UK
Lloyds Banking Group appears to have been pretty hard on its IT workers recently. Following on from the revelation that a good proportion of the 5,000 redundancies announced last week will hit techies, comes the accusation that it may be under investigation for employing as many as 1,300 Indian contractors for homegrown projects.
The Lloyds Banking Group Union (LTU) has claimed that at least one MP has received a letter from the UK Border Agency on the bank’s “policy of replacing existing UK-based IT staff by non-European Economic Area Nationals”.
The union highlighted the fact that Lloyds was employing Indian techies at lower rate than their UK counterparts back in July. However, the scale of claim – that as many as 1,300 contractors have been flown in – runs counter to the bank’s assertion that the numbers employed are small.
“Indian contractors have been flown to the UK to do the work of IT staff and many of those have been moving from project to project and have worked for the group for many months, if not years,” says LTU.
While the union’s outrage is not to be scoffed at, it’s questionable whether Lloyds is entirely unique in employing this practice.
Once an outsourcing agreement has been put in place with a service provider, it’s relatively common for the firm to then replace incumbent UK staff with their own Indian workforce, says Nigel Roxburgh, director of outsourcing consultancy SourceGene.
“I’d be highly surprised if no other bank was employing the same practice,” he says.
There was also speculation earlier in the year that RBS was about to outsource more IT functions, with the bank’s staff saying an “entire floor” of office space had been handed to Indian outsourcing technology firm Infosys.
Lloyds is clearly viewing technology as an area where there are cost-savings to be had. In June, it downgraded contractor pay by 15%, and Roxburgh suggests that Indian contractors could be as much as 50% cheaper than their UK counterparts.
This is an absolute disgrace. Made even more so by the fact that it is British tax payers money which has bailed this bank. Not Indian tax payers. This country is becoming a laughing stock.
Heavy censorship on efinancialcareers says everything about the English. A coplacent bunch sleepwalking into disaster and accepting the unacceptable. Queen Victoria will be turning in her grave.
Oh no, they’ve taken our SQL lackeys, what next? The guy who puts the toner in the printer? In a moment of youthful indiscretion I did a computer science degree (now relationship manager, long story) its not really that hard to code and speaking as a tax payer why would I want my taxes spent employing expensive onshore contractors when similar offshore people can do the job just as well if not better. I’m frankly bored of the sob stories from IT contractors, the golden era where you could rake in 500 a day writing a few lines of C as computers where complicated mysterious machines is long gone. The skillset in commoditised . Its time to retrain in something thats based on your location, personal networks and personality. Or start a boutique outsourcing company. Follow the money.
This is all about short term cost savings and does nothing for the efficiency and ease of running an organisation this size. Yes you can silo functions offshore, set service level agreements and forget about the having to manage the functions, hence reducing headcount and short terms costs / stress – its a great idea on paper – However in the longer term you fundameently effect how and organisation can deliver and execute these functions and complicate the route to solving problems.
The people that have been pushing these solutions over the past 20 years – ie consultants are snake oil salesmen and should be ignored at all costs.
When you factor in that Lloyds bank is primarily owned by the British tax payer and we are in effect talking about taking a significant tax paying headcount out of our ecnonomy, then this looks like an utterly rediculous situation which should not be allowed to continue. It is the job of governement to itervene here and stop this type of business practice.
The people who are implementing these solutions in the banks and wider economy should hold their heads in shame.
Short term benefit for the company, long term disaster for society as a whole. Feel sorry for the IT geeks in particular, their employment prospects and wages have been devastated by both outsourcing work as well as the importing of ‘indentured servants’ to do what little work is left.
If Indian IT workers were any good then Windows Vista wouldn’t have been such a disaster. You pay for what you get.
“If Indian IT workers were any good then Windows Vista wouldn’t have been such a disaster. You pay for what you get.”
“Heavy censorship on efinancialcareers says everything about the English. A coplacent bunch sleepwalking into disaster and accepting the unacceptable. Queen Victoria will be turning in her grave.”
What?! Sarah, are you following all this?! No wonder the BNP is getting all these votes…
@DoL – I am following. We don’t censor very often – and probably not enough – but sometimes it’s deeply unavoidable. This was one of those times.
