Work and Salary Expectations

[jb5]

A bargain they often need to remain in business. But really, it's not a bargain, it has become part of just about every company's business model to do what they can do cheaper elsewhere. That may be India, China, eastern Europe or Argentina.

In fact, for young companies seeking investor money, it is often a condition to get that money that they outsource everything they can.

And outsourcing has tremendously helped the economies of many countries. It has eradicated poverty in many places. Whether some here realize it or not, it has brought hundreds of thousands of well paying jobs to AR.

If most of the companies can't keep employees happy, the loss of jobs will tremendously impact the country

 

[Matt84]

So what is the bottom line? We have employers and employees weighing in. No one has moved beyond the politically correct.

So citygirl tells us her company is passing over Baires for new projects. And others are saying their fellow employees will look for new jobs if they don't get big raises.

Global companies can't give big raises, so does the average employee find a company that can? And what companies can in the current global economy? Where does it go from here? What company can possibly keep up with inflation and make everyone happy?

I dont like the adversarial relationship between employer and employee

It doesn't have to be, just change the title employer to buyer of time, and employee to seller of time.

Outsourcing is done because there is a cost benefit.

Additionally, the vast majority of my clients have had salary freezes, travel restrictions, etc. If they don't give their own internal employees raises, they certainly are not going to give an outsourced provider a huge increase because my costs in Argentina have increased. That's not the way it works.

Again - it is what it is. We will not put new projects here and if costs continue to increase, we'll simply look at another hub for our LATAM business. Again, from a personal note, that would sadden me as this is my home and I want to contribute. But if it becomes cost-prohibitive for our business, we'll look at one of the many other more stable options. FWIW - I oversee projects in lots of other countries and Argentina is by far our most expensive. It costs me less to do business in Europe than it does here.

Shrug it off

Montevideo is rather nice, Carrasco is growing and around there the water turns swimable.

Sellers of time in Argentina actually think their time costs a lot more than other people's time. I'm sure you can see that outside the office and I'm sure that's partly what makes Argentina charming.
If you want employees that actually appreciate their jobs and the opportunity for an intercultural exchange go for the rare individuals from the interior and inmigrants from paraguay, bolivia and peru who haven't yet learnt that charmingly French sense of entitlement. Have you noticed the booming Chinese minimarkets only hire that sector of the workforce? With some head-hunting you can find the computer literate.

Offspring of the earlier European immigrants are somewhat correct in their righteousness, they shouldn't be looking for a job, they should be building companies.

Btw, you said you weren't entitled to make a profit. You are indeed not. You have the right to make a profit, just as you have the right to live your life.

That horrible paragraph of the Reformed Constitution speaks not about Rights but about Entitlements. I'm not sure how to translate these two concepts into Spanish: Derechos es una cosa, "Victorias Sociales", or however they call Democratic Gangpressing, is another.

 

[Matt84]

I ask the employees? Wouldn't you be able to cope with inflation if you received 100% of your salary instead of just -optimistically- 2/3 of it? And how about the 1/5 you donate every time you buy a loaf of bread?

Don't you get it?
The way one uses words, titles, act accordingly, consolidate trends and pass laws affects back the way one thinks about the situation.
In a kiosk, the owner lets a good share of his stock in display because of the implicit tit for tat trust between him and the neighborhood he operates in. When someone buys an item something magical happens: both parties thank each other for what has just happened. The last thing you say and hear after you conclude a simple, mutually beneficial transaction is: Gracias, Gracias. Neither you or the kiosk owner thank the ticket which you may or not demand and its 21% statement of obligation to pay - or else.

There was the pattern and it never changed. The one enemy, blameable for all human distress, for unemploy-ment, for low wages, for the depression of agriculture, for want in the midst of potential plenty—who was he?The money-changer in the temple. This was a Biblicals ymbol and one of the most hateful. With what modern symbol did this old and hateful one associate? With the Wall Street banker, of course; and the Wall Street banker was the most familiar and the least attractivesymbol of capitalism. Therefore, capitalism, obliquely symbolized by themoney-changer scourged out of the temple, was entirely to blame; capitalism was the one enemy, the one objectto be hated. But never was it directly atacked ornamed; always it was the old order that was attacked.The old order became a symbol of all human distress."We cannot go back to the old order," said the President. And this was a very hateful counter symbol,because the old order, never really defined, did in factassociate in the popular mind with the worst debacle inthe history of capitalism.

