Barclays Capital slashes contractor rates by 10%

Easy

If you're that good, then you walk.

If everyone did that, then they are left with the crap contractors, but paying them 10%, win win for everyone...

Bloody contractors.

All they do is sit there reading The Reg. all day anyway, I'm sure BarCap can live without 'em.

Not me though, I'm busy sitting here working away. Ahem.

Anyway, where are they gonna go? The market is already dead, and the new FY budgets haven't materialised. It's 2003 all over again.

Steve "pro surfer contractor" Button.

Back to five years ago :-(

This happened twice while I was working for a large blue american corporation outsourced to a large pharmaceutical company based in Cheshire.

Everyone above a given rate was informed on a wednesday we were to take a pay cut by friday or we were "choosing" to terminate our contract.

Pretty much everybody took it because it was the worst part of the downturn but it was such a shitty way of doing it. It should be at the end of agreed contracts because that's a legitimate time to renegotiate rates etc not two weeks after some of us had signed new contracts.

Timing

Take the 10% hit. Become less productive and spend more time goofing off / working on side projects (the Dilbert method as Pete describes above).

Wait until working on something *absolutely* critical with exceptionally-tight timeframes.

Walk. With a big smile and a cheery wave.

And yet...

...agencies are still ringing me for AIX work with large financial company in Cheshire.

I didn't go as they're just another bank with the same cluelessness as another major bank not far away.

If you are any good ...

Up your rate by 10% just to spite them.

Mine is the one with the new contract in the pocket. Ta.

Unions

I'd like to see them try this sort of thing with a unionised workforce. A UK Wide IT strike, now that would be something!!!

Paris becase she always gives 100%

I'm still here!

I haven't got that notice....yet. Maybe I'm too sh*t hot. Or fired.

Flames, 'cause it's gonna hurt

CASH RULES EVERYTHING AROUND ME, CREAM!

Contractors moaning about a 10% pay cut?

You have a laughing?

Overpaid layabouts.

As a professional contractor...

The choice is easy -> Move on.

Quality staff do not have a problem finding well paid work.

If some place can't afford quality staff, that's their own problem.

They need to be careful though, as they'll get to keep the staff they can afford. :)

It's just their turn

After all, Barclays must be running out of customers to screw over with piss-poor interest rates for Barclays Bank customers (0.5% for a savings account??!!), massively shortened payment periods for Barclaycard users, removal of 95% LTV mortages for new homeowners, addition of new fees for buy-to-let mortages and raising borrowing rates despite the Bank of England rates declining. Guess they're just having to find other ways to scrimp and scrape by with those scant £7billion profits.

Not the first time

.... that this has happened in the city.

Citibank did exactly the same 5/6 or so years ago and also made all contractors take 2 weeks holiday. Place was like a ghost town and then half the contractors didn't come back.

I got my agency to take the cut that time and reduce their percentage and leave my rate as it was - if I was at Barcap now I would try the same again.

Looks like it is going to be a long summer for some..

Let's hope that lots of the decent contractors walk...

...cos the bank I work for is hiring, and we're having an impossible job finding anyone decent. :-\

well...

Kick in the teeth although most my friends contracting say there's plenty going around and I know some places have fired permenants instead of contractors (seems illogical but it comes down to quality against short term cost).

I wonder

I wonder if anything like this will be reflected in the bonuses for permanent staff?

Also, because it has been quite a while since I was a contractor, do the contracts generally still prohibit the contractor and the employer from exchanging information about how much each is receiving/paying, leaving the agency to be less than transparent about their margin?

Right...

...surely one chooses to become a contractor to earn the extra cash in exchange for employment rights. Therefore STFU!

Hmmmn

I wonder when barcap will be announcing record Profits

Organise

The reason that barcaps are not trying this on with their permies is that their will be a strike. I suspect that if there was a combined withdrawal of the subbies then barcap would go titsup in a matter of weeks.

They are (probably rightly) assuming that all the subbies will be upset - all accept the new rates, some will leave, but not enough to rock the boat - and they will leave in dribs and drabs anyway.

If all the subbies meet up and decide to collectively pull the plug within their notice period then barcap will be up s**t creak.

But wouldn't it be great! After all those legislation changes to increase subbie tax on the basis that subbies work as temp employees.

Go on! Meet up tonight! The Subbies Union.

Being subbies though - you don't have the team player attitude to actually achieve this - selfish bastards!

