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Time for IT to Organize?

By Oldefar ·
I have stated from time to time that perhaps it is time for IT workers to think about organizing. I ran across this link in the Dallas Morning News today - http://tinyurl.com/ixhg.

The link is for US workers and is sponsored by the CWA, a US union. However, anyone working in IT who feels they are being exploited should look at this site.

So what is the answer? Is it time for IT workers to look to unionization? Is there an alternative approach such as cross company and cross border trade guilds that work on behalf of all IT workers? Or do we all simply press on looking out for number one?

Personally I think the issues go beyond single companies and single countries. The Indian developer pulling work away from the first world developer today will see the Chinese developer pull it from him tomorrow. Work will move tomorrow even easier than today. Call centers, NOCs, data centers, and all aspects of engineering and production are no longer tied by geographic constraints.

I see no incentive for company management, rewarded by short term profit margins, to take a broader or long term perspective. However, the same technology that makes my job so portable makes every IT worker my peer and coworker. In the end, we are talking about how we, the global IT worker community, makes our livelihoods. That is a sizable community if we make it one.

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Symptom Of A Larger Problem

by JackOfAllTech In reply to Time for IT to Organize?

The real problem is greed, pure and simple. There are only a handful of companies with REALLY long-term visions (20 years). Instead of understanding that there will good years and bad years, they all are focused on this years' bottom-line - the almighty dollar. For example, last year a company made 11 million dollars net profit but this year they ONLY made 8 million dollars net profit. Holy Cow!! We need to cut costs! Let's lay-off the grunts who actually know what they're doing and outsource to some Indian company. They just don't seem to realize the hidden, long-term costs involved in this. Lower productivity, lower morale, lower customer satisfaction, lower employee loyalty, etc.

I don't know what the solution is but if something isn't done soon, this whole service-industry economy will take a nose-dive and we'll all be screwed!

Ralph

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Metrics of Labor Costs

by Oldefar In reply to Symptom Of A Larger Probl ...

It seems that understanding the cost of labor would be a good beginning.

First off, look at the distribution of labor costs, from senior management on down to the lowest paid position. Identify fixed versus variable costs in these areas, and include all costs that go directly to the labor. This includes stock options, benefit packages, and severance packages.

A key problem is that most of workers are primarily fixed costs rather than variable. Perhaps a starting point is a lower base and higher performance bonus formula.

At the top levels, look at those bonus figures. If moving labor off shore will save 20 million in fixed cost, should the senior management really receive 10 or more percent of that?

A better balance in compensation formulas between senior management and workers will also improve the picture. A higher base and lower bonus at the top, the inverse at the bottom, and everyone is better incented to make the company successful. Also, layoffs are avoided or delayed if the base is lower.

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For those seeing the jobs arrive

by Oldefar In reply to Metrics of Labor Costs

This is an international forum, and I am sure that some of the readers are from the same locations where these jobs are moving.

I urge you to think hard about your own employment compensation. In the US at least the ratio of top management compensation to worker compensation is 50-100 to 1 in corporations. If your pay is but a tenth of your western counterpart, that ratio jumps to 500-1000 to 1. Is this what you want? The bulk of the wealth your value provided stays in the west. Is this a good long term scenario for you and your children?

Look around at other countries. The management that sent jobs of their countrymen overseas for personal gain will not hesitate to move those jobs again. What is your strategy to hold onto the work?

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Excelent Point

by HAL 9000 Moderator In reply to For those seeing the jobs ...

Not only is there a much lower costs to Managment ratio but the same safety standards don't apply so these companies can gring these new workers into the ground and just spit them out once they have been burnt out without any conquences.
I can remember Everyready in India {I think} where even the most basic safety standards wern't followed killing hundreds and contaminating thousands more because of their lax/non-existant safety procedures. From memory they provided housing right outside the plant so that their workers didn't have to travel any distance to get to work but when the place went up and all the chemicals where let lose ionstead of only affecting a few people on site everyone around the plant was either killed directly or contaminated with the chemicals used.

It is not only cheaper labour rates that causes these companies to move offshore but cheaper production costs which almost always are a result of not having to have in place suitable safety standards. First it was the more dangerious industires who did this but now everyone has jumped on the bandwagon as if they manage to main or kill their workers they don't have the expence of having to pay for their negelience.
Then when that country gets too expensive to produce in or they are required to introduce a reasonable level of safety they just move the facilities to another country without these constraints.

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greed

by john_wills In reply to Symptom Of A Larger Probl ...

Greed is an ambivalent concept. A friend of mine during the 1970s refused a job which made use of his academic qualifications and took a much-lower-paying one for an ideological reason I will not try to elucidate. We can say that he was greedy for ideological gain but not for material wealth. But the ideological things he wanted to do(he thought that God was gay - you may have seen him in a rainbow robe in the SF Gay Pride parade) would have been more realizable if he had had a good income and decent working hours. In recent years, when he was suffering from clinical depression - a result of a rotten job and ideological frustration - and living on early retirement benefits I encouraged him to seek professional work, but he was not greedy enough, or his depression overcame his greed, but I suspect that a conscientious job search might have killed his depression, which has now killed him. So lack of greed killed him?
The greed concept is more ambivalent than this, of course: the short-termist managers rdschaefer describes might also be described as not greedy enough, or not intelligently greedy.

