6m remote workers could lose their jobs to offshoring

6m remote workers could lose their jobs to offshoring

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Discussion

theboss

6,878 posts

218 months

Tuesday 22nd June 2021
quotequote all
dmahon said:
768 said:
And it goes both ways. I know a few people in software development who've started working for US companies in the last year or two.
And that’s probably an example of them outsourcing to a lower cost locations. Americans are paid much higher than us in tech, especially FAANG.
There's an exchange rate / value proposition but also convenient time zone placement spanning all regions, English language and generally good availability of skilled people. Essentially the same reasons London does so well generally.

ATG

20,480 posts

271 months

Tuesday 22nd June 2021
quotequote all
dmahon said:
ATG said:
Differences between outsourcing versus off-shoring are important.
There is a more common hybrid in IT where you get offshore bums on seats from a supplier such as Accenture to augment your own teams.

Large businesses have wanted to do more of that for years, but quality, ROI, regulatory stuff, timezones holds them back. I don’t see India benefitting massively from this, I think they’ve squeezed everything they can there.

What I do see happening is more hiring outside of the expensive areas of the UK and maybe looking more at Eastern or Southern Europe. If the employees aren’t working in your office I think it would be madness to pay premium rates based on location.

I myself was hiring last year and receiving CVS for £700 a day London contractors and £350 guys based in Manchester and Glasgow. The London guys barely got a look in
The key thing is that you are outsourcing stuff to Accenture. It's secondary where they choose to locate their staff. Either the staff are good enough or they aren't and that's Accenture's problem.

re. regional hiring in the UK and abroad, couldn't agree more. It's good news for the regions, and pretty good news for a lot of people who currently feel they have to live in London because of their work.

I think an awful lot of large businesses would do better to recognise that IT is a core activity, even if they're making widgets or baking cakes for a living, and be more realistic about their on-going need to innovate. The usual underlying justification for writing a fat cheque to Accenture or a bunch of contractors is that the client believes they're in need of a short-term increase in skills and capabilities. And then the contracts roll and roll and roll. In a lot of cases it would be better if the clients recognised that their immediate skills and capacity shortage is in fact a structural hole in their business, not some one off.

I have sat in meetings with clients (mainly banks) saying "you need to hire people now to take this project/product over from my team because otherwise you'll have to keep rolling us until you do finally hire, and we cost you a fortune and add almost no value in this role". Couldn't convince them, so they kept rolling our contract over and over again. Madness. They weren't prepared to face up to the true cost of running their business, so they buried their heads in the sand and pissed even more money up the wall.

Contrast that with the bank I currently work for. IT accounts for something like 30% of the headcount, a large percentage of which are software developers. We're flat out all the time. Virtually no outsourcing nor contractors. IT is 100% a core activity of the bank. Software development is 100% a core activity of the bank.

Earthdweller

13,428 posts

125 months

Tuesday 22nd June 2021
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aparna said:
Weak pound must make UK hires quite attractive.
£1=€1.17/$1.40 at the mo and rising it seems, seems way off the doomsayers saying it would be worth way less than the € after Brexit





anonymoususer

5,717 posts

47 months

Tuesday 22nd June 2021
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British Gas seem anything but

MattyD803

1,690 posts

64 months

Tuesday 22nd June 2021
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OpulentBob said:
Captain Raymond Holt said:
It’s worth noting, as India is mentioned, that they get paid more than just pennies these days. Ain’t so cheap.
Not much more. I use an Indian resource and I pay maybe 20% of what I would have to pay over here, for work of comparable quality. I can employ a qualified design engineer there for £14/hr, which includes 50% for the agency providing him. So £7/hr, for an office baased engineer, with computer, software, and working to UK time. It is crazy cheap.
Interesting.

My experience (within several large design consultancies, specifically M&E / Building Services focus) is that sadly unless they have UK engineers supporting and working directly alongside them (hand holding), the Indian offices tend to churn out very poor quality deliverables.

They might be super-qualified academically, can drive a CAD machine as good as anyone, churn out excellent calc packs and are super efficient.... ultimately I have found that there understanding and ability to apply UK regulations, guidance and justify their decisions is non-existent. Without strict guidance, the designs do not meet the basic CDM requirements and the specification of plant and equipment is useless here in the UK. This ultimately leads to situations where UK based engineers have to effectively decipher and re-do their work......undo-ing most if not all of the savings made.

"Cheap" it may be/appear (in our field at least).....but it is certainly not my experience when you look at overall costs and efficiencies.

