IT Jobs ‘Lost To Cheap Labour’

IT jobs 'lost to cheap labour'

By Jenny Cuffe
BBC File on 4
June 2, 2009

British IT contractors have lost their jobs to non-EU workers because they were cheaper, the BBC has been told.

An ex contractor at BT's Global Services Unit, said IT contractors laid off recently by BT, were told workers brought from India to the UK cost less.

He claimed the overseas workers working in the UK, received about half the rate for the job he was paid.

But BT said it was looking to cut its reliance on contractors and the Indian firm was supplying specialist staff.

Immigration rules allow for companies to employ their own workers in the UK, from non EU countries using intra company visas where staff had specific company knowledge or distinct skills which were not available in the UK in a process called on-site, off-shoring.

A BT spokesman said the company had a long-established relationship with Tech Mahindra and it made business sense to tap into their highly-skilled workforce.

The company was looking to reduce the use of “expensive contractors”.

Replacing contractors was part of a global, outsourcing deal and no permanent BT staff had lost their jobs, BT said.

Outsourcing deal

The former contractor, who worked on an NHS IT project at BT Global Services in Leeds, told File on 4 that IT contractors were told: “We have to cut costs, you've got to go.”

He claimed that staff were told they were being replaced by new staff who were employed at lower rates of pay by Tech Mahindra, an Indian company that BT Global Services has a 31% stake in.

The contractor said he received 400 a day while the Indian staff would receive 220.

“I haven't seen it written down on paper, but these are the numbers that were given by our line manager,” he added.

Tech Mahindra told File on 4: “Our operations in the UK comply with all the prevalent laws governing immigration and work visas. Employees are transferred to the UK if and only if their particular skills are needed to execute a client's projects.”

'Jobs loophole'

It is the potential widespread abuse of on-site, off-shoring that has caused concern to Ann Swain, head of the Association of Professional Staffing Companies (APSCo).

She said the association feared it was being used as a “loophole” to bring in cheaper foreign labour.

“We're looking at about 35,000 IT professionals coming into the UK frankly in a market that is not short of IT professionals in the incumbent workforce,” she added.

Her comments were disputed by Keith Sharp, marketing director of NASSCOM, the body which represents companies such as Tech Mahindra.

“These are not permanent UK jobs. Where we have permanent UK jobs, our preference is to fill those with UK nationals,” he told File on 4.

He added: “Government guidelines are very clear that there can be no cost advantage in bringing in an Indian IT professional on a temporary assignment as opposed to a local contractor.

Undercutting pay

“If there is non-compliance or any abuse that should be stopped.”

In March Professor David Metcalf of Migration Advisory Committee, which advises on the kind of the jobs the UK Might need migrants to fill, said his committee would be investigating on-site/off-shoring.

Professor Metcalf told the Commons Home Affairs Committee in March, “The people coming in to do IT jobs are disproportionately coming in through the intra company transfer route and we will be having a proper look at that in our review.

“If there were real elements of, for example displacement or undercutting, we will report on this.”