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Or we could call them accountants

by HAL 9000 Moderator In reply to greed

It is this group who always seem to take a profitable company and ruin it within a very short time generally. They are always looking at the current bottom line and to hell with the rest. At one company where I worked they brought in a new CEO who promptly sold off all our buildings and then proceeded to lease new offices ect well that first years prifits looked realy good but in actual fact the company hadn't made any more money thta in previous years all that had actually happened was that it had disposed of its assets which lead to smaller regional offices with no part supply infrastructure no customer support and very little ability to even service our current dealers. All the parts had to come from one centeralised storeroom and to cut costs there they didn't even look at the quanty of parts that where used Australia wide just waht was required in the head office prior to it becoming the main parts supplier the same thing happened for new units as well so we very rapidly had the situation where we didn't have the parts to repair units and there where no new units to sell. I'll give you two guses what happened to that company., but not until the CEO that was brought in retired with a massive Golden Handshake for making the company so profitable in his first year. Needless to say he wasn't there to reap the rewards of his actions or bear the responsibility for his actions either.

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Not all accountants..

by Peleke In reply to Or we could call them acc ...

Colin, I guess I can understand the reason for your perception of accountants, especially with recent events such as the Enron scandal in America. In your example you've pretty much described a situation, somewhat similar to Enron, where they SERIOUSLY "cooked the books" to deceive for unethical purposes with the final result being an unspeakable act of "take the money and run and screw everyone else". Except in your case the SOB got away with it. Like you, I totally abhor this kind of behavior and lack of ethics.

While we're on the subject of unions, the same is also true of some union management. Recently, in Hawaii, where I live, a top union leader was indicted for, among other things, money laundering and misappropriation of Union Benefit Trust funds (about $200,000.00). I'm sure he had to have the help of his accountants in setting up his "bogus corporations" and slowly skimming the money away, robbing his own "constituents" of their hard earned benefits. However, my point is this: the accountants were simply the "evil tools", not the reason for the evil.

I have been an accountant (actually my current focus is on computerized accounting systems) for 20 years now (private sector) and have always tried to operate within the "ethical" boundaries of the profession. I can say the same for the majority of my peers. However, at times I found that I had to "skirt the edge" in interpretation of certain Accounting guidelines in order to "please management and keep my job". However, I was fortunate enough to never to have to engaged in outright "illegal" or unethical practices. I am currently unemployed (hopefully not for long) partly because I got tired of management's disregard of the real value of employees and their blind focus on the current bottom line as you mentioned. The mentality that employees are "replaceable" and therefore can be treated as such, sickens me. . continued.

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continued..

by Peleke In reply to Or we could call them acc ...

..continued? This is why your postings and postings of the majority of contributors on this thread have impressed me. Because you all seem to be able to see the value of a good employee where others only see a "bottom line".

I guess what I'm trying to say is that not all accountants are unscrupulous enough to violate the code of their profession as was the case in Enron and in your case. The fact is, at least from my experience, more often than not, accountants end up being the "scapegoats" or the "evil tools" of management to help them "justify" their less than scrupulous intentions. Yes, if accountants choose that path then they are no better than the perpetrators but in my experience, it has rarely been the accountants who make the decisions. They usually either "guide" the decisions with information or misinformation as the case may be, or are told to present it in a way that "Management wants to see it"... whatever that may be.

I just thought I'd bring this up in case any of our readers thought you were just "trashing accountants" which I don't think is what you really intended. At least I hope not :-).

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Actually Peleke

by HAL 9000 Moderator In reply to continued..

I don't really have a problem with accountants only when they tell me how to run my business then I willl gladly tell them where they can insert their business models that they seem to want to kep fostering on me and my business.
Hower in all fairness a long time ago when I was in a partnership with a couple of other guys that I meet at Uni we set up a business designing & building race cars now that wasn't a clever idea in Australia as the market just isn't big enough but we had our fair share of success and the company got to a size where we had to employ an accountant for the day to day running of the finances as we poor enginers just didn't understand how to make money we could certianly spend it and still make a profit but it was hardly good business pratices.
But the accountant that we got was something else he single handelly managed to do his level best to destroy the company and cost us our biggest customer to boot.
We had a "new" Forumlar Vee "Last years model" which we couldn't sell so we lent it out to our biggest sales organisation for display purposes and as it was fairly expensive we just invoiced it out with a note on the invoice that this was a business requirment only and pay no attention as we would produce a refund when returned. Well this accountant came in and without a single question started legal action against this reseller for the unpaid 6 month old invoice. I should have thought that he should have a t least talked to one of the owners before going down this course of action but he knew best.