We have had some success using them for pure CAD capability, but even then it is limited as they tend to offer nothing more than a 'tracing' capability, as opposed to a solid UK based draughtsman who will apply some common sense and basic engineering 'nous' to get things to fit / arranged nicely etc, especially where 3D is required.




ooo000ooo

2,523 posts

193 months

Tuesday 22nd June 2021
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A mates girlfriend works in the complaints department of a large firm, they are backlogged something awful. Their boss has been asking for more staff for a long time. Companies response has been to offshore her whole department as soon as possible.
They spend all day talking to customers, years of experience in listening, understanding and have built up relationships with all the other bits of the company that help get things resolved.
Now it's going to India where sticking to the script is the norm never mind the language barrier.
To add insult to injury, they've been told that they have to apply for jobs internally and any jobs they get will be under the terms and conditions that were brought in for new starts at substantially less money, less annual and sick leave terms.
Real smack in the face for people who have been in the company 20+ years.

h0b0

7,557 posts

195 months

Tuesday 22nd June 2021
quotequote all
dmahon said:
768 said:
And it goes both ways. I know a few people in software development who've started working for US companies in the last year or two.
And that’s probably an example of them outsourcing to a lower cost locations. Americans are paid much higher than us in tech, especially FAANG.
Paid more....Cost less.

UK employees are expensive and you may not see the immediate benefit. (Complex subject ignoring medical benefits)

I was responsible for location strategy for a large US based **** and when running the numbers for mid to senior level employees, someone in Scotland cost me the bank more than someone in NYC metro at the same level. I did not dig into the London based resources because it was a no go and I had to exit.

A lot of this is due to tax on employees. Post 2001, banks were exiting NYC and moving to NJ. That was due to a favorable tax system in NJ. These tax advantages were not renewed when the new governor came in so there is a big push to move to Dallas. Unlike in the past, those that were allowed to move recently kept their full package (inc bonus) because there was still benefit to the company in the move. I was given the opportunity and I turned it down because, if Dallas change their tax system then there is going to be a lot of people stuck looking for jobs. And, those mansions with pools they bought will not buy a shed with a leak on East/West coast when they have to come back.

India...Salary expectations are rising rapidly for qualified employees. Yes, you can fill a role at a consultant for $24k/yr but for decent employees competition is high and the cost is significantly more. Also, due to the salary inflation, to maintain employees there is a need for double digital percentage pay rises.




768

13,600 posts

95 months

Tuesday 22nd June 2021
quotequote all
h0b0 said:
Paid more....Cost less.
Doubt it for FAANG software developers.

A senior software developer there would be looking at $300-$450k. It's probably £60-100k here.

ITP

1,996 posts

196 months

Wednesday 23rd June 2021
quotequote all
MattyD803 said:
OpulentBob said:
Captain Raymond Holt said:
It’s worth noting, as India is mentioned, that they get paid more than just pennies these days. Ain’t so cheap.
Not much more. I use an Indian resource and I pay maybe 20% of what I would have to pay over here, for work of comparable quality. I can employ a qualified design engineer there for £14/hr, which includes 50% for the agency providing him. So £7/hr, for an office baased engineer, with computer, software, and working to UK time. It is crazy cheap.
Interesting.

My experience (within several large design consultancies, specifically M&E / Building Services focus) is that sadly unless they have UK engineers supporting and working directly alongside them (hand holding), the Indian offices tend to churn out very poor quality deliverables.

They might be super-qualified academically, can drive a CAD machine as good as anyone, churn out excellent calc packs and are super efficient.... ultimately I have found that there understanding and ability to apply UK regulations, guidance and justify their decisions is non-existent. Without strict guidance, the designs do not meet the basic CDM requirements and the specification of plant and equipment is useless here in the UK. This ultimately leads to situations where UK based engineers have to effectively decipher and re-do their work......undo-ing most if not all of the savings made.

"Cheap" it may be/appear (in our field at least).....but it is certainly not my experience when you look at overall costs and efficiencies.

We have had some success using them for pure CAD capability, but even then it is limited as they tend to offer nothing more than a 'tracing' capability, as opposed to a solid UK based draughtsman who will apply some common sense and basic engineering 'nous' to get things to fit / arranged nicely etc, especially where 3D is required.
Exactly.

They can call themselves what they like, the reality is the ability is virtually zero. Most likely just been on a CAD course for a few months and given a job title. They need everything doing for them, so they can just copy it. This is the limit of their ability. I know, I was allocated a team of ‘designers’ on a recent project. They were lovely people, but completely and utterly unqualified to do the job. It was like being given a bunch of 40 year old school leavers, all of them waiting to be told what to do. When you tell them what to do they say they understand, but they really don’t at all.
Previously I had 6 guys with 200 years of combined engineering design experience.......

Tragic thing is the management and money men, who have never actually done any engineering design themselves, actually believe a uk designer with 35 years experience from all over the world, is no different to a ‘designer’ in one of these low cost centres. They are totally duped by a fancy trip to Mumbai or where ever, where they are shown a pre arranged tour and staged CAD examples of what they can do. They then sell this utopia to their bosses and it’s all go.

