those that do understand will rarely bother with contractors but will seek good pay/conditions/opportunities for their permanent staff. However this seems to be the exception rather than the rule these days :-(

      1. Peter Gathercole Silver badge

        Re: idiot bosses @horsham

        There are financial reasons why large companies, particularly ones with shareholders, will have a large number of contract staff complementing their permies.

        The primary one is that contract staff appear on a different cost stream, and are seen as a cost against revenue, rather than a resource/capital cost. This looks good on the end of year financial report, because the company has to make provision to write down resource costs (things like pensions payments, provision for statutory redundancy payments, sick pay and employer insurance etc.) for permanent employees, but not for contract staff. This makes the shareholders happy because it reduces the money that has to be tied up and simplifies the books.

        Companies can also start and stop projects very quickly if it is staffed by contractors.

        1. horsham_sparky

          Re: idiot bosses @horsham

          Yep, I've heard those justifications before. And then those large companies wonder why their IT/Engineering projects run over-budget, deliver late and don't meet the requirements.

          When IT and Engineering resource decisions are made on purely financial reasons, that's when projects go wrong. The sad fact is that as a contractor its rare that I get contracts in well run engineering departments.. almost always they're getting me in at the end of projects, when deadlines are looming because they haven't properly resourced or specified the projects, and are they are into headless-chicken mode of project management.

          using contractors in this fashion means that you lose all the learning and experience that they gained during the project.. that means future projects take longer and are a lot more wasteful. Its a false economy.

          Unfortunately financial planners rarely understand this and think IT staff/Engineers can be brought in and moved on at a drop of a hat and still keep their effectiveness and productivity.

          So your justification whilst being a valid one financially just doesn't work very well in the real world :-(

    2. Jim 59

      Re: idiot bosses

      So basically you failed the interview ? Because everyone at the company was stupid ? And you showed the interviewer how to do O level maths ? And the big boss he was like weeping as you went out the door ? And they offered you the job ? Right on the spot ? And bam! they gone bust!

  16. Paul Leigh
    Holmes

    Meh...

    Same old, same old.

    Barcap tried this with me a few years ago (more than 3, for sure). Was quite happy to not accept the reduced rate and leave instead. I thought it was Resource Solutions that called it though, not Barclays themselves.

    Not everything in life can be solved by an accountacy decision. It's the financial version of feeding the donkey less and less each time, till one day it just dies.

  17. Anonymous Coward
    Anonymous Coward

    You'd have thought given the HSBC and RBS cock ups

    Banks would have realised by now that they are IT houses that just happen to offer financial services.

    I work in Insurance, and have managed to gain a shift in board attitude to IT, by pointing out to them that if our systems go down, we simply stop working. Endof. There is no manual fallback. No other way. We are utterly reliant on our IT systems to conduct business. They don't just make it easier, or more efficient. They actually do it for us.

  18. sysconfig

    A pay cut would instantly encourage me to wish them well in finding replacement, effective on the day the pay cut kicks in or after (in my case usually) two weeks notice period, whatever comes first. It's a matter of principle: You appreciate my work less? Alright, somebody else will appreciate it more.

    Only people who underestimate their own value and potential would accept to be treated like that, while the bonuses in the same company rise.

    It would be a completely different story if the company was on the brink of bankruptcy AND I had been treated with respect AND this was mutually agreed. None of that was the case here. If Barclays get away with it, there must be a high percentage of IT contractors who lost their balls.

    1. Don Jefe

      Barclays is playing their part in a never ending public spectacle. You can't collude to 'fix' prices and rates, but you really don't have to. One big name in an industry pushes new, lower rates and really, really fast, everybody else jumps onboard and that's that.

      If really fucking sucks and it's only possible when job situations in general aren't great. They wait until you're low then they fuck you.

      If contracting wasn't the go to employment mechanism it is different. You're changing policies that impact a minority of highly paid specialists, but when even the junior guys with just 10-15 years experience are treated as contractors everything is different. It sucks.

  19. Stevie Silver badge

    Bah!

    I predict the majority, nay the vast majority of the contract staff will use that time-honoured tactic so often deployed by their wageslave bretheren: Put up *and* shut up.

    Because if things were that bad wage-wise, they'd have walked a year ago.

    Downvote away LeDswinger, I was consulting when you were still playing with your dad's BBC micro and I know the calculus well.

  20. Anonymous Coward
    Anonymous Coward

    undermining contractual trust...

    I work as a contractor, if my client pulled a stunt like that with me, I'd look for a new contract and move. If had enough savings for a few months, I'd seriously consider issuing a cancellation notice on the contract. There are only a few reasons why the client would put their projects at such risk of skills drain, none of them good news long term for contractors or clients.

    1. Hollerith 1

      Re: undermining contractual trust...

