Recession finally hits IT Market - 10% Pay Cut

Feelgood

My agency called me today telling me that my company were looking to cut IT contracting rates by 10%. We were told we could say no but that our contracts possibly wouldn't be renewed.

I wouldn't mind but the company in question just reported record profits last quarter...fookers!.

Anyone hit by the same?. Anyone any advice on whether to stick to my guns or take the offer?.

zillmere

And how long is your contract for?

Feelgood

31st March next year. Rolling 6 month contract, though have been on it 3.5 years at this stage!.

And I am in systems / networks admin in a huge data centre that is currently understaffed as is.

zillmere

So are they saying if a new contract is offered in March it will be 10% lower than the one you are on now?

I am in infrastructure like Ad & Exchange etc. The market is ****e.

xbox36016

thats bad you must go look for a new job than

Feelgood

zillmere wrote: »

So are they saying if a new contract is offered in March it will be 10% lower than the one you are on now?

I am in infrastructure like Ad & Exchange etc. The market is ****e.

No they are saying that they want me to cut my daily rate by 10% from next week!.

Basically there are 4 guys on my team that are all daily rate contractors. Now we run a 24*7*365 data centre, so basically we have 4 guys to cover 2 daily 12 hour shifts. 3days on 4 days off type scenario.

So my thinking is tell them to fook off as it would take at least 6 months to train someone on the infrastructure regardless of qualifications and if I left they wouldn't have enough guys to cover the shifts. So that buys me around 6 months at my current rate?. What do you think?

They are probably the biggest IT company in the world and are trying to implement a 10% contractor rates cut across the board, US, UK and Asia even though operating profits are up something like 200 million or something.

Its ridiculous to because 60% of the companies workforce is comprised of daily rate contractors..

zillmere

That sucks. I am afraid at this time of year they have you by the short & curlies & they know it.

I reckon if you pull the pin now, you will be looking at late Jan or Feb before something else comes up. Maybe there are bits & peices around but nothing bankable.

You must be pretty skilled to have got the job with them in the first place so if I was you I would have a chat to the other lads & see if you all can make some time to study, knock over a few exams between now & end of Jan.

Bone up on Exchange 2007 & vmware.

Feelgood

Jasus zillmere, looking at the jobs websites there seems to be a good bit knocking around on the admin site?. Are things really that tight?. Been nearly four years since I was looking for a job so I really have no idea.

Good idea with the up skilling alright, had that in mind already. Dunno about the Vmware / Windows route though. I was thinking of aiming for something a bit more niche. Seems to be a lot going on in the database side of things.

Anyways I think I will try my arm at saying no to the pay cut, if they then turn around and say well we are gonna have to drop your contract I will try negotiate it then.

Lot to be said for a permanent role!.

zillmere

Yeah Database work is a good area at the moment. SQL 2008 will start to make an impact next year so Oracle will also counter that somehow.

If you are looking on Irishjobs.ie, I wouldn't bother. In my experience most of the jobs on there are fake or wishful thinking on the part of the agency.

Also, in a tight market agencies put up fake roles to attract people so when they get a REAL role in they have the best CV on file.

Feelgood

zillmere wrote: »

If you are looking on Irishjobs.ie, I wouldn't bother. In my experience most of the jobs on there are fake or wishful thinking on the part of the agency.

Also, in a tight market agencies put up fake roles to attract people so when they get a REAL role in they have the best CV on file.

Good point zill, cheers for the advice my man..

MagicMarker

It may seem like there's a fair amount of jobs available but there's a lot more people fighting for places.

tallaghtoutlaws

MagicMarker wrote: »

It may seem like there's a fair amount of jobs available but there's a lot more people fighting for places.

And a lot of fake posted jobs by agencies to get you on their books.

galway008

Yeah Oracle seams to be good at the moment got 2 calls already this week about contracts and I wasn't looking. Also agree about Irishjobs, its a waste of webspace.

qwertz

That happened to a number of people at my previous client, take a cut from next week onwards or work the remainder of your contract and good luck on the way out.

BTW: That was in July this year and a for Irish terms huge company in the financial sector. One of the ones the government is helping out.