 

[TrevorCito]

Economics 101 - in a completed transaction, the buyer and seller always agree on price but never on value.

Marketing 101 from kotler, value equals benefits/cost.

 

[Matt84]

Economics 101 - in a completed transaction, the buyer and seller always agree on price but never on value.

Marketing 101 from kotler, value equals benefits/cost.

Which denotes the distinctive individuality of each human experience. If they both agreed on the value there would be no transaction to speak of, no division of labor (that's Ec 101 btw), and no specialization, that is, no pursuiting of your own distinct interests, that which makes life worth living.

In simply optimal, not ideal, cases when I take a cab it's because I value more the time it saves me than the money it takes me, or when I buy something at a kiosko instead of at a chino or wholesale because I value more the flexibility of small retails than having to organize all my groceries for the next months in advance. Likewise, the kiosk owner, optimally, doesn't mind organizing the needs and cravings of a neighborhood by running a small biz and making a living out of it.
The employee values security more than risk and is compensated, accordingly. An employee can actually chose to stop being one if so s/he desires and when that happens it's better for everybody.

The only person one should work for is oneself, and those who one values and loves. The product of that work (be it a service as in labor, or a product, which is almost interchangable) can then be sold openly, contractually and voluntarily with no force or implicit threats involved.

 

[marksoc]

Interesting to see how "the other side" (the capitalists) think. Interesting to see how the cannot fathom the reasons for the behavior of workers.

 

[Guillo]

As mentioned before, the choripanes are a big plus for me . Che, regardless of our differences...I bet over a few drinks and chori's, we'd get along great. I'm a die hard capitalist and I know that isn't popular in Argentina and not much on this site either...still, regardless of how passionate I am about my ideals, I appreciate that others have different ones.

Un abrazo fuerte y espero que nos vemos en algun momento!

I'm up for it any time. I advice you to read through the whole thread, so you can see that if I got defensive, its because you started your first participation in the thread with "You have a flawed mentality" and that kind of thing. And you do seem to be quite disconnected from the realities of Argentina at some things.
Its an online forum, discussions happen.

 

[Guillo]

Yeah I dont know anything
Btw, here's an article on the last time that the customer was consider co-responsible for the outsourced employee: http://legales.iprofesional.com/not...a-condena-a-Petrobras-a-indemnizar-a-empleada
And its rather the norm in lawsuits down there.
I'm sure that doesn't happen in Singapore.


You quote a lawsuit (how very Argentinean) to demonstrate shared responsibility..please! Having worked in IT outsourcing for years I am shocked to hear of outsourced IT staff suing their placement companies (IBM etc) without any conscience...its the usual short termism mentality...dont they know the concept "Dont burn your bridges"..its beneath these educated people ahd the country to behave in such a pathetic litigious manner...

And so says someone coming for the sue happy us.
I'd only sue someone as a last resort, but I understand if someone stands for their rights.
I'll explain how it usually goes. Someone is hired as an outsource. He works for the customer, in the customer premises, with the same work schedule and often doing the same work as employees of the customer. Only difference is benefits (the employee of course receives 2x or 3x the salary, and a bunch other things, while the outsource usually does the hard work).
The customer decides at some point (4-5 years) that he doesn't want the outsource any more for any reason. The outsourcing company ends up firing the guy/gal. Many times, not paying all the employee is due. The employee sues both, because he was under what is called "Relación de dependencia encubierta". It doesn't matter that the customer said he was hiring a service from someone, the outsource was doing the same work as their employees and was (except for benefits) expected to behave like one, not like a temporary worker or a specific service. Showing the resource as "outsource" was only a way to avoid proper payment.
And close to 100% of the time the lawsuits end in favor of the employee.

 

[citygirl]

Guillo - What you're talking about it much more traditional contract labor. Which is an entirely different thing than outsourcing business services and yes, there can be risk to the end client (called co-employment) with traditional contract labor.