      I had a similar thing happen, in that they changed the situation so that I would be less well paid under their new 'project terms'. I gave my notice and walked free, having done my best to leave things in a good position to the person coming in. They had to spend about a year's money in three weeks to get enough people to cover my work (three, I think) until the project was delivered, a month later, with much wringing of hands by the management. Did it trouble my sleep? Not a bit. Did I come back four months later, after a period of fun and travel, at a higher rate? Yes I did, and enjoyed four more lucrative years with them. You are worth as much as you command on the market. If you have weird set of skills (yay me) then you can set the terms. Of course, one day my skills will no longer be needed by al the new systems, but I am an old codger and I'll be happy to toddle off to the allotment to remember happy times saying 'f*ck you, pay me.'

      1. Anonymous Coward
        Anonymous Coward

        Re: undermining contractual trust...

        "They had to spend about a year's money in three weeks to get enough people to cover my work (three, I think) until the project was delivered, a month later, with much wringing of hands by the management."

        Hand wringing but no actual punishment or corrective actions I bet.

        Most organisations have enough of an airgap between the people making the decisions about rates, hiring and firing, and the ones who will suffer via projects that the left hand really does not know what the right hand will suffer.

        Barclays will feel a bit (sadly not much) pain on its projects but this will be solved by making the remaining project teams take on more work, work longer hours, or skipping bits. Some PMs/Managers will get aggro for failing to deliver etc. One or two may be forced out.

        The person who ordered the rate cut will get a bonus for saving the Bank £xm.

  21. JimmyPage Silver badge
    WTF?

    Cognitive dissonance ?

    Is that the phrase when things don't quite square up.

    News: Economy to reach 2008 peak this year.

    Jobs: Jobless total falling.

    Business: Banks pay bonuses.

    and yet Barclays feel the need to cut rates ? Someone, somewhere is telling porkies.

    1. Ashton Black

      Re: Cognitive dissonance ?

      ... someone is indeed telling porkies, to improve their bonus.

  22. b 3
    Devil

    barclays bank are parasites.

    ..they pay 1% tax.

    anyone disagree with me??

  23. Anonymous Coward
    Anonymous Coward

    Meanwhile 'For those into "pay porn"...

    So did Barclays increase the bonus pool? And if yes, did executive management deserve it?

    Here's the Beeb's take with a refreshingly whimsical angle from the usual numbers spin:

    http://www.bbc.co.uk/news/business-26513054

    What did we expect eh? Bankers play number games with Excel spreadsheets all day long! So when is the next crash? ...Bankers remind me of the fable of the scorpion and the frog crossing the river

    http://en.wikipedia.org/wiki/The_Scorpion_and_the_Frog

  24. Pete the not so great

    Well they (probably) wont be going to RBS

    no comment

    1. Anonymous Coward
      Anonymous Coward

      Re: Well they (probably) wont be going to RBS

      I wouldn't be too sure about that.

      Changes approaching in IT Management at RBS...

  25. IncreasinglyIncredulous

    This is killing projects - not only is there a cut to contract rates, but a 'hiring review' which means those leaving can't be replaced.

    Even if they could, the time to get them in, and up to speed on those projects would delay them, and cost the business more money.

  26. Anonymous Coward
    Anonymous Coward

    So much for Barclays "Values" and becoming the "go to" bank.

    If you're reading this, Antony Jenkins, could you please explain how mandatory mid-contract rate cuts of 10% for three years running demonstrates the Barclays "Values" of Respect and Integrity?

    Respect: "We respect and value those we work with, and the contribution that they make."

    Integrity: "We act fairly, ethically and openly in all we do."

  27. PassiveSmoking

    But I thought that if you wanted the best workers you had to pay the best rates, plus extravagant bonuses, and that you won't attract the best talant, who will just take their experience elsewhere otherwise? That's what they said about senior executive pay, after all.

  28. Anonymous Coward
    Anonymous Coward

    key word is contract

    Its interesting that Barclays have chosen to do this, they have a contract with the contractors and are basically breaking that contract. How would they like it if someone agreed a bank loan at a specific rate then a couple of months later decided to change it? For me that is the real issue, if they want to cut rates do it during negotiation, don't agree something then back track.

    I'm all for them negotiating new rates, but not changing them part way through the contract, they are trying to be the go to bank and are talking about "Respect" and "Integrity", interesting way of showing it. Or is this them showing their true colours by breaching existing contracts?

    There are dry spells for contractors which is why they are paid more, plus they are a transient work force, if you don't need them then don't renew them, if you want to save money then negotiate a better rate or stop spending so much money on the "third parties" and use more direct contractors.

    In the main article it talks about "reviewing market rates", if that is the case why has it been across the board, surely some types of contractors rates might be above the average, but not all?

    Reading some of the comments above you can see the contractor v permie arguments, to the permies I'd say that there is nothing stopping them going contracting if they want to and to the contractors, vote with your feet. They appear to have a track record of doing this so don't work there, they have such a large contractor workforce that they will struggle without them.

    Looking at the other articles on here, it appears that Barclays has a reputation for doing this, if this is the norm then they are going to find it harder and harder to find decent contractors to work for them, which is only going to cause them problems in the long run. Who remembers the big RBS batch issue?

    Their other option is to grow their existing IT workforce, but having just shed 12,000 jobs that might be a little difficult.

