This is a story about body shopping...

Because I'm a genius, I've figured out a brilliant business plan: buy low, sell high.

It used to be the case that companies would have their own IT staff, because it made sense to have people trained up and retain their skills, given how integral information technology is to every business in this day and age. Businesses would recruit technologists as permanent members of staff, and pay them a professional-grade salary.

Then, the IT crowd figured out that there was a skills shortage and that they were being underpaid for the amount of value that they were generating for their paymasters. Some IT professionals became technology entrepreneurs and others became IT contractors, selling their skills to the highest bidder.

As the year 2000 approached and panic spread about the millennium (Y2K) bug, IT contractors could pretty much name their price. It was quite clear just how valuable IT had become to big business and the running of the technological world around us.

Consultancies started to hoover up all the graduates coming out of the Computer Science degree courses at university, and also maths, physics, engineering and other technical disciplines too. There seemed to be an insatiable demand for anybody who had an aptitude for programming, so why not corner the market in anybody with the slightest ability to write software?

If you can hire a graduate for £25k per annum, how much do you think you could charge a client for a day of their time?

IT contractors probably charge circa £500 a day. The best get £700 to £1,000 per day. The worst get £300 per day.

£25k per annum equates to a cost of less than £70 a day, but you can't ask your fresh uni graduate to work weekends, you're going to have to give them some holiday and you're going to have to train them. Let's assume that our graduate is only billable for 26 weeks of the year and they cost a shitload to train and for taxes and other overheads. That means they cost the 'consultancy' (a.k.a. body shop) about £250 a day... in the absolute worst-case scenario.

A recruitment consultant will charge a 30% mark-up on an experienced IT contractor who's been working for 10+ years and is an absolute expert in their field: the best of the best. So, assuming the contractor is getting £700 a day, the company who needs them is paying £910 a day.

How much do you think our fresh graduate is charged to clients for, given they only cost the consultancy £250 a day? Answer: £1,200 a day and upwards.

This is the consultancy model: place a shitload of inexperienced people on client sites and charge a whopping 400%+ mark-up on them. Leave them to flounder and figure stuff out at the client's expense.

The IT contractor's role is now to go around cleaning up messes left by the poor kids who have the unenviable task of doing a job that they don't have the knowledge or experience to do, while getting underpaid to do it. The IT contractor's role is that of the grown up, the nanny, the only person who's even remotely worth the money.

Most companies are trying to trim their IT budgets and they got their fingers burned by offshoring a load of roles to India and other parts of Asia. You get what you pay for, unless you're paying for inexperienced graduates in this case.

For sure, graduates are smart nice people, strong communicators and they learn quickly. For sure, when "all that IT stuff is done" then you can say goodbye to all those pesky technology people without having costly redundancies.

The reality is that there's a load of crap software out there that's been developed by a bunch of amateurs, and it will fall to bits... if it even works in the first place.

It's professional suicide to write this stuff, but everybody's too busy making easy money doing bodyshopping that nobody important is going to read this. My IT expert friends might read this and chortle "yes that's so true!" but the consultancies are only interested in bums on seats. They don't care who I am or what I have to say: they only want me when the shit hits the fan and they need somebody to come and mop up the mess, as inevitably happens.

It pains me to see IT go from being a profession filled with experts and people who take pride in doing a good job, to being seen as some kind of dirty necessity. It fucks me off when the consultancies suck up to their clients and seemingly agree that there's no long-term value in having software experts in their firm.

"Get the job done, fuck off and let us go back to doing our business" seems to be the attitude. That's why the dinosaurs are dying and the startups are taking over. IT is your business, fools. Look at Amazon: are they a retailler or a technology company, first and foremost? Do you think Amazon is going to sack all their software developers now that they "have a website that works"?

The era of offshoring was a costly mistake that was brilliant for the consultancies, because they got to build huge development centres and skill up their own graduates at the expense of greedy Western corporations. Now the body-shop 'consultancies' in the UK have monopolised the IT contract market, flooding it with inexperienced people and charging top dollar for them.

I'm hoping - and not just for personal gain - that the whole thing comes full circle, and we'll revert to an era of experts being in demand and companies recognising that they need technologists as much as any other business critical function. Software's not some crap you can get on the cheap... it's an investment in the future of your company. One day, all businesses are going to be technology companies.

Tags: #career #computing