Offshoring - The Moral & Economic Case

[AtW]

But this work permit simply entitled you to be treated the same as any UK worker right? If so presumably you negotiated a good salary and the local folks didn't. Nothing structurally wrong there.

Indeed, nothing wrong so long as nature of work permit is long term. If you get work permit for a few months and bugger off back then you won't spend money locally, and generally won't have long term interest in the country.

This whole short term permit system was meant to be used for people who do installs and teach locals how to use new software/hardware, not actually get taught by them all the skills, ie not the other way around.

I am not affected by it, but given taxation and other issues, this one big problem is a step too far, especially in recession.

P.S. Anyone who does not know me - I am an immigrant myself who has now settled in the UK permanently.

[pzz76077]

Countries within EU or USA have varied costs of living but they are not THAT varied - effectively when some players arrive from country where they don't have to include in cost taxes, pensions, health and safety, decent pay that enables workers to have decent life etc, then the differential in pricing is so huge that it will have devastating competitive effects.

That's why manufacturing in the West went down the tuliphole, not all but in the UK it is pretty much decimated - all too easier to outsource you see.

Consequently the question should not be about whether it's indians or Americans, question should be whether particular activity is in the long term interests of the country or West in general. If it's not then such activity should be discouraged - with high taxation and long jail sentences if necessary.

On the other hand what should be encouraged is getting clever foreigners to work in this country, so that they get the same cost base as everyone else here and appreciate decent lifestyle in country where police does not make you give them bribes and stuff.

Under this model Brits going to Europe to contract isn't a problem, and same the other way around, including Americans coming over here or to Ireland, fine. It's not a problem also (in my view) to have someone like me in this country - much better than if I was outside in a low cost country doing some software for fraction of the cost, that would undermine system far more.

So you are saying that its wrong for someone to come up with a more cost effective model than employing a bunch contractors??

Ive been in this game a fair time and seem to remember that the argument for taking on contractors (that got this marketplace to where it is today) was that it was cheaper and more flexible than engaging a big IT company!

Pots and kettles come to mind!

Surely this is just evolution in motion- give it another decade or so and something better and cheaper will be come along to displace the Indians (though Indian companies are loosing market share to places like Morocco, Philippines etc already).

Ive worked all over the world and usually me being cheaper than the other options is at least part of the reason when it comes down to it.
If I can do it, I cant see any logical reason why I should protest when others do something similar, albeit with a slightly different approach.

These poor berated guys are just trying to make a living as best they can.
The companys that take them on are just using the best option available to them, which is how contracting got started in the first place.
Contracting is not the only game in town these days and hasnt been for quite a few years now.

PZZ

[AtW]

So you are saying that its wrong for someone to come up with a more cost effective model than employing a bunch contractors??

It depends whether such new "cost effective model" works out in the interest of the country: for example hiring underage kids to do hard labour making boots in 3rd world isn't exactly the kind thing I'd encourage as a Govt.

Ive been in this game a fair time and seem to remember that the argument for taking on contractors (that got this marketplace to where it is today) was that it was cheaper and more flexible than engaging a big IT company!

It's about differential.

For example if someone has got bow and arrows, then they can shoot X yards, but someone with sniper rifle will get them down in most cases long before they get a shot. The differential is just way too large, so you don't see many bows with arrows in modern armies.

Contractors generally perceived as more expensive than permies, the difference can be 2 or more times, which is not small, but it can be justified using various metrics, however it's not 10 times or something.

These poor berated guys are just trying to make a living as best they can.

I am sure they do that: they can do call centers or software development in this countries, they have advantage of low cost base there, which is fine as it is balanced by negatives such as long distance, lack of experience etc.

It's not reasonable however to expect combining both of those advantages - this seems like unfair competition. If someone comes to work in this country they should be paid market salary (or better), they should not expect to be taught how to do the job (apart from language maybe, manners stuff like that).

Bottom line (from Govt's point of view if it was any reasonably smart) is that if local tax base is decimated and country imports stuff rather than exports it, then ultimately this can put country into terminal decline of its tax base, investment made etc.

[OwlHoot]

How about a Brit going to work in Belgium, Germany etc?? Should we stop that?? Or are the Brits OK to do what the Indians aren't?? ...

It doesn't have to be an ethical question, where one agonizes over what may or may not be morally right or "fair".