Later, when shown blatant examples of total incompetence in the alleged role (not the persons fault to be fair to them, because they actually have no, or minimal experience) this is somehow excused and blamed on you for not ‘managing them’ properly. It’s truly pathetic. But they cannot backtrack on their genius plan they sold to their bosses and they must forge ahead, and any questioning of this way of working is severely frowned upon.



768

13,600 posts

95 months

Wednesday 23rd June 2021
quotequote all
ITP said:
Tragic thing is the management and money men, who have never actually done any engineering design themselves, actually believe a uk designer with 35 years experience from all over the world, is no different to a ‘designer’ in one of these low cost centres.
I think that's common to skilled roles. Those without the skills often cannot tell there's a difference, aren't even aware there is one, let alone the size of the gulf between even when it's many multiples of the cost difference.

Electro1980

8,248 posts

138 months

Wednesday 23rd June 2021
quotequote all
ITP said:
Exactly.

They can call themselves what they like, the reality is the ability is virtually zero. Most likely just been on a CAD course for a few months and given a job title. They need everything doing for them, so they can just copy it. This is the limit of their ability. I know, I was allocated a team of ‘designers’ on a recent project. They were lovely people, but completely and utterly unqualified to do the job. It was like being given a bunch of 40 year old school leavers, all of them waiting to be told what to do. When you tell them what to do they say they understand, but they really don’t at all.
Previously I had 6 guys with 200 years of combined engineering design experience.......

Tragic thing is the management and money men, who have never actually done any engineering design themselves, actually believe a uk designer with 35 years experience from all over the world, is no different to a ‘designer’ in one of these low cost centres. They are totally duped by a fancy trip to Mumbai or where ever, where they are shown a pre arranged tour and staged CAD examples of what they can do. They then sell this utopia to their bosses and it’s all go.

Later, when shown blatant examples of total incompetence in the alleged role (not the persons fault to be fair to them, because they actually have no, or minimal experience) this is somehow excused and blamed on you for not ‘managing them’ properly. It’s truly pathetic. But they cannot backtrack on their genius plan they sold to their bosses and they must forge ahead, and any questioning of this way of working is severely frowned upon.
Same thing in IT. They can put together some code that runs but they can’t deal with ambiguity, and won’t ask if something is unclear. They will just guess. It’s not a language thing either. I have a collage who is a native Urdu speaker and he gets the same frustrations with one of our suppliers Pakistan dev team.

JagLover

42,265 posts

234 months

Wednesday 23rd June 2021
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liner33 said:
Captain Raymond Holt said:
It’s worth noting, as India is mentioned, that they get paid more than just pennies these days. Ain’t so cheap.
Yep and there is a skills shortage . Lots of US companies are pulling out of India
I think the issue with India is that despite the place having close to 1/2 billion workers you cannot outsource work to the vast majority of them. The education for most is very basic and the skills similarly basic. Outsourcing companies are competing for a limited pool of middle class, well educated, workers with decent English language skills. Such people are then in high demand and switch between the various companies fairly quickly.

Carl_Manchester

12,102 posts

261 months

Wednesday 23rd June 2021
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TameRacingDriver said:
https://www.msn.com/en-gb/money/other/remote-worki...

I called this out over a year ago as a real threat and the majority of people seemed to dismiss this concern as negativity. Well let's see, because as I've already begun to witness, this process has already started. Seems inevitable to me given most companies only care about money and not people.
Judging by my recent experiences with a well known banks software and call centre, I wouldn’t be too worried.

Worth mentioning that the India teams are currently reading stories about their BPO jobs being automated within the next 5 years, they have more worries than us imho.

h0b0

7,557 posts

195 months

Wednesday 23rd June 2021
quotequote all
768 said:
h0b0 said:
Paid more....Cost less.
Doubt it for FAANG software developers.

A senior software developer there would be looking at $300-$450k. It's probably £60-100k here.
I can reliably tell you Senior software developers at FAANG are not routinely on $300k+ In the US. Sr Managers of software developers are though.

There’s a couple of exceptions, I know of one contractor on $450/yr due to a perceived niche knowledge. But, he is the one asking for his rate to be reduced because he knows it isn’t sustainable and as he works for another company he is not seeing anywhere near the full amount.

The second possible exception are those that signed up for an amount which includes a large percentage of stock. In some cases, the stock vests over 4 years and in that time the stock jumps in value. As an example, Amazon doubled in value from a specific moment in 2020.

Having said that, starting salary at a FAANG is about $100 - $120k fresh from Uni. FAANG have the ironic benefit of being able to pay less than banks due to graduates desire to work there.