Many groups such as Lloyds TSB, British Gas/Centrica, and Government departments who have outsourced directly or indirectly have made extensive use of Indian IT groups since around 1995.
This has driven down fee rates for IT analysts and programmers from maybe 700 in year 2000 to under 400 for standard skillsets. I happen to have a 1979 Computer Users Yearbook which quotes the same day rates as currently available.
US companies and freelance workers have experienced the same “outsourcing attributes” since 2000, when rates and demand peaked due to ‘year 2000 bug’. Constant erosion due to corporate price sensitivity at-all-costs have driven down prices. Quality, documentation, business change processes, user acceptance testing, user training have all suffered as a result. Having been consultant and client for 30 years, custom built, competitive edge, systems and processes have constantly lost their quality, and the only sure way is for companies to buy generic packages solutions such as SAP, Oracle, or lines of business packages.
A common misconception in the IT industry is that database programming is not complex enough for developers. Developers and managers alike believe, wrongly, that in order to be perceived as competent and intelligent you need to write many a line of code in C and other imperative languages. This is total nonsense.
The problem is that many in the industry, particular IT managers and “consultants” understand neither the history of software development nor its purpose. Several years ago I completed a computer science degree with a focus on distributed computation. It was interesting, and I appreciated the challenges. However, the overriding value of my time at university came in recognising the role of database technology.
A good database developer will provide information that is correct, consistent and reliable to the appropriate teams. Moreover, said developer will provide information quickly. Very quickly. And this is the purpose of IT. Could I program in ASM, C, Java. Sure. And I did. But to do so would be wrong. SQL is a successful example of abstraction. Yet too many “new developers” think that the more code you write the better. Wrong. The aim is to write less code.
Yes please improve on the moderation, as there also was an issue with a comment from Steffanie yesterday as well….
“Oh no, they’ve taken our SQL lackeys, what next? ”
Unfortunately, there are so many bad database developers who have not a clue about what they are doing. The result is a system that delivers essentially no value to the business. And so people think: Oh, we need to bring in lots more developers with different skill sets.
A founding aim of SQL was that it would originally be used by analysts, and not IT people. And in most cases this is the case. The language is a gem.
People would be very surprised to realise the number of bad systems that are being developed these days. A recent example:
1) I worked for a large financial services firm in the UK as a non-IT analyst. I asked for some information with which I could perform custom analysis. The results? The IT team said I would have to wait until the next day. Fine. When I got the data, it was useless. Information was missing. I quit the company and joined a boutique.
2) At the boutique, I was asked to numerous sets of data from various perspectives, and whereby each set represented certain scenarios. The IT system developed the data in 1.8 seconds straight to Excel. Excellent. The system was developed by a Quant.
Well, I wasnae saying they should be censored. But I’m a little surprised, I thought I wouldn’t see this sort of thing on Efinancialcareers. Anyway, as for the topic at hand, I definitely sympathise with “victims” of offshoring. But capitalism is a hard, ruthless mistress, and one cannot just extract the benefits and isolate the ‘nasty’ parts.
Iam an indian IT worker and was selected by MS after 100′s of interviews here in London . I dont think indian IT workers are any way worse than those from here in fact the reality is to the contrary. I would attribute the harsh comments against indian IT staff to pure racism . Wake up and compete, no one stopped local workers from joining the Indian IT companies that do hire locally and who also pay tax to the british government .
Stefannie NOT Steffanie! Can’t you foreners spell?
I can’t see an issue with stefannie’s comments. Perhaps Anon is afraid to enter into any sort of robust debate?
Let’s face it. Lloyds has entered into any arrangement that destroys the UK IT industry. They’re not developing new talent indigenously. You could argue that that is just market forces and is anti-protectionist, probably justifiably. Long term that reduces Lloyds choice and eventually those market forces will demand higher rates due to the reduction of choice.
So, as shareholders do we accept a better short term result or longer term a better result? And, do we also accept that we’d like to pay higher taxes to supplement those workers displaced with non-EEA nationals that absorb our services whilst paying no UK taxes?
