RBS has government's blessing to transfer jobs to India

[malvolio]

PCG have written to the head of Loyds expressing their extreme displeasure at this whole fiasco and pointing out very clearly the damage it is doing to our industry. Bearing in mind we own Loyds, I hope that gets the point across. Copies have also gone to Brown, Cameron and Clegg, and the subject will be followed up at the highest level.

I also think we need some more work on the economics of this policy. My experience quoted above simply cannot be an isolated instance. We need to dispel the myth that offshore equals cheaper: it doesn't. We also need to highlight the working practices that are designed to do as much chargeable work as possible for every request, whereas at home I would expect my teams to do precisely the opposite.

[HairyArsedBloke]

PCG have written to the head of Loyds expressing their extreme displeasure ....

Yeah, that'll learn 'em.

Oh FFS.

[minestrone]

If it is done well there is no doubt it can come in cheaper, most if the time offshoring goes tits up it is just as much a problem with UK management. They have a totally different stlye of working and you have to keep on top of them but if you do then it can work out cheaper.

The goverment won't do anything, people who charge 500 quid a day and pay themselves 95% dividends are not high up on the sympathy list of either the public or the politicians.

[malvolio]

Yeah, that'll learn 'em.

Oh FFS.

FFS yourself, miseryguts. At least someone is actually doing something, as opposed to whining pathetically in the corner.

[malvolio]

If it is done well there is no doubt it can come in cheaper, most if the time offshoring goes tits up it is just as much a problem with UK management. They have a totally different stlye of working and you have to keep on top of them but if you do then it can work out cheaper.

The goverment won't do anything, people who charge 500 quid a day and pay themselves 95% dividends are not high up on the sympathy list of either the public or the politicians.

You miss the point. The business model is not to do it cheaper, it to sell cheaper labour costs. Once the contract is in place, the model shifts to doing as much work as possible, so that cheaper labour cost multiplied by significant extra and usually unnecessary effort maximises the revenue. And once you're in the loop, the average UK middle manager is not business-savvy enough to spot it, and has no local basis for comparison.

"It must be cheaper, they only charge half the labour rate". What happens when you not only have them working at half the expected speed, but tying up your own management to ensure the work is done the way you expect it to be done. Plus you discover very quickly that re-work means rewrite from scratch, not correct what has been done. Suddenly those labour savings go out the window.

I agree people should not be demanding unrealistic day rates, but the binned Loyds guys were averaging £350 or so a day and being replaced by resources at £250 a day. Not that much of a saving all things considered.

[minestrone]

You miss the point. The business model is not to do it cheaper, it to sell cheaper labour costs. Once the contract is in place, the model shifts to doing as much work as possible, so that cheaper labour cost multiplied by significant extra and usually unnecessary effort maximises the revenue. And once you're in the loop, the average UK middle manager is not business-savvy enough to spot it, and has no local basis for comparison.

"It must be cheaper, they only charge half the labour rate". What happens when you not only have them working at half the expected speed, but tying up your own management to ensure the work is done the way you expect it to be done. Plus you discover very quickly that re-work means rewrite from scratch, not correct what has been done. Suddenly those labour savings go out the window.

I agree people should not be demanding unrealistic day rates, but the binned Loyds guys were averaging £350 or so a day and being replaced by resources at £250 a day. Not that much of a saving all things considered.

You will never win the argument by telling people that offshoring will end up costing more because that is a subjective view based upon your limited experience of offshoring. You keep saying that offshore workers work at half the speed to get double the money which is something you cannot prove. It is a mud slinging argument on the same level as "she was a crap shag anyway". LLoyds will just laugh at you.

[malvolio]

Sigh... It's my direct experience, not hearsay. I've spoken to other managers who say the same thing. Several comapnies have brought work back home because their projected costs savings didn't materialise and the quality was going down. So I'll stick to my viewpoint, thanks very much.

Llloyds are pursuing a short term strategy based on dodgy economics to improve their bottom line and prove to HMG they are a going concern. The long term damage is not in their interest, agreed, but it damned well ought to be in HMG's. That's what the argument is about.

[HairyArsedBloke]

Leaving my argument that it is all far too late and should have been done five or six years ago for now.

Concentrating on the mico-economic issues as to whether any one company is saving money etc is not the correct issue. Those that need to be influenced are in government. They will retort that those issues are for individual companies and not for them to interfere. Which on the face of it is true, but this government will still do it if they can see a vote or two in it.

The argument should be of macro-economic issues concerning the country as a whole. The issue of job losses is one thing, but what about loss of skills and becoming dependant on external suppliers? Then there is the loss of tax revenue and pension contributions. Skilled people once made unemployed have greater trouble getting work that relatively lesser skilled ones so social security costs are greater. The general tendancy to import workers rather than hire and train locals may have a limited short term benefit to individual companies, but causes massive long term damage to the country as a whole. That is where the argument with government needs to be fought.

[minestrone]

Llloyds are pursuing a short term strategy based on dodgy economics to improve their bottom line and prove to HMG they are a going concern. The long term damage is not in their interest, agreed, but it damned well ought to be in HMG's. That's what the argument is about.

There you go again, you are making claims about the economics of the deal Lloyd's have made which you will know nothing about. No wonder Lloyd's will file the letter under bin. The PCG sounds more and more like the NUM every day.

I personally have outsourced work to Pakistan and found the work to be high quality at about 1/4 of the price and I would do it again, I suppose that makes me some kind of traitor?

You also try to foster the image that all onshore projects come in on time which is obviously laughable. Ofshoring is a reality and if we are going to ban it we will be moving back to the 70s.

[malvolio]

Totally agree. All those points are made in the PCG's letter. The aim is to use the Lloyd's case as an exemplar of the wider issue. That's why it's gone to the party leaders.