Take a look at Glassdoor. In my spot check, it does appear to be low for FAANG but close for banks.

basherX

2,464 posts

160 months

Wednesday 23rd June 2021
quotequote all
One thing about many of the traditional, low-cost locations for offshore centres (whether BPO/outsourced or in house shared services) is that the history of offshoring has created a deeply rooted culture in the receiving organisations that totally contrasts with that in the sending organisations. My experience is that an uncomfortably large proportion of our staff in these centres crave certainty. They want detailed work instructions on every scenario and to be able to stop if they encounter something unknown. It's all about process documents, work instructions, RASCI matrices and a terror of internal/external audit findings.

These things all have their place in my sphere (financial risk management) but they cannot completely remove the need for the application of professional judgement, expertise and experience. The standard offshore model theoretically gets me close to where I need to be but the gap that's left continuously has some real horrors in it.

An unkind colleague refers to some of our offshore team as Transformers- robots in disguise.

768

13,600 posts

95 months

Wednesday 23rd June 2021
quotequote all
h0b0 said:
I can reliably tell you Senior software developers at FAANG are not routinely on $300k+ In the US. Sr Managers of software developers are though.

...

Take a look at Glassdoor. In my spot check, it does appear to be low for FAANG but close for banks.
Glassdoor is a ballache. But it gave me an average of $370k for Netflix with the 75th percentile at $451k before it annoyed me too much.

I prefer levels.fyi. And my own experience.

h0b0

7,557 posts

195 months

Wednesday 23rd June 2021
quotequote all
768 said:
h0b0 said:
I can reliably tell you Senior software developers at FAANG are not routinely on $300k+ In the US. Sr Managers of software developers are though.

...

Take a look at Glassdoor. In my spot check, it does appear to be low for FAANG but close for banks.
Glassdoor is a ballache. But it gave me an average of $370k for Netflix with the 75th percentile at $451k before it annoyed me too much.

I prefer levels.fyi. And my own experience.
Agreed, Glassdoor is a ball ache. Netflix is odd because they don’t have levels in that salary data so you are picking up very senior people in a surprisingly small pool of responses. Also, on both Glassdoor and levels there appears to be a number of dreamers claiming to be on $350k+ as a first job.

My original point was that, for comparable roles in the same/similar companies the cost of employment is higher in the UK compared to US even though the take home is less. I wasn’t necessarily focusing on FAANG points off the curve.

Let’s change that to remove ambiguity, for the same cost to the employer, the take home is less for the employee in the UK. There are many reasons why, including health care and property tax.

dmahon

2,717 posts

63 months

Wednesday 23rd June 2021
quotequote all
h0b0 said:
I can reliably tell you Senior software developers at FAANG are not routinely on $300k+ In the US. Sr Managers of software developers are though.

There’s a couple of exceptions, I know of one contractor on $450/yr due to a perceived niche knowledge. But, he is the one asking for his rate to be reduced because he knows it isn’t sustainable and as he works for another company he is not seeing anywhere near the full amount.

The second possible exception are those that signed up for an amount which includes a large percentage of stock. In some cases, the stock vests over 4 years and in that time the stock jumps in value. As an example, Amazon doubled in value from a specific moment in 2020.

Having said that, starting salary at a FAANG is about $100 - $120k fresh from Uni. FAANG have the ironic benefit of being able to pay less than banks due to graduates desire to work there.

Take a look at Glassdoor. In my spot check, it does appear to be low for FAANG but close for banks.
Almost all engineers at FAANG have a whopping stock options package which smashes them through $300k/yr net because the stock has done so well. On the FIRE forums there are an endless supply of people coming through with 500k-800k packages, sometimes with both partners working at FAANG.

$300k is only starting to make sense in the Bay Area when $1.5 million buys you a shack with high property taxes.



americancrx

394 posts

216 months

Sunday 27th June 2021
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I'm surprised we're not seeing American engineering jobs outsourced to the UK. Engineering pay in the UK is startlingly low - a 10-year mechanical engineer in the auto industry is lucky to earn 50k GBP. In Detroit 10 years brings home $110,000+.


Matt p

1,036 posts

207 months

Sunday 27th June 2021
quotequote all
americancrx said:
I'm surprised we're not seeing American engineering jobs outsourced to the UK. Engineering pay in the UK is startlingly low - a 10-year mechanical engineer in the auto industry is lucky to earn 50k GBP. In Detroit 10 years brings home $110,000+.

I work for an American Conglomerate. Industry is in the built environment. The American side at the moment has taken a real kicking. A lot of skilled guys have been let go and there is a recruitment freeze at the moment. The specialist guys that are part of the trouble shooting team are crying out for support. Yet, and this is the kick in the nuts, the amount of middle management taken on and money allocated to job relocation is insane. We are talking people with 20-30 years of service just let go and jobs moved to a central hub in the N.W U.K.

The term engineer in the U.K has been dumbed down so much. It’s a real shame. I’d love to be a fully qualified chartered engineer in my field. However, I’m content with specialist spanner monkey………..