Outsourcing is entirely different. In my case, the clients outsource a portion of one of their business processes to us. The end users and the service beneficiaries in this BPO not even in Argentina. They're in the US and Canada and Brasil, etc. Let's say the client has outsourced their payroll processing to us (that's not what we do but for example's sake). So basically Company X comes to me and says "How much for your company to perform this BPO (business process outsourcing) and process all my payroll?" I say "It's X dollars a year for this service". We agree to a contract and then I have to use my employees to deliver this service - wherever my employees happen to be doesn't make any difference.

And back to one of your earlier comments about outsourcing (which I now understand you were thinking of contract labor) the pricing doesn't work like that - I don't charge the client 100 and pay the employee 30 and I keep 70 (although it would be nice if it did) And even if it did work that way that difference has to pay for a lot of things. In essence how it works is that I tell a client the contract for a year of outsourced service is X dollars. And obviously those X dollars have to be cheaper than what the client would pay to do it themselves (hence why you do it in low-cost geos)

Out of those dollars, I have to:
1) Pay my employees - and remember that's 13 months of salary, not 12
2) Pay the payroll taxes on my employees
3) Pay VAT tax
4) Pay my overhead (depending on company): Rent, office supplies, communication, transportation, etc, etc
5) Pay my providers - legal services, payroll services, etc
6) Corporate income tax - 35%

And hopefully make some money at the the end of the day of course

Now do you see how complicated it gets. I have a pool of X dollars a month to spend. If item #1, 2, 4 and 5 increase by 25 or 30% - that pool is quickly going to run dry. That's the issue.

And to jrockstar80 -- there are no employees being hired here for 9.000 USD a year at a professional level. It's much, much more.

ETA : Matt - great to see you back

 

[Guillo]

Guillo - What you're talking about it much more traditional contract labor. Which is an entirely different thing than outsourcing business services and yes, there can be risk to the end client (called co-employment) with traditional contract labor.

I see the difference now in the details. I've only know of a company doing that here (Gestión Compartida) which I think was detached from the Clarín group at some point and now serves a bunch of companies. All local, I guess. I can see how hard is to make that business model work from here for international customers (if not impossible).

Outsourcing is entirely different.[...]

Here outsourcing is used for both the you explained (bp outsourcing) and contract workers. Back in the day (say, 15/20 years ago) IT companies used to be chosen for projects, manage it themselves and give the result back to the customer "llave en mano" (as in, finished complete, functioning product). At some point, this started to change, and customers started preferring to manage the projects themselves. From then on, what was clasically a "service provider" position started to shift to something that its mostly a second class employee kind of thing.
The term outsourcing was kept. But business wise, is a totally different thing.

And back to one of your earlier comments about outsourcing (which I now understand you were thinking of contract labor) the pricing doesn't work like that - I don't charge the client 100 and pay the employee 30 and I keep 70 (although it would be nice if it did) And even if it did work that way that difference has to pay for a lot of things. In essence how it works is that I tell a client the contract for a year of outsourced service is X dollars. And obviously those X dollars have to be cheaper than what the client would pay to do it themselves (hence why you do it in low-cost geos)

Well, you don't get to keep 70. Of that 70 you need to substract your costs (such as taxes, and infrastructure, which IT companies of this kind try to minimize, and courses for the employees to keep them up to date). Still, if you manage this kind of company right, and manage to place a bunch of people, it can make a nice profit with really low overhead as long as you keep your infrastructure costs low.

[costs snipped]
And hopefully make some money at the the end of the day of course

Of course, otherwise what's the point?

Now do you see how complicated it gets. I have a pool of X dollars a month to spend. If item #1, 2, 4 and 5 increase by 25 or 30% - that pool is quickly going to run dry. That's the issue.

I guess that many of those costs will be inflation indexed. They usually are when they are labor intensive. If your source of income can't be, you are going to be in a though spot unless the wind starts blowing in some other direction. But I woudn't expect that to happen, at least until election time.

To the other guys: see? Its not hard to have a civil discussion. Some times you need to try to be on the other side shoes for a while to see their point