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Landing savings

It was interesting to note the recent article in the Mail regarding Lloyds and Cap Gemini. In order to meet contractual commitment for work being done in the UK, Cap Gemini are 'landing' their offshore staff into England to complete work onsite. This creates a reasonable saving with daily rates no doubt in the order of £300 - £350 as opposed to local contractors at £450 - £800.

Is this wrong ? If continued at scale it will no doubt lead to a reset of contractor rates which could make this format of employment less attractive than being a full time employee. What about Full Time Employees ? Well at £50,000 salary the fully costed rate should be in the order of £300 per day. Of course the issue here is the lack of flexibility when it comes to FTE's. They are not so easily hired and fired (and rightly so).

So on a large scale this migration of offshore resources to onshore would cause a serious alteration in the current pay system. I see three possible outcomes:

1. UK based resources become cheaper through lower salaries

2. Offshore resources realise they could earn more locally and defect, maintaining the current payscales

3. The government steps in

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