5 ms·
I appreciate that Wired is writing about this topic. That said, I don't know anyone who works in tech that is not aware of the following facts: 1. Body shops
by tristor 10y ago
I appreciate that Wired is writing about this topic. That said, I don't know anyone who works in tech that is not aware of the following facts:
1. Body shops overwhelmingly exist to abuse the H1B visa allocation system
2. Contractors cost more than FTEs, but it can be booked as CapEx instead of OpEx so looks better during reporting
3. Body shops generally supply subpar labor. People with cooked resumes that are incapable of performing at the same level as their non-body shop title peers.
4. Body shops overwhelmingly arbitrage the fact it's near impossible to legitimately acquire H1B visa allocations and the broken rules about job changes for immigrants on H1B visas.
5. All of this adds up to body shops treating immigrant workers horribly while at the same time largely defrauding their customers and the government offices responsible for visa allocations
TL;DR: Body shops are evil, everyone knows this, management doesn't care because it looks good to shareholders.
- gonzo 10y agoNeither I-99 nor W-2 wages are "capex"
- tristor 10y agoThe business hiring a body shop typically does not directly pay any wages. They pay a per project fee or a contracted per headcount rate, both of which are treated as CapEx and amortized as a project cost. The economics are different for bringing in headcount unrelated to project work, but project based workloads are typically where body shops find their niche.
- zwily 10y agoWork that you contract out and record as CapEx would be CapEx even if FTE's worked on it too. Still not sure what was meant by that point.
- CydeWeys 10y agoThe people with H1Bs are full-time employees of the body shops that the jobs are contracted out to. Otherwise they couldn't get those visas. But they are contractors from the point-of-view of the company that is paying the body shops, and that's the point he's making.
- zwily 10y agoI get that, but what does it have to do with CapEx vs OpEx?
- riskable 10y agoOutsourced labor is logged as CapEx in SEC filings and is a means of hiding labor expenses to improve EBITDA (which is used as a primary indicator of business health). If businesses had to report outsourced labor as OpEx instead of CapEx many would see drastic changes to their EBITDA and their stock would drop (for good reason: They're hiding important investment information). The SEC has supposedly been planning to fix this problem for years but has done nothing.
- solarengineer 10y agoThis reminds me of the book "Sold out" by Michelle Mankin and John Miano [0]. Another commonly used trick is to send people on L1b or B1 visas. H1Bs are on lottery, these other two aren't. [0] https://www.amazon.com/Sold-Out-Billionaires-Bipartisan-Crapweasels-ebook/dp/B00VBW3SYQ https://www.amazon.com/Sold-Out-Billionaires-Bipartisan-Crap...
- claviola 10y agoB1 is considered a visitor visa. You cannot legally work under it.
- gnipgnip 10y agoIndeed. It's rather hilarious when you hear these arbitrage traders speak about "innovation, research & creativity". http://scroll.in/article/741723/full-text-narayana-murthy-questions-the-contribution-of-iits-and-iisc-in-the-last-60-years http://scroll.in/article/741723/full-text-narayana-murthy-qu... http://timesofindia.indiatimes.com/india/Narayana-Murthy-runs-a-body-shop-tweets-Chetan-Bhagat/articleshow/10237098.cms http://timesofindia.indiatimes.com/india/Narayana-Murthy-run... India, if you understand how its education system is setup, is essentially a labour market for producing service workers for the Anglosphere. I'm not the slightest bit surprised that India is dirt poor, while Indians form the richest ethnic group in the US.
- dominotw 10y ago>India, if you understand how its education system is setup, is essentially a labour market for producing service workers for the Anglosphere. There is no social security in India so many times aging parents solely depend on their kids for their livelihood. So its ingrained in culture to push your kids into studying what might be profitable than what is interesting to the kids.
- murukesh_s 10y agoAnglosphere? You are wrong. Majority of non resident Indians work in middle east. (Or wherever there is a way to make better money). Regarding social security you are right but that is not the reason parents push kids into studying. They believe(foolishly) that giving better education to the kids is their life purpose. It's infused so by the culture and society.
- gnipgnip 10y agoTrouble is, this entails studying entirely in a foreign language for 16 years. See: http://koenraadelst.blogspot.in/2015/11/propagating-english-to-help-india.html http://koenraadelst.blogspot.in/2015/11/propagating-english-... Many at this point jut in by saying "English is ours, you Heathen!", but really though it is not. India's English proficiency index was lower than China and Japan in 2011 [2] (before magically jumping up). I've been extremely disappointed with India. There is very little awareness of political systems, even while many get drawn into pompous nationalism. Everyone is obsessed with how the best of Indians leave for the US, and are greedily optimizing for how to get a share of that sweet sweet dough. This from language teachers,writers to engineers, scientists. When Sanskrit/Kannada teachers start spouting English for class signalling, you realize there is no hope for India (much as with Africa). It's not surprising that the power centers of Indology are in the US. Also see, [1] http://sankrant.org/2011/03/the-english-class-system-2/ http://sankrant.org/2011/03/the-english-class-system-2/ [2] https://www.amazon.com/Decolonising-Mind-Studies-African-Literature/dp/0435080164 https://www.amazon.com/Decolonising-Mind-Studies-African-Lit... [3] http://www.ef.co.th/sitecore/__/~/media/efcom/epi/pdf/EF-EPI-2011.pdf http://www.ef.co.th/sitecore/__/~/media/efcom/epi/pdf/EF-EPI...
- dominotw 10y agoEvery attempt to fix legal immigration in the past has gone through the propose a fix -> club it with proposals dealing with illegal immigration -> stalemate -> back to step1
- chrisseaton 10y ago> I don't know anyone who works in tech that is not aware of the following facts I've never heard or witnessed any of these body shops or contractors. Do they just work at places like banks' IT departments so I may not run across them?
- ChuckMcM 10y agoIn my experience if you have a LinkedIn title of VP they will find you and try to sell you their services.
- sundaeofshock 10y agoThey hit you up as long as you are in any kind of resource management role: manager, director, VP, etc.
- MrFoof 10y agoYou've never heard of Robert Half or Randstad? They supply a large number of contractors (across multiple segments, not just IT) in most major US metros. As others have said, if you are VP level (or Director level), it's impossible to not know about them since they'll be trying to get your ear on a regular basis.
- chrisseaton 10y agoYes I even used to a contractor for a US company via Randstad! So maybe I'm one of these people myself without even knowing it and that's why I don't think of them as being sub-par labor incapable as performing at the same level as full-time employees.