Investigating Outsourcing

Nov 22 2010   4:13PM GMT

Offshore IT worker exemption from new pay threshold makes influencial UK IT figure angry

KarlFl40 Profile: KarlFl40


I wrote a blog earlier today about the fact that the government looks set to exempt IT workers from the £40,000 pay threshold likely to be put on workers in the UK on Intra Company Transfers. IT workers will instead by set a £24,000 threshold.

One regular contributor to this blog has sent in a link to a great blog entry by Richard Holway of TechMarketView. Thanks ArgieBee.

I thought I would share it so here is his blog post.

His views reflect many I speak to in the Industry. They believe bringin in low cost labour from overseas is damaging the long term prospects of the UK IT industry.

The government is likely to announce its plans to meet its target to reduce immigration tomorrow.

If the alternative threshold is placed on IT workers Intra Company Transfers will be difficult to bring down because a massive proportion of ICTs that have entered the UK over the last 10 years have been IT workers. See the figures here.

If you are confused about why IT professional are often unhappy with Intra Company Transfers, one look at these figures will clear it up. 

2  Comments on this Post

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  • Mouseman
    What has happened is that companies like TCS, Infysos etc have lobbied hard to ensure the migration cap doesn't effect them. I am pretty sure the Indian Gov made it clear if the cap made it harder for their companies to operate in the UK relations between the two countries would become strained.

    The Gov have no clue. One MP was talking about the importance of ICT in relation to TUPE agreements (when a company outsources its a department / team and transfers its employees to a third party). He said as more companies outsource their IT depts to third parties its cruical to allow the third party's employees from India to come to the UK and train the transfered employees about the way their new employer operates.

    The guy seemed to have no idea that most TUPE agreement result in large scale redundacies for the transfered employees as the work is more likely to be offshored or undertaken by an employee transfered from India.

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  • Mark
    Just as I thought that I was making some progress convincing senior management at my company to take on some UK IT graduates next year, they are likely to change their minds once it’s confirmed that they can still bring in ICT resource from abroad for just 24k a year.

    Why the IT industry is being singled out with a lower threshold when the IT graduate unemployment rate shows that exactly the opposite is needed is beyond comprehension. Just like most of the ICT resource that I seem to spend most of my working week training nowadays:)

    It's also a great double whammy for the government and their attempt to address the budget deficit.

    Less income tax paid by these cheap ICT resources compared with what the government would get if companies had to pay a real market rate salary and more expenditure to pay unemployment benefit to our IT graduates.

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