    Another thread talked about the 12k being the lower performing people, talking to people that have worked and work there it appears that it might not be the case, people have put in for redundancy and got it, as someone said in this thread, those that can leave will, which leaves what?

    Those that stay might not be the "dross" that is talked about, but they will certainly be down trodden, less likely to work extra hours, do things outside their task, if you want to treat people this way then don't be surprised when they start doing only what they are paid to do and leaving when they can.

    For those that are upset about the rates contractors earn, Barclays are not great payers so for them to say they have reviewed it and are paying above the market rate is rubbish as they are around 20% less than others are offering.

  29. Anonymous Coward
    Anonymous Coward

    Rates are increasing for the first time in 4 years

    There's loads of work in the marketplace and finally rates are on the up. Bad timing, they'll lose key personnel and will end up paying more to get them back.

  30. Anonymous Coward
    Anonymous Coward

    I'm not sure why companies do this. There is plenty of opportunity to negotiate the rate at renewal time and cutting rates mid-contract only serves to alienate and demotivate those that are working for them. It's true that most people will 'put up and shut up', at least in the short term, not least as the alternative is to put yourself on notice, but a lot of goodwill goes out of the window and people will start to look around as it suits them. For my own part I'll stay as I've only just started but I won't renew despite knowing they want me to. I doubt I'm the only one.

    I enjoy working at Barclays. I hate working for Barclays. And the rates aren't that great either...

  31. Anonymous Coward
    Anonymous Coward

    It depends...

    My wife worked there a few years ago. They did the same thing - 15% across the board cut to all IT contractors. She said no, with the intention that she would leave a few weeks later. Two days before leaving they dragged her into an office and said "We worked really hard to get an exemption for you".. to which she replied "Sorry, I already have another contract"... ;)

    The truth is if 80% accept the cut - they win. Some will say no, and Barclays will let them leave. Others will say no, and Barclays will waive the rate cut because they are key to a project etc.

    The fact is the industry knows that Barclays treat their IT staff like crap. If you choose to work there (permie or contract) you need to know that going in.

  32. Herby Silver badge

    10% pay cut...

    10% work output cut.

    Simple as that!

    Of course, you could join with others and TRY a 15% work output cut, and hope for an improvement, but I suspect it isn't in the cards.

    Good luck to Barclays, they will need it!

  33. Shonko Kid
    Facepalm

    Shoe's on the other foot now eh?

    "If we don't pay high salary + bonus, we risk losing talent"

    So, Barclays must them be tacictly admitting that they hope to be employing the shittest contractors they can find. I really hope that works out well for them.

  34. Anonymous Coward
    Anonymous Coward

    Parking...

    Talking to some friends who work there the funny thing about the parking issue is that they introduced a travel ban earlier in the year, as such the number of people on site went up, quite dramatically, which added to the issue that they are facing.

    Who would have thought that a site in the middle of no where that is already stuck for parking would be even more stuck when a travel ban is introduced?

    I imagine working there is like being in a real life Dilbert cartoon!

  35. Pixham

    I believe the recent regular rate cutting by many of the big banks is a symptom of a wider trend. As more and more 'traditional' IT and BA work is exported to offshore sites and offshore suppliers, and increasing numbers of those offshore staff are hired in UK-based roles, we will continue to see downward pressure on day rates. Any IT contractor not in a specialist role is becoming a commodity rather than a scarce resource as the pool of qualified people expands.

    Like it or not this is simply the market at work, and what were specialist IT skills in the UK are now starting to go the way of the ship builders in the 70s. Those who want to maintain their rates need to pick up new specialisms or move into management roles.

    1. Anonymous Coward
      Anonymous Coward

      RE: Pixhams response

      Thats a interesting point, Barclays like all the banks and offshoring roles as its cheaper, which as bad as it is for those that lose their jobs you can understand from a business point of view, however when they offshore it and then bring that resource onshore, that to me seems morally/ethically wrong, especially if you have displaced (the current word for redundancy) someone as a result of it.

      Maybe that is something the Register should look into, exactly how many offshore people are actually onshore? I'm sure the figures would be shocking.

      You can also understand, I guess, if the cut was to try and align the none specialist areas with a lower rate, but Barclays have done it across the piece, I suspect their specialists will just leave and that will have major delays on their projects or things will go live with major defects.

      My experience of most of the offshore people is that they don't seem to be as adaptable or experienced as people here. Don't get me wrong there are good and bad both sides, but due to culture differences sometimes the offshore people won't stand up and be counted or if they don't understand something won't seek clarification.

      Due to the lack of experience they rarely think outside the box, but do things parrot fashion and if they hit a problem can't work around it or solve the issue. As a result a lot of banks use automation to do a lot of their work, this in part is to create a consistent install for example, but also because their people don't have the skills anymore, a continuing dumbing down of it.

      I suspect its only a matter of time before these organisations are hit like RBS was with a massive outage and those people that have been "displaced" over the years will all smile and state "we told you so".

This topic is closed for new posts.

Biting the hand that feeds IT © 1998–2019