The UK doesn't owe Indians or anyone else a living, any more than Germans (for example) owe us one, and our ability to get contracts in Germany has no bearing on any other foreigner's ability to get work from the UK.

All that should matter to a country considering offshoring is the expedient issue of what is best long term economically for the people living there, and there are arguments on both sides.

For example, in favour of offshoring, some people argue that if the UK doesn't and other Western countries do then they will end up out-competing us. That seems superficially plausible, but longer-term is probably more than offset by disadvantages, such as skills loss for example.

Another consideration is other goods and services the UK might want to sell India, such as weapons, which they'd probably purchase elsewhere if offshoring there from the UK was stopped.

[AtW]

Another consideration is other goods and services the UK might want to sell India, such as weapons, which they'd probably purchase elsewhere if offshoring there from the UK was stopped.

1. Decimate your local tax base by outsourcing all work elsewhere, and buy it in to give a lot of hard currency.

2. Sell them weapons to get some of hard currency back!

3. BOOMED!

[pzz76077]

It depends whether such new "cost effective model" works out in the interest of the country: for example hiring underage kids to do hard labour making boots in 3rd world isn't exactly the kind thing I'd encourage as a Govt.



It's about differential.

For example if someone has got bow and arrows, then they can shoot X yards, but someone with sniper rifle will get them down in most cases long before they get a shot. The differential is just way too large, so you don't see many bows with arrows in modern armies.

Contractors generally perceived as more expensive than permies, the difference can be 2 or more times, which is not small, but it can be justified using various metrics, however it's not 10 times or something.



I am sure they do that: they can do call centers or software development in this countries, they have advantage of low cost base there, which is fine as it is balanced by negatives such as long distance, lack of experience etc.

It's not reasonable however to expect combining both of those advantages - this seems like unfair competition. If someone comes to work in this country they should be paid market salary (or better), they should not expect to be taught how to do the job (apart from language maybe, manners stuff like that).

Bottom line (from Govt's point of view if it was any reasonably smart) is that if local tax base is decimated and country imports stuff rather than exports it, then ultimately this can put country into terminal decline of its tax base, investment made etc.

You are all a bunch of winging disguised employees IMV.
Would be a lot better if you all got permie jobs and paid proper tax.
Thats what the country needs!

BTW - Im not too convinced that anyone in UK Gov shares your view given that the Gov are amongst the biggest users of Indian developers, directly and indirectly.

PZZ

[AtW]

Would be a lot better if you all got permie jobs and paid proper tax.

The point is that the way it goes there won't be permie jobs, or contracts - people will be on the dole and less tax paid, it's a total tulip of a strategy for almost everyone apart from a handful of well paid chaps who'd get short term profits and bugger off somewhere far far away, it won't be India either.

BTW - Im not too convinced that anyone in UK Gov shares your view given that the Gov are amongst the biggest users of Indian developers, directly and indirectly.

Sure I agree - they don't give a tulip as they'll have their nice fat MP pensions, chairmanships and directorships, memoires etc.

[gingerjedi]

You are all a bunch of winging disguised employees IMV.
Would be a lot better if you all got permie jobs and paid proper tax.
Thats what the country needs!

BTW - Im not too convinced that anyone in UK Gov shares your view given that the Gov are amongst the biggest users of Indian developers, directly and indirectly.

PZZ

You don't say... I wonder when the penny will drop for this government? I wonder how much the tax take has dropped over the past 18 months?

I'm feeling the pinch so I buy the cheapest goods, the company that supplies the cheapest goods hires the cheapest workers who in turn feel the pinch and need to buy the cheapest goods... the UK is a 3rd world country in the making.

[AtW]

the UK is a 3rd world country in the making.

waking

[pzz76077]

The point is that the way it goes there won't be permie jobs, or contracts - people will be on the dole and less tax paid, it's a total tulip of a strategy for almost everyone apart from a handful of well paid chaps who'd get short term profits and bugger off somewhere far far away, it won't be India either.



Sure I agree - they don't give a tulip as they'll have their nice fat MP pensions, chairmanships and directorships, memoires etc.

Couldn't agree more- left the UK 10 years ago when the IT Contracting market had the writing on the wall. Havnt been back since, no regrets not even for a minute. Many more saw what was happening and did something about it as well!

PZZ