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Is Lloyds alone in replacing UK IT contractors with Indian workers?
3 July 2009By Paul Clarke
COMMENTS
Accept this painful truth and learn to do something that requires either your unique personality (teaching, comedian, dealmaker, relationship manager), physical presence (policeman, hairdresser, waiter) or be very, very good at what you do. Read all comments »
Lloyds TSB seems to have grasped the nettle when it comes to offshoring IT roles, to the extent that it's actually bringing Indian technology contractors to the UK at the expense of local roles. Understandably, it's incurred the wrath of the unions, but it is really that unique?
Last week, it emerged that Lloyds was introducing a blanket 15% rate cut for its UK IT contractors, and now the Lloyds TSB Group Union has exposed the "outrageous" practice of bringing in tech Indian workers at a lower rate.
Mark Brown, assistant general secretary, says: "Not content with offshoring 4,500 jobs, the bank is now flying in hundreds of Indian staff to work in the UK and take the jobs of UK-based staff."
The union claims Lloyds is the only major employer to do this, but that might not be strictly true even if most firms aren't quite as overt.
As Nigel Roxburgh, research director at the National Outsourcing Association says, it's fairly common practice that once UK roles have been handed to an offshored service provider for the firm to then fly over Indian workers to the UK, often at a lower rate.
"I'd be highly surprised if no other bank was employing the same practice," he says.
He says the saving is still "significant" with the daily rate often being as much as 50% lower for an Indian worker compared to a UK counterpart.
RBS, for example, has a contract with Infosys Technologies of Bangalore and in March it was reported the firm was carrying out IT functions in Scotland for the bank. UK contractors feared this was a precursor to more outsourcing.
After a brief hiatus, offshoring appears to have picked up pace again anyway. UBS is said to be pondering moving 4,000 positions to India over the next two years.
COMMENTS
Bob, Information Technology, Sun 05 Jul 09
The problem is that UK politicians are completely beholden to big business.
I have just worked for 10 months on Germany and the difference is striking, there are many small businesses, and their politicians seem genuinely interested in the country; they have consistently been the worlds biggest exporter in terms of money earned, (China makes more small plastic things as opposed to BMW's, or precision engineering).
All our elected scumbags are interested in is whose board they will wind up on, and give big business a free hand in return. The thought of starting a small business in the UK is laughable when you look at the obstacles put in your way, wheres the big boys seem to be allowed to take over whatever they want and exploit employees in any way they like, including flooding the country with cheap imported labour.
Surprised @ Naivete, Private Equity / Venture Capital, Sun 05 Jul 09
I find this weird. In this global economy, when developed countries want access to emerging markets to exploit their market potential, it is only fair that they reciprocate. Except, when have the english/american ever known what is fair.
As Kloot correctly says, you should no longer expect a job just because you are British or otherwise. The trend is changed, move to India/China to work, being British you would get paid higher anyway, just because you can speak authentic "english" english at the call centres.
djm, Trading, Mon 06 Jul 09
It is not the strongest of the species that survives, but the one most responsive to change.
Add your comment »asian, Derivatives, Mon 06 Jul 09
Err.. didnt UK start this whole fire of globalization?
To refresh some memories.. it started way back in 18th century with the industrial revolution, and it destroyed the textile industry and the overall economy in India and China, which used to be the two richest countries on the planet till about 200 yrs ago. During this time, Europe prospered.
So, now that others are doing unto u what u had done to them, y act like a crybaby ?
Some days you shall be the pigeon, some days you shall be the statue.
As it is, protectionism in EU and North America is already rather high, (esp compared to their level of development). A cow in Europe gets more Money in way of farming subsidy than a poor fellow human in Africa.
Curbing flow of human resources (bad for some here) only makes Industry relocate the whole operation at some later date (bad for more here).
So, please .. stop crying. Start Trying.
Try to compete. The better IT pros in Europe can compete comfortably in the global marketplace.
Haha, Debt / Fixed Income, Mon 06 Jul 09
@ asian-Thanks for your input David Brent
Add your comment »asian, Derivatives, Mon 06 Jul 09
@Haha U are welcome, Gareth.
In other related news from Britain today,
1. Black cabbies protest to block Heathrow
Protests for "fears for black cab drivers who believe that they will lose valuable trade to cheaper rivals".
Oh My God!! How dare anyone provide cheaper service to the customers!!! This is totally outrageous!!
2. "British roles for British actors"
For an English actor whose roles have included the half-Spanish, half-Ukrainian-Russian son of Pablo Picasso, a French detective, a Spartan statesman – not to mention a certain Irish-American Baltimore cop – Dominic West is oddly territorial when it comes to casting.
Old Etonian star of US TV series has accused Russell Crowe, Johnny Depp and Renée Zellweger of "stealing our great heroes" by playing British characters.
Another Statistic, Information Technology, Tue 07 Jul 09
I am not sure this is uncommon.
CMC Markets have been doing something similar.
They have been making severe job cuts through out IT. On the other hand they employed the service of Thoughtworks consultancy who do heavily rely on bringing in staff from India. On the same day that permanent UK staff were being put at high risk of redundancy and being sent on garden leave, staff were arriving in the office from India (fresh off the plane) . And for several weeks more staff arrived fresh from the airport with their luggage.
When a former company outsourced work to India and brought staff over for training they, as the client, ended up paying for the flight, full-board hotel accomodation and daily travel expenses of each person.
From what I hear salary expectations in India have increased. Between all the middle-men I wonder how much are they really saving.
The recruitment conusltants are also feeling the pinch as a result of this.
Staff recruiter, HR & Recruitment, Tue 07 Jul 09
All I can say is be very very careful checking working permits etc. Many of these have been falsified.
Add your comment »Owl, Information Technology, Fri 10 Jul 09
Wise up Dave, these Indian workers are payed in India (plus expenses which are tax deductible), so don't pay British tax or NI. They don't spend money locally, as soon as they set foot in the country they are entitled to free NHS (many use the opportunity to have babies) , the only people who benfit are the international IT companies exploiting weak HMRC visa rules (HMRC IT projects run by Cap Gemini actually have a new mantra of hiring Cap India workers, without letting prospective line managers so much as phone interview), exactly what the country needs? You are either misinformed or an idiot.
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