Red Ken. (Ex subby)

BarCap doing it again

They tried this on when I worked with them in 04; Credit Suisse did a similar thing by forcing all contractors to take 2 or 3 weeks holiday.

This type of ploy is an easy way of the CIO showing his boss how he managed to reduce the IT budget without impacting delivery, all said it is just smoke and mirrors because next year the contractors come back in at the same rate they were on before the cut!

Most Banking IT contractors have done a stint at BarCap and they are known as the "chop shop2 of IT banking, highest turnover of staff than the rest of the business silo's under Barclays but that is just down to Bobby Diamonds aggressive policies, (he hates IT people :)

Bad managment (or never be a project manager)

Budget Problems

Reduce rates.

Good people leave.

Productivity falls.

Project gets behind.

Aggressive CIO sacks project manager.

New project manager gets the good people back at increased rates.

Everyone blames the delay on the previous project manager.

Lots of overtime to make up the delay.

Aggressive CIO claims success.

IR35

Makes you wonder how the revenue still have a leg to stand on with regards to IR35 given this.

The world's smallest violin.

Contractors already earn a fortune in comparison with permanent staff and don't have to pay taxes through PAYE. It's why people go contracting. I recall when IR35 came in, contractors were discussing how to avoid having to pay their fair share of tax. Now that the legal loopholes they set up are biting them on the arse, they want employment rights? What next? Paid holiday, pensions and sickness benefits?

You make a choice, you live with the consequences.

Red Bren - Civil Servant or political nonce?

I'm not a contractor but have been before, both out of necessity and choice.

Quote = "Contractors already earn a fortune in comparison with permanent staff ".

Answer = Clearly you are incapable of setting up a simple spreadsheet to quantitatively evaluate what a contractor gets against a comparable permie, though the keyword in your statement may be 'earn' as opposed to simply 'be paid'.

Quote = "don't have to pay taxes through PAYE".

Answer = Yes, they do. Just how ignorant are you? Wait, that's an answer with no end.

Quote = "It's why people go contracting".

Answer = No, people go contracting for a variety of reasons. You appear to just be of limited intelligence, imagination, experience, or some combination thereof.

Quote = "I recall when IR35 came in, contractors were discussing how to avoid having to pay their fair share of tax".

Answer = If you are a permanent IT employee, name the IT technical courses and qualifications you put yourself through paying out of your own pocket. How many is that? None, and that is just one of the anomalies of your 'fair' IR35 regulation.

If you think contracting is so profitable then why aren't you contracting? Some risk involved if you're not up to the job, eh? I am not a contractor, but neither am I a bitter, envious, no-talented scared little twat. If contractors can't or don't deliver they can easily be canned, so just the fact of their continued existence proves their necessity to business.

People complain about contractor rates why

We are underpaid as it is, how about you cut some of the permanent staff who sit around all day complaining about work load and never doing any

dumb

UBS did this several times in the 4.5 years I worked there. 5% here, 10% there. Some people leave, the ones that stay have v low morale.

The only good thing is that you might be able to claw back the rate loss on your next renewal, so long as you find yourself temporarily indispensible...

@Red Bren

"You make a choice, you live with the consequences."

Yes @RB. We made our choices and not complaining - just commenting on how stupid BarCap's decision process is.

If you care to know why, we have career for life, and not afraid to say "so long and thanks for all the fishes".

Peanuts & monkeys remind you anything?

My reply to BarCap would be to shove it

It's not in my business case to subsidise the profits of multi-billion dollar investment banks. They are taking the pi$$. If they can't afford to pay the rates they've been paying then they'll just have to find cheaper contractors/employees elsewhere which I believe they are already doing. When was the last time you told a plumber or a builder that you're sorry but your dividends have gone down and you'll just have to cut their invoice by 10%? I've never met a plumber in London prepared to negotiate on their rates - they'd just put the phone down and you'd drown in your own effluent. In order to send work to Singapore they need the cooperation of the indigenous UK workforce to train up the cheapy folk. Answer: either don't do it or don't do it well. When I was asked to hand over a project to the Indians I made it clear it wasn't my job to teach the Indians to progamme. If they couldn't hack it tough. Funnily enough, they couldn't hack it and the project was canned.

