IBM joins rivals in cutting contractor rates
300 face Spartan rates
Posted in Management, 19th March 2009 14:04 GMT
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IBM UK is cutting some contractor rates.
IBM UK uses Hays, a specialist recruitment group, as a source for contract staff. According to Claire Fowler at Hays, "This week technical subcontractors engaged on IBM business have been notified of changes to their daily rates."
She added that Hays always tries to ensure rates are fair and appropriate within the marketplace.
It is understood from another source that a limited group of up to 300 contractors are involved, not the entirety of IBM UK's contract employees. Neither IBM nor Hays was willing to reveal the total number of contractors working for IBM UK.
A June 2003 source mentions 20,000 permanent employees at IBM UK with 5,000 contract staff, and it seems a fair bet that numbers will have increased since then.
A person familiar with the IBM UK contracting arrangements said: "IBM (is) to request that all contractors in the UK take a ten per cent cut in their rate or risk termination. This has succeeded in annoying the heck out of everyone. Most expected it, but given the record profits last year and the forecast, it has been seen as a slap in the face by some."
We understand that this rate cut may have come from IBM US and some people think that it has relevance to the potential purchase of Sun, but it may just be opportunistic given that BT and Cap Gemini are are doing the same. ®
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COMMENTS
Rate Cut
I am contracting with Virgin Media also through Hays (voted worst agency ever). We have been told to agree to a 10% pay cut by 03rd April, or leave.
Rate cut
I have been asked to agree (by return email) to a 15% rate cut with 7 days notice. There is nothing in the contract that says they can vary the rate, I have been advised by PCG legal to negotiate on the cut, surely Hays should do that but are not offering any help. With only 4 weeks left on my contract I am not sure what to do. Bet IBM aren't cross charging the customer less for us. This week my council tax bill amongst others have risen, talk about kick you where it hurts.
15% cut
Well yesterday I got a call from Hays "offering" a 15% cut - - I told them to stuff it....
History repeating itself
IBM, like all big businesses jump on any excuse to screw the little guy. It's no longer about making a profit: it has to be an obscene profit! And IBM + Hays have a history of doing this. Around the summer of 2001 NTL (now Virgin) outsourced all their I.T. to IBM and all the incumbent contractors were handed over to Hays whether they wanted it or not. A mandatory rate reduction was slapped on, with the option to leave if you didn't like it. If you decided to stay then the T&C's were straight out of an Orwellian parallel universe. e.g. they could dump you with 2 weeks notice, but you had no right to terminate prematurely, etc. Hays didn't get it all their own way either. They were forced into reducing their rate uplift, but in return they got a much bigger slice of the IBM pie. If I were a betting man I'd put my money on there being a similar kind of deal under the table.
My experience with Hays tells me.....
That they are not one of the agencies, that really look out for their contractors.
The term cowboys and crooks come to mind.
When the market is quite buoyant, they are a little bit more friendly, but otherwise if you don´t want do what they want, they will drop you like a hot potato!!!
Apart from that they are unreliable in terms of communications.
That´s why any email from hays, doesn´t even get to my inbox but is directed to /dev/null.
Having freelanced in the IT industry for the past 15 (fifteen) years, the UK agencies are generally amongst the worst (sorry to say, but that´s true!!!)
best experience I have had so far is with Germans and Swiss.
But Hays (but that may just be my experience, so totally subjective!!!) is an agency to stay away from!!!
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