I would prefer as a UK taxpayer to invest on our people. If we don’t do that we will have nothing else to trade. Our manufacturing is gone. Will our knowledge economy be next?
“Stefannie NOT Steffanie! Can’t you foreners spell?”
No we FORENERS cant spell ..hahahahah what a joke…
Sandeep to quote Gordon Brown…”British jobs for British workers.” This is not an issue about racism. We have a national crisis and are getting ****ed over by this incompetent government, left, right and centre who have their heads buried in the sand. I have never and will never vote BNP. I am a capitalist. Always have been always will be.
@Sandeep
Mate, I don’t want to compete you. I want to keep my priveleges. It’s not about being fair. If we split our wealth with the 5 billion of world population that live in poor countires we’re doomed! I demand my government to protect me, not you!
Stefannie I dont see why I should change my name to have to fit in…next you will tell me to get white skin and blue eyes? I am well fitted in and have no resent ment towards anyone, dont know why i should?? I was only suggesting that if people loose their jobs they can get employemnt with indian firms that have bagged the contracts.
No such thing as the west anymore. It is the East and the west. Globalization my friends. Use it or lose it.
Lloyds Banking Group is and has always been committed to the British workforce. It respects the diverse and rich talent availiable in UK. The print/electronic media should understand that it is better to hire 2000 overseas workers and safeguard the 65,000 jobs already in the UK.
The average number of persons on a headcount basis employed by the Group during the year was 66,473 (2007: 69,533) of which 64,355 (2007: 67,616) were
employed in the UK and 2,118 (2007: 1,937) overseas.
Source: Annual Report 2008
http://www.lloydsbankinggroup.com/media/pdfs/investors/2008/2008_LTSB_Bank_R&A.pdf
the duke said it all…it is just about capitalism’ rules…nothing to add but
@Bill- what you called ‘our wealth’ has been created over centuries of violent and tremendous colonialism all over the world- India included- so please don’t give me this BS and don’t complain now if some IT indians guys are getting something back
@Stephanie- you call yourself a capitalist- you probably don’t even know what you are talking about. why not burn them alive?? I really hope you are just an ignorant person
@ on one – I do know what I am talking about. I have been under a great deal of stress lately. I have been on hormone treatment for the past two years. I have had my boob job but there is an NHS waiting list and I am still waiting to get my operation. IT is not easy going from being a City slicking German metro sexual within a credit ratings agency to a pre op. You try living as a lady in the City. Its bad enough here on efinancial. So there. nah!
Good, it is correct to outsource the overpaid Western job to China and India. Unless they accept the same wages, there will be no end to this!
Protecting priveleges? Bro, this is capitalism, the fundamental of which is competition. Sadly, your country, UK, is a self-proclaimed stalwart of that.
Get off your stupid imperialistic high horse. Those days are gone bro.
It must be said…all this democracy and modernity lark means one has lost much of one’s grace and favour property. But atleast it allows one to dabble in the biggest (or 2nd biggest?) casino in the world, which is more exciting and more profitable.
P.S. Stef…Trashing Germans and metrosexuals in one go. Good show.
Please provide a valid proof about this statement.
I completed my MSc with previous IT work experience and I am one of the Top 3 students from my class. When It comes to job almost all the EU and British students have got jobs. (Only 2 brits were in Soft Engg who are not looking for job). Now from other MBA and IT stream that I know many have got a job with UK getting salary around 30k, EU depending on country 25k. These are freshers.
I have been told a salary of around 25k – 27k k and the reason (Its a better pay than what I would be getting in my country).
When the same UK universities come to get students from India and other Non EU countries they charge us 4 times and say you can work for 2 years and cover the expenses.
Before coming to UK, I worked for an EU MNC and before that for a Swiss client for an Indian company.
(We are not lowering your salary, but it is the same UK companies who are getting things done in a good way for less amount of money).
(Note: I did not take any part time job during my Masters and I am not doing any after that. I am not a party freak who has submitted their assignments by getting it freelanced like EU students.
But our government says as British and very wealthy nation! Why do we have to work when we can live life to full on foreigner paying taxes.