Are work permits for IT professionals being abused?
Amicus – the largest private sector union in the UK - supports a policy of managed migration. In principle, it is recognised that where it is not possible to find the necessary IT skills in the UK, then it is appropriate to seek to obtain those skills from outside the UK.
At the same time, employers should not treat the scheme as an opportunity to put short-term profits before investment. They should use the time that they employ work permit holders as a period in which they are able to train UK resident personnel.
Work permit scheme
However we have seen a huge increase in the number of work permits granted for IT occupations over recent years. In 2005, 30,000 overseas IT workers came into the UK via the work permits system, compared with 1,800 ten years earlier in 1995. Between 2001 and 2004, some 110,000 work permits were issued in total for IT occupations, representing no less than 20 per cent of the total work permits issued for all occupations, despite the fact that IT occupations represent only 3.5 per cent of the workforce.
Pay rates
From pay data information available to Amicus, 66 per cent of IT work permit holders are paid less than the equivalent of £30,000 per year. Given that the average salary of an IT professional is £32,500 in the UK, on the face of it the majority of IT work permit holders would appear to be paid less than the industry average salary.
Effect on IT professionals
The question which needs to be asked is whether the skills represented in these figures are not available in the UK, which would be a justifiable use of the work permit system, or whether these companies are bringing in non-resident work permit holders at below going pay rates in the UK, which would not.
The need for investment in skills and learning
While the work permits route is readily available and can be used to bring in required skills, there will be less incentive for UK employers to provide the necessary longer-term investment in skills development and learning. This will have serious long-term consequences for the IT industry, as the necessary skills are not available or in short supply, and overseas competitors’ staff are trained in new technologies, which in turn serves to reinforce the process of international outsourcing (offshoring) by moving IT projects beyond the UK. The result is that resident staff are not trained in new technologies, and the UK skills base is undermined and eroded.
'Yes'
In 2002 my employer undertook an outsourcing deal, passing the IT development and support work for a number of out IT systems to TCS (part of the Indian TATA group). As the work was being transferred overseas the UK IT specialists trained the Indian workers in the UK and were then compulsory made redundant.
The Indian workers then remained in the UK on their Indian wages(+ UK support allowance) and worked from the very desks the British employees used to occupy.
TCS management refused to meet with the Union.
Our Employer denied responsibility for TCS's actions.
Today Indian workers are still here, though any one individual normally only resides here for 18 to 24 months before being replaced by a colleague
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Posted by: Tim | Monday, 22 January 2007 at 11:36 AM
Yes!
I recently worked for a large consultancy firm on a government project. At least half the consultancy team were foreign staff on short-term visas, which were renewed on a rolling basis i.e. every few months the staff were sent home for a few weeks then flown back on fresh visas. None of them had especially rare skills that could not have been sourced within the UK - I knew UK developers with precisely these skills who were out of work at the time. Some of these foreign staff were very good, others were inexperienced or just plain incompetent. But it did not matter because they were all on Indian salaries plus tax-free UK expenses, while being charged out to the client at the same rate as the few UK contractors on the project (which was itself about twice the actual rate paid to the UK contractors), so the consultancy was making a vast profit on them. It was more profitable for the consultancy to keep bringing in foreign workers to cover for their incompetent colleagues, than to hire an experienced but more expensive UK developer to replace them. Meanwhile, the government client was barred by Treasury rules from hiring its own contract staff directly, even though that would have been much cheaper and more beneficial to the project than paying inflated rates for poor quality foreign staff on revolving-door visas. And the bone-headed government isn't even making any money on tax revenues from these deals, because neither the foreign staff nor the consultancy companies pay much in the way of UK taxes.
Posted by: WelshBloke | Friday, 11 January 2008 at 03:01 PM