November 26, 2008 by roland.

Reading quite a few discussions today (many of them in an obviously Gartner funded thread on Tech Republic about the IT shortage), I began to wonder just when both the Department of Labor and the Justice Department will get involved. Somewhere, the DOL has its own “average base salary” database. I’ve seen links to it before, just didn’t go looking for it today. Instead, I went to Salary.com since it has a fairly good reputation for accurately gathering ranges in regions. (Who knows, they might even be repackaging the DOL information.)

Given today’s prior post, I searched for the title “Programmer Analyst” for the 63113 zipcode. I simply know the contract was somewhere in St. Louis and that was one of the many zipcodes listed for St. Louis. I cannot believe the surrounding zipcodes will have a massive fluctuation. How do I know this? I also looked up base salary ranges for a Chicago zipcode 60673 (again, one of many in the list).

Keep in mind these are base salaries for EMPLOYEES before benefits and bonuses are added in.

60673 somewhere in Chicago

Programmer I 50,397 to 65,151
Programmer II 59,859 to 75,286
Programmer III 73,726 to 91,314
Programmer V 98,300 to 118,161 (8 to 10 years of experience)

63113 somewhere in St. Louis

Programmer I 46,957 to 60,711
Programmer II 55,779 to 70,155
Programmer III 68,701 to 85,090
Programmer V 91,600 to 110,108 (8 to 10 years of experience)
95,504 to 115,744 if bonuses included

The rule with consulting is the rate which must be paid to obtain a qualified consultant is double the range of employee base salary for the same position. This has been the rule for many years. The consultant gets no bennies and there is a pimp taking a cut. So, we do some quick math using the bottom end of the salary range.

91,600 / 2000 = 45.8
115744/2000 = 57.872

If your employee was paid hourly they would make $45.80/hour. Doubling that means the bottom end of a billing rate to consulting firms would be $91.60/hour. Since the client was specifically looking for candidates with 7-10 years of experience, we are working in the correct salary range.

What the client is doing is posting a billing rate to the pimps involved which is less than their internal employee cost. Eventually they will use the lack of respondents as proof there is a shortage of IT workers, so they should be able to bring in H1-B and thus open the door wider for terrorists looking to gain easy access to this country. Those who think such statements are racist obviously don’t know about all of the people Homeland Security is sending home AFTER they’ve gotten here to work in IT. One company in that general vicinity was playing this game and bringing in H1-B workers. A few short weeks into one new-hire’s stint, HR found Homeland Security waiting in their office when they got in to work. The conversation was very short and very simple “He’s leaving today and you are paying for the transportation.” By the time they got done paying for everything they had roughly the cost of two U.S. born workers into this “money saving venture”.

That all brings us to the question of when is Homeland Security going to force the Department of Labor to crack down on this practice by engaging the Justice Department? The obviously have enough data to prove it is a gaping hole in National Security. The couldn’t have already forgotten the arrest of these people could they?

http://news.bbc.co.uk/2/hi/americas/4438593.stm

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November 26, 2008 by roland.

Recently I had an interesting discussion with a pimp about a contract opening. They had posted the contract opening on Dice and tagged the entry as “market rate”, but when the called me, they were offering a billing rate well below half of market rate. Several other pimps had called about this same contract, all quoting a billing rate far below market, but this one tried the “chat to him a while and see if he changes his mind approach.”

During the discussion they stated the Vendor Management System didn’t allow them to present candidates outside of the quoted rate range. I informed them that is where the first crime happened. They were rather shocked to hear this, but not as shocked when I told them the second crime happened when they advertised the contract billing rate as “market”.

“What crime is that” they asked.

“Wire Fraud” I responded.

After a long silence they queried “How is that Wire Fraud?”

“I am not a lawyer, but I’ve chatted with some about this very topic. The position has been falsely advertised on the Internet. You put ‘market rate’ as the billing rate even though you know very well $42/hr you are offering is less than half of the going billing rate for qualified candidates.”

“The client is only willing to pay this much” they responded.

“I am only willing to pay 50 cents for a gallon of gasoline at the pump, is that the current ‘market rate’ for gasoline?”

“No.”

“There you go. By not allowing candidates to presented at the actual market rate, your client has engaged in price fixing. By participating in it, so have you and every other pimp advertising the opening as ‘market rate’. Had you actually put the maximum billing rate in the opening you would have been operating within the law. You would also not get a single qualified respondent.”

“How is that price fixing?”

“From what I’ve been told by people who actually work in the field of law, they engaged multiple companies in a single industry on a mission to cap a price. The companies willingly participated when they advertised the opening as ‘market rate’ and all agreed (by method of the Vendor Management System) to not submit any candidates above that billing rate. The company has taken the childhood action of sticking their fingers in their ears and humming really loud to avoid hearing a truth they don’t wish to hear. The method they chose of accomplishing that, while a feature of their particular Vendor Management System, isn’t legal.”

“Oh. So you won’t consider taking the contract?”

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