CorkFenian

IMO it hit IT 3-4 months ago, job scene very quiet, i'm looking since mid september, i would have 2 and half years 2nd/3rd level experience in financial industry, would really have concetrated there, its where the contract money was anyway...Definitely agree a lot of jobs on sites dont exist, very little I can do except look, good few desktop like roles going to people with far greater experience than is required, contracts for support have just dried up...

easyontheeye

its an employers market now! theres more competition out there and also dare i say it employers can now drop salaries and still get the right experience.

CorkFenian

Very true, the worst thing is they know it, some of the roles i'm going for , wouldnt have thought of going for them 6 months ago....Plus the process is much more drawn out, taking 2-3 weeks when before it between 5-8 working days...Very frustrating....

Farls

CorkFenian wrote: »

Very true, the worst thing is they know it, some of the roles i'm going for , wouldnt have thought of going for them 6 months ago....Plus the process is much more drawn out, taking 2-3 weeks when before it between 5-8 working days...Very frustrating....

I'd agree with you there, and 2-3 weeks seems quick at the moment!!

kmick

Remember two things
1)There are lots of people looking for work
2)Companies dont care if they lose experienced staff - they just dont.

Then it really depends on your personal situation. Can you afford to be unemployed for 6 months? If not take the cut.

If you can afford it tell them no or that you will meet them half way at 5%?

zillmere

Let us know how you get on.

CorkFenian, you are spot on. Now employers are doing stupid things like having 3 or more interviews for roles over long periods. They are also doing things like advertising that the role is paying x to y then offering 10% below x to the person they want to hire knowing the second guy in line will take it if they don't.

And companies wonder why in boom times there is little loyalty from IT staff.

zillmere

Agree kmick. I have seen a lot of good people let go over money. In this kind of market managers and financial controllers are judged by the wage bill not the quality of service the IT guys provide.

They are usually happy to let a person go over money no matter how good they are if they think they can get away without replacing them or at least get someone else for even less money.

mack81

Fixed-term employees

Many more people are now employed on a fixed-term basis (or on specific purpose contracts). Employees working on repeated fixed-term contracts are covered under the Unfair Dismisals legislation, through they need to have at least one year's continuous service before they can bring a claim under the Unfair Dismissals Act. Under the Protection of Employees (Fixed Term Work) Act 2003, employers cannot continually renew fixed term contracts. Employees can only work on one or more fixed term contracts for a continuous period of four years. After this the employee is considered to have a contract of indefinite duration (e.g. a permanent contract). Under the Act fixed-term workers cannot be treated less favourably than comparable permanent workers. You can read more about the Protection of Employees (Fixed Term Work) 2003 Act in this explanatory booklet (pdf) from the National Employment Rights Authority.
Specified purpose contracts are contracts that are entered into in order to complete a special project or for a special purpose. The provisons under the unfair dismissals and protection of workers legislation apply equally to specified purpose contracts.

Dunno if that is any use to you but it might be worth looking up. I think if the company determine your wages and you plan holidays etc around the company and not your agency then you have a lot more rights.

Might be worth looking it up. If they force you to take a paycut then it can be constructive dismissal.

Also, Ill probably get a ban for this.

mountainyman

The company is cutting the agency's rate% not yours.]
The agency are passing the burden on to you.

Refuse the cut and start looking immediately. Yourself and the other lads should start deliberately bringing the system down at critical times.

You are indispensable. If you all walk they are phucked.

Play hardball.

Dancor

Feelgood wrote: »

31st March next year. Rolling 6 month contract, though have been on it 3.5 years at this stage!.

And I am in systems / networks admin in a huge data centre that is currently understaffed as is.

Sorry I may be wrong but are companys not legally obliged to make you permnament after 3 years contract work?

mack81

dancor wrote: »

Sorry I may be wrong but are companys not legally obliged to make you permnament after 3 years contract work?

They can only offer you fixed term contracts up to 4 years I think.

After that I think they either have to offer you a permanent contract or let you go.

Feelgood

dancor wrote: »

Sorry I may be wrong but are companys not legally obliged to make you permnament after 3 years contract work?

Heard that somewhere before alright dancor, I'm not too well up on contract ins and out's to be honest, isn't that just fixed term contracts?.

Is fixed term where you are paid an annual salary rather than daily rates?.

penexpers

Feelgood wrote: »

Heard that somewhere before alright dancor, I'm not too well up on contract ins and out's to be honest, isn't that just fixed term contracts?.

Is fixed term where you are paid an annual salary rather than daily rates?.

