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When you work in an industry with a regulated asset base, it makes a difference.
Let's agree to disagree.
I do work and have always worked in an industry with a regulated asset base. And the shareholders don't care. To be honest, neither do I as long as I get the rate I want as a contractor. I hold shares in such companies too (I'm old), and again, I don't care.
Not enough profit? Headcount freeze. The work still needs to be done, so contractors are brought it. I remember back in 2000, a permie IT worker in a bank complaining about the number of contractors in his workplace who'd been there for years.
I agree about the headcount freeze. But not about them bringing in tons of contractors. That was true in earlier years but it's not been the fact for several years now. Cost cutbacks now in the places I have worked mean contractors out. You do after all need a minimum number of permies to keep the place ticking over. And big projects are just not getting the funding that they used to. Sadly it's a whole different world than when I started out.
I think you're slightly missing the point. Turnover per FTE is a measure used in some businesses. If you can hide FTE through contracts and do fancy accounting to capitalise some of those costs, it makes the business look more efficient than it really is.
Again the shareholders don't care. The business looks efficient. They get their dividends.
Not enough profit? Headcount freeze. The work still needs to be done, so contractors are brought it. I remember back in 2000, a permie IT worker in a bank complaining about the number of contractors in his workplace who'd been there for years.
The shareholders really don't care as long as the company is making a decent profit.
I think you're slightly missing the point. Turnover per FTE is a measure used in some businesses. If you can hide FTE through contracts and do fancy accounting to capitalise some of those costs, it makes the business look more efficient than it really is.
But you wouldn't put in your accounts that you have consultancy resource of X bodies as you may not know how many (offshore) resources you bought with the multi-million pound contract.
You can only say we have this many FTEs employed by us. That still disguises the true level of resource needed to run the operation.
The shareholders really don't care as long as the company is making a decent profit.
The resource still has to be accounted for. So not as employees but as external resources/consultancy. That's not cooking the books.
But you wouldn't put in your accounts that you have consultancy resource of X bodies as you may not know how many (offshore) resources you bought with the multi-million pound contract.
You can only say we have this many FTEs employed by us. That still disguises the true level of resource needed to run the operation.
It's also a perfectly reasonable reponse for companies who realise that giving inside determinations shows that they have been facilitating the rise of the "disguised employee" because they don't want the headcount on their books. Their balance sheets shows that they turnover x millions a year on an employee base of y. This looks super efficient and means they don't have to pay out to cover pesky legally obligated things like NICs and pensions and the myriad of other annoyances that employees feel they have a right to receive. Pushing the contractor base to umbrellas still keeps them off the the books so it is indeed a no brainer.
What company is willingly going to admit that they have been cooking the books for all these years and hiding the true level of resource needed to run their operations?
The resource still has to be accounted for. So not as employees but as external resources/consultancy. That's not cooking the books.
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