The main problem with contracting in the City is that you are playing with sharks. It's an enormous racket between the banks and the recruitment agencies and consultancies(many of which are owned by current or former IT directors of investment banks funnily enough or their mates). The Office of Fair Trading really ought to be taking a look at it. They don't give a $hit if they get substandard work from some halfwit so long as they're cheap. If you won't work for the rates they tell you your CV doesn't go forward to the client so you don't even get the opportunity to show them why you're worth the money you're asking. Too many, usually young and inexperienced, contractors are prepared to work their nuts off doing unpaid overtime for a mediocre daily rate. That's what's ruined the contract IT market in the City: anti-competitve practices by the investment banks to artificially control the market which is illegal. I used to work in the City but rates have barely moved in the last 7 years, i.e. contractors have been working harder for less money. Life's too short. I'm happy to put in a good day's work for a fair hourly rate and more than happy to do 12 hour days so long as I'm paid for every tedious one of them. I'm not going to be obliged to work extra unpaid hours just because their project's a mess and the deadlines were non-sensical anyway.

I don't suppose anything's going to change because the average contractor isn't going to wise up to their leverage potential. Sod the daily rates, I want an hourly rate because I didn't go into business for the amount I earned not to be related to the amount of time I worked. That's what permies are for.

It's time for contractors to grow a pair of balls and tell the banks to shove it. Trust me, they need you a hell of a lot more than you need them(or at least that should be the case). So JFDI, kick them where it hurts and there'll be no more nonsense about daily rates, non-IR35 friendly contracts, offshoring, rate cuts and forced holidays.

As for the jealous little pussy-whipped contractor-hating permies who imagine that contractors don't pay PAYE and NI, why don't you just FOAD? Ok? You are merely advertising your inadequacy and sub-optimal IQ to a global audience and making your fellow permies an even bigger laughing stock because no matter how badly contractors get screwed by unscrupulous employers like BarCap the permies are getting seriously reamed and they seem to enjoy it - wonder why.

</rant>

@Fraser

re: notice period, one can always have a few days of unpaid sick leave. enought to cause delays etc.

wrt your list:

1) One also has to factor in the time between contracts to total annual taking.

2) IR35. If you don't know what it is, look it up, but in summary, 95% of your overall takings are treated like salary and you are expected to pay NI etc from that sum as well as income tax.

3) I don't know the contractors you have met but, I do pay for my own books and do try to keep two steps ahead of permies to justify my exorbitant fees ;) and I do my studies in my own time - outside of work. Last time I was a permie, I remember not having to go to work when I was on a course.

4) Then Pat's comments weren't directed to you, so why did you take offense? Red Bren was out of order and Pat responded thusly.

I've been either side of the fence and honestly, I'd rather be a contractor - my choice. I don't like getting involved in office politics, I have no ambitions to rise through the ranks and I just like to get on with my projects.

Best of all though, when I leave the office at the end of the day, I don't need to think about work till the next day.

@Omer Ozen

Just a quick clarification of your point 2 re. IR35. You don't just have to pay NI: you have to pay Employer's and Employee's NI. Yes, that's right. To add insult to injury they classify you as an employee for tax purposes and then make you pay the Employer's NI as though you were your own employer too. How sick is that? Of course, IR35 is now a voluntary tax only paid by the kind of contractor who's happy to work free overtime for a daily and as such perhaps it isn't so unfair after all.

IR35 and BarCap: just say no. You know it makes sense.

@ Fraser

Contracting - some of us ended up doing it after being made redundant elsewhere. The days of picking up more money than the permies are pretty much over, once you look at the whole package.

Example, contracted via an agency to a large broadcasting company, the on site admin (dumb bint) decided to tell everyone what the agency was billing for my services - I saw a good £6 a hour less than that, but was already getting funny looks - Contractors were severly limited in terms of access rights to do any meaningful work on AD etc. hence they all thought I was getting paid a damn sight more than I was and yet couldn't do half the duties my nominal role demanded....

Then there was the paternity leave, or lack of it. The umbella company were regardedf as my employer for tax puroposes, but would not pay for pat leave, the client was astonished when I walked back onto site after a days off as I couldn't afford to take any more unpaid time away.

Finally, IR35, there are/were loopholes that allowed you to offset stuff against tax, but when we did a round table at the end of contract it transpired that myself and one other lady still had the worst take home pay of anyone in the department.

In my current place I'm fortunate enough to be permy, and in a decent position, but the number of young kids coming in out of uni/1st job elsewhere who are on contract and don't even know what the going rate truly staggers me. I have personally seen two guys, same skillset, agency billing at same rate, being paid differing rate (by almost £4ph!)

AC, cos no doubt some bugger in here will clock this and squeal...