No, fixed term refers to any contract where the length of employment is specified.

kmick

mountainyman wrote: »

Yourself and the other lads should start deliberately bringing the system down at critical times.
.

That would be rather silly. You can go to jail for that kind of thing now. Although I do like the idea of telling the agency to take the hit or negotiating a 50/50 split with them.

mountainyman

They'd have to be able to prove that you did it.
The reason they are not concerned about your wages is that you have done your job too well. You are invisible.

MM

AARRRGH

Take the 10% pay cut. No doubt you're already getting at least €350 per day, right? So worst case scenario you will only be paid €315 per day, or €81,900 per year.

Reality check time...

ntlbell

a few friends of mine were laid of this week from a large IT company so it's definitley starting to filter through

squeeky bum time

Eoin

AARRRGH wrote: »

Take the 10% pay cut. No doubt you're already getting at least €350 per day, right? So worst case scenario you will only be paid €315 per day, or €81,900 per year.

That's if you never take annual leave, work every bank holiday and are never sick. Factor in pension contributions, healthcare and whatever else a PAYE employee might get and I think that figure would be reduced.

mountainyman wrote:

Yourself and the other lads should start deliberately bringing the system down at critical times.

Completely unprofessional behaviour. If a company was found to be engaging in equivalent nasty little tactics like that, they would (rightly) get done for it. It's not just employers who should act professionally IMO.

ntlbell

eoin_s wrote: »

That's if you never take annual leave, work every bank holiday and are never sick. Factor in pension contributions, healthcare and whatever else a PAYE employee might get and I think that figure would be reduced.

7 sick days a year, 10 holidays, 10% into pension, vhi etc

given the pension and vhi would be off set in tax you would be left with about 70k

it's still a fair whack of change considering the country is in impending doom

mountainyman

eoin_s wrote: »

That's if you never take annual leave, work every bank holiday and are never sick. Factor in pension contributions, healthcare and whatever else a PAYE employee might get and I think that figure would be reduced.



Completely unprofessional behaviour. If a company was found to be engaging in equivalent nasty little tactics like that, they would (rightly) get done for it. It's not just employers who should act professionally IMO.

<<eth0_>> Please do not encourage users to do malicious things like this, thank you.

Mrs OBumble

penexpers wrote: »

No, fixed term refers to any contract where the length of employment is specified.

As far as I know, most daily rate contractors are real contractors: they operate a company that invoices the client for services provided. These invoices are paid by the client. Wages are not paid - because the self-employed contractor is not an employee. The company pays company-tax, and the owner (ie the contractor) retains the profits generated by the company. The self-employed contractor doesn't pay PAYE, but does play class-S PRSI.

People on fixed-term employment contracts may like to call themselves "contractors" but really they are temps. The only difference between them and the lowly admin person who is brought in to cover reception for a day is the length of their contract. They receive wages, and have PAYE and class A PRSI deducted by the employer.

Employment legislation applies to the latter group. It does not apply to the former group.

OP - over to you to determine which you are. Be aware that even if you are an employee, it can be troublesome to enforce your legal rights: the Protection act etc that have been referred to here are more about protecting the low paid cleaners etc who really are exploited by agencies.

The advice you've been given here about the labour market is spot-on, in my experience. There are very, very few vacancies out there. On the other hand, even if you do accept the rate cut, there is no guarantee that your contract will be renewed next year - you may be better off over all sticking to your guns.

Try not to be bitter about the fact that they're cutting rates while still making mega-profits. Even if it's true, you cannot do anything about it. And those profits were made in the last quarter, the actions they're taking now are about ensuring that they can continue to operate. And remember - if the labour market is buoyant at contract-renewal time, you would certainly be looking for a rate increase.

stevenmu

Keep in mind that for large companies, especially multinationals, these directives can be passed down from on high by someone who has zero idea of what happens on the front line. They can also be set completely in stone with no exceptions whatsoever. This means that your manager may have no choice in reducing the rates by 10%, even if it means letting go everyone who is actually needed and replacing them with poorly trained monkeys. The person who has set this policy may possibly not care that the data centre will collapse, they will insist on whatever is needed to get the 10% cut.

