Telegraph
By Philip Aldrick, Business Correspondent (Filed: 26/12/2005)
Indian technology workers are flooding the UK on temporary permits, undercutting local wages and raising the prospect of a homegrown skills shortage, an IT association claimed
Salaries for certain IT workers have fallen in recent months, according to the Association for Technology Staffing Companies. ATSCo chief executive Ann Swain said: "Wages are being undercut by companies bringing over Indian workers, who are put up in hostels and paid poorly."
Home Office immigration figures show that 21,448 foreign IT workers have been issued work permits this year, a 15pc increase on 2004 and almost double the level five years ago. Of those, 85pc now come from India.
Separate research from PayScale, a pay monitoring firm, shows that an experienced software programmer in India receives £6,600 a year compared with £33,000 for his counterpart in the UK.
After paying their travel, permits and living expenses, the Indian workers are "charged out to clients at around half the rate asked for a similarly homegrown IT expert [£350 a day against £650]", Elizabeth Gordon-Pugh of outsourcing consultant Alsbridge has estimated.
She added: "One Indian supplier operating in the UK has around 80pc of its 2,000 [plus] staff in the UK comprised of Indians on assignment from a few weeks to several years."
ATSCo's research shows that the "commoditisation" of IT services has reduced average salaries for permanent IT helpdesk workers by 3pc this year to £17,538 and for temporary workers by 25pc to £12 an hour.
Ms Swain warned that the trend, known as "onshore offshoring", could lead to a damaging skills shortage. She said: "How will organisations recruit IT staff for mid-to-senior level roles if there are no entry-level jobs left in the UK? The fall in the number of graduates choosing IT careers will filter through to chronic shortages at the top in years to come."
Her concerns echo those of David Fleming, the Amicus national secretary for finance, who has warned that the UK could be left as a nation of "fat cats and hairdressers, with nothing in between" if the offshoring of back office jobs and manufacturing continues. Deloitte Consultancy has predicted that 2m jobs currently based in Western economies will migrate to India by 2008.
According to industry sources, most consulting companies offer some form of "onshore offshoring". IBM, LogicaCMG, Accenture and CapGemini all transfer Indian workers to the UK for projects, as do Indian consulting firms Tata Consulting Services and Infosys.
One senior UK "onshore offshoring" figure claimed: "The real reason why companies are turning to people from the Indian subcontinent is that UK graduates can't compete with the quality of India's technology graduates. The level of intelligence and attention to detail is lacking in UK staff coming through the education system."
Work permit rules state that, before making a transfer from India, companies have to advertise the job in Europe showing there is no one local with the skills available.
The internal appointment must also be paid a similar salary.