Anyway I got a phone call from this reseller who was for some unknown reason quite upset particuarly as he had court documents in his hand at the time and we where apparently not only sueing him for the non-payment of the car but also interest. So I reasured him and then went to both of my partners and asked them who started this action off as I thought that it was fairly counterproductive. Well lets just say that none of us knew a thing about it so we went into our accountants ofice to find out what had transpired. He just claimed to be following normal business pratices and even though he agreed to seeing the notice on the original invoice he claimed that thismeant nothing and he was going to get our money from the thieving nonpaying customer.
Well needles to say he was istructed to drop all this action and before he ever thought about anything like this he was to speak to at least one of us after all we owned the company and had the mistaken belief that we should have some actual control over how things where managed {As I say we where just silly engineres who had no business knolledge.} Anyway a diorect order from the owners should have been the end of matters and I rang up the gy who rang me and appoligised profuselly and explained that there had been a misunderstanding with a new staff member and now everything was soughted not to worry. That should have ben theend of matters bt that bloody accountant thought that he knew better than us and proceeded with the legal action.
The next thing that any of us knew was this guy drove in with the car on a trailer on the back and litterally tried to throw it at us it seems that someone had taken out an injunction and frozen his business in anticipation of a Court Rulling against him and he was to say the least very unhappy but no where as unhappy as us because we had directly instructed this guy not to do anything and the really idot thing here is that this particular business used to buy about 6 cars a year and always paid up front he was the type of customer that you didn't upset and he really did a lot for us well at least until this happened.
Well this incident lead to the instant dismissal of the person in question and a lot of expence on our part to fix things up with our customer who never fully trusted us after that for some unknown reason. It seems that having your business assets seized sought of bring out the worst in your beliefs.
Anyway the next thing that we heard from that particular accountant was a letter of Demand from one of our suppliers who incidently we where building a prototype for, for non-payment of supplies namely tyers for the car we where building for him and which he had stopped making progress payments on.

We filled a counter clain for our out of pocket expences in this matter it was a long time ago but we owed this company something like $3,000.00 and they had an outstanding bill of something like $500,000.00 in progress payments and a final payment owing of another 1 million.
Anyway after a lot of legal wrangling where the legal people got paid the who mess ended up withthe comany who we where suing for 1.5 million gaining a temporary injunction over us and a temperory administrator appointed who was nominated by the person who we where sueing. Once they got control they immediatly dropped the legqal action against their employer for some unknown reason and then sold off the entire company to him for the outstanding amount of money owing after all he was hardly likely to sue himself was he?

So you might understand why I'm a bit coloured when it comes to accountants as I haven't had very good experiences with them and even though this particular person ended up in jail for misconduct or something the damage had already been done. The only good point was when the person who finially got control of the company came to take control of his new purchace he seemed to slip on some oil on th efloor and we left him unconscious {actually one of decked him} but to a man when the Police arrived asking questions we all just said that we hew was ok when we left something must have happened after we left the place. The Police couldn't do much as there where three against one although I fairly sure that they had a fair idea of what had transpired. ANyway the person in question eventually parked the car in question in a tyre wall at something like 150 MPH and managed to wreck the thing but unfortantly we did tour job too well and the very nice person survived even though it did take over two hours to cut him out of the wreck. It was a pity about that but I'll survive.

So while I'm not against all accountants I've had some bad incidents with them as well. My current one just knows to handle the money that I makeand never try to tell me how to run the business as I've told him off once when he actually suggested that I didn't need all my currebt staff and to lay off a couple as well as not to bother carring all the spare parts as I could just order them as required and if they where out of stock at the time then the customer would just have to wait. Sorry but I don't do busines that way. And just to get even with him after I told him off he requested some work performed on his computer network and I went in and said I would gladly do the job but as the suppliers where currently outof stock he would have to wait up to two months for his new workstation as it was now the end of the finicial year and everyone in accordance with their accounts instructions had allowed their stock levels to drop. I think you get the idea.

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I understand your sentiment completely...

by Peleke In reply to Actually Peleke

After reading your response I sort of wish that I could have lived there and worked for you. I think, in another reality, we could have shared a successful business relationship in that I share your perception of what an accountant's function should be in an organization... Just keep the books in order, present them in an understandable and accurate fashion to the ownership, AND LEAVE THE BUSINESS DECISIONS TO THEM! When an accountant takes on the task of making business decisions, he no longer, in my opinion, is functioning as an accountant. I understand the importance of business relationships over just looking at the bottom line. AND I am an accountant. But I would never make an important decision without consulting the ownership first, even if I were given free reign to do so. Why? Because I realize that I lack the perspective that the owners have in making industry related decisions. To make "uninformed", self-serving decisions with a limited perspective on the industry only leads to eventual business suicide.

I don't know what that arrogant "idiot" you hired was thinking, but it's apparent that he had no concept of the "long run" nor did he have any respect for the business relationships of the ones who hired him. Apparently when you hired him, he totally misunderstood (or purposely ignored) his level of authority to have indiscriminately undertaken such drastic steps without consulting with the owners first.

What I see in this particular instance is a poor choice of personnel and a misjudgment of character. (He wasn't someone's relative was he? IS that how he got the job? :))

Anyway, thanks for sharing your perspective. It has made me realize that there are more idiots in my chosen profession than I realized. But please... we're not all like that :). I wish you continued success.

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