(and then probably give themselves a huge bonus worth more than the savings for increasing efficiency)

Aloysius Flyte

Feelgood wrote: »

My agency called me today telling me that my company were looking to cut IT contracting rates by 10%. We were told we could say no but that our contracts possibly wouldn't be renewed.

I wouldn't mind but the company in question just reported record profits last quarter...fookers!.

Anyone hit by the same?. Anyone any advice on whether to stick to my guns or take the offer?.

Take the cut and be thankful that you still have a job. It's bad out there and going to get worse. Start saving (or put away even more). Trust me, there are plenty of people out there who on paper can do your job and even if they can't do it 100% as well as you can, they can do a pretty good job for more than 10% less of what you are being paid now.

jon1981

Aloysius Flyte wrote: »

Trust me, there are plenty of people out there who on paper can do your job and even if they can't do it 100% as well as you can, they can do a pretty good job for more than 10% less of what you are being paid now.

+1 couldn't agree more

CorkFenian

As a difference the fixed term is the crap that strangles the worker, it definitely should be outlawed, i contract daily rate for ltd company , so have accountant etc, was off since mid september, got a contract till Xmas, so really happy, never thought i'd be so happy with a months contract, (but i know from experience it can lead to longer, had a months contract before that led to 10 months) TBH would definitely take a permanent job if offered in new year...

Mrs OBumble

CorkFenian wrote: »

As a difference the fixed term is the crap that strangles the worker, it definitely should be outlawed,

Maybe or maybe not. Yes, you are treated like c*&p when you are on one. But it's better than no job at all. And it is a way to fill positions while people are on maternity leave or long term study leave. (Without the fixed-term back fill, the original leave wouldn't be possible). And sometimes employers will take a risk and give someone a try on a fixed term basis who they wouldn't hire as a permie.

And there are some workers who only want shorter-term employment, without the hassle of setting up a company. Especially people who are travelling but want to stop somewhere for the winter.

CorkFenian

JustMary wrote: »

Maybe or maybe not. Yes, you are treated like c*&p when you are on one. But it's better than no job at all. And it is a way to fill positions while people are on maternity leave or long term study leave. (Without the fixed-term back fill, the original leave wouldn't be possible). And sometimes employers will take a risk and give someone a try on a fixed term basis who they wouldn't hire as a permie.

And there are some workers who only want shorter-term employment, without the hassle of setting up a company. Especially people who are travelling but want to stop somewhere for the winter.

I agree with what your saying for the most part, majority of fixed term contracts I have seen are for 12mths.....I dont think too many IT people take those kind of sabbiticals, i think they should be used only in 3mth-6mth cases, there very rare TBH...

Mrs OBumble

CorkFenian wrote: »

I agree with what your saying for the most part, majority of fixed term contracts I have seen are for 12mths.....I dont think too many IT people take those kind of sabbiticals, i think they should be used only in 3mth-6mth cases, there very rare TBH...

Some IT work genuinely is project-based: migrate from system X to Y, build an application to do blah-blah-blah, implement a new package, do a desktop refresh, build a new network). For this sort of project, budget generally is only available for a fixed term, so it's more honest to hire fixed term.

However much other IT work (support desk, 2nd level support, network engineer, DBA) isn't all project based, and it is a bit cheeky making it fixed term.

FWIW, I'm an IT person, and I look a year out to travel. Someone else from the same company did the same thing too. As the IT workforce matures, you'll find that IT workers become much like any others in terms of demographic trends like this.

dazberry

JustMary wrote: »

Some IT work genuinely is project-based: migrate from system X to Y, build an application to do blah-blah-blah, implement a new package, do a desktop refresh, build a new network). For this sort of project, budget generally is only available for a fixed term, so it's more honest to hire fixed term.

I spent 4 years on fixed term contracts in an organisation and it was IMO a complete abuse of the system, to the point that they wanted me to continue on fixed term until I pointed out the relevant legislation. The real downside was that my contract terms kept changing, so certain benefits and salary review criteria were always a moving target - and always to my detriment.

D.

KhanTheMan

I did some work for one of the top agencies in Ireland.

What i saw would make you laugh.

90% of the IT contract staff they placed were getting paid 30% - 40% less than the agency was getting from the employer.

Let the agency suck up the 10% drop. They are still making 20 - 30% off your back.

Expect agency staff to scurry on here to deny this gravy train. Anyone who ever got a look at an agency database or worked for an agency knows exactly what im talking about.