Indian techies leave unions worried
Vijay Dutt
London, December 26, 2005
It is not only the outsourcing to India that is troubling unions here in Britain. But their worries have extended to the fact that Indian techies are flooding the UK on temporary permits. They are also being accused of undercutting local wages and raising the prospect of a home-grown skills shortage.
The Association for Technology Staffing Companies (ATSCo) said salaries for certain IT workers had fallen in recent months. Its chief executive was quoted saying, "Wages are being undercut by companies bringing over Indian workers, who are put up in hostels and paid poorly."
Of over 21,000 foreign IT workers who have been issued work permits in 2005, 85 per cent are from India. A pay monitoring firm studied salaries and found that an experienced software programmer in India received £6,600 a year compared with £33,000 for his counterpart in the UK. But £6,600 is approximately equivalent to Rs 520,000, which means a major jump from what an IT worker can expect in India.
After deducting their travel, permits and living expenses, the Indian workers are "charged out to clients at around half the rate asked for a similarly home-grown IT expert (£350 a day against £650)". One estimator said, "One Indian supplier operating in the UK has around 80pc of its 2,000 (plus) staff in the UK comprised of Indians on assignment from a few weeks to several years."
ATSCo's research shows that the "commoditisation" of IT services has reduced average salaries for permanent IT helpdesk workers by 3pc this year to £17,538 and for temporary workers by 25pc to £12 an hour. They are now warning that such "onshore offshoring" trend could lead to a damaging skills shortage.
The national secretary for finance of one of the biggest unions warned that the UK could be left as a nation of "fat cats and hairdressers, with nothing in between" if the offshoring of back office jobs and manufacturing continues. Deloitte Consultancy, according to the Telegraph, predicted that two million jobs currently based in Western economies would migrate to India by 2008.
IBM, LogicaCMG, Accenture and CapGemini all transfer Indian workers to the UK for projects, as do Indian consulting firms Tata Consulting Services and Infosys. But it is not the lure of lower wages that has led to increased bringing in of Indian IT workers, One senior UK "onshore offshoring" figure admitted in the daily, "The real reason why companies are turning to people from the Indian subcontinent is that UK graduates can't compete with the quality of India's technology graduates. The level of intelligence and attention to detail is lacking in UK staff coming through the education system."