simon
08-02-2002, 11:20 AM
Yes. Consulting fees are expenses. And companies can capitalize it. Most
of the companies I work for do that (not just WorldCom, haha). Employee
payroll is a Payables item. The benefits like vacation can be accrued and
become Liability.
As a matter of fact, my friends who work for Cisco were forced to take their
vacation in order to lower the company's liability.... again, manipulating
the book and the balance sheet.
simon.
"mark" <drdiminished@yahoo.com> wrote:
>
>Simon, if it isn't too much trouble, could you do a little research to see
>if consultants are actually expensed and employees become liabilities.
This
>is a very interesting question you have raised here!
>
>Mark
>
>
>
>
>
>"simon" <substring0NOSPAM@hotmail.com> wrote:
>>
>>I agree on the part that companies are way over-paying the IT professionals
>>in the late 90s. In the DFW area, companies like Nortel Networks are paying
>>60K for newly grads with ZERO working experience. That is outrageous!
>And
>>that's bad management!
>>
>>But I disagree your assumption that the H1B workers are more skillful.
>Some
>>of them may be, but it is not always true. A company I worked before had
>>spent over 10 million dollars on a foreign consulting firm to develop a
>system.
>> This system is so badly designed that an in-house team can easily develop
>>a better one at half of the money they spent.
>>
>>So why the management did that? Simple. It looks great on the resume
of
>>the VP or Senior VP who championed this kind of projects. They like to
>be
>>associated with big budget projects that involve consulting firms and vendors
>>and what-not, and not with "cheap" in-house projects. If the system doesn't
>>work, they can always point finger to the consulting firm... and waste
more
>>money, ha.
>>
>>Furthermore, a major reason companies like to outsource is, IMHO, "creative"
>>accounting. With my limited accounting knowledge (so correct me if I am
>>wrong), I believe that payments to consulting firms are expense items while
>>payments to in-house staffs are liability items. Consultants are not included
>>in the "head-count", and companies do not have to pay any health benefit
>>or 401K to the consultants (most of them are H1B workers nowadays). This
>>will make their books look so much better to the shareholders. Another
>way
>>of "book cooking" if you will.
>>
>>Therefore, it is not really a "technology/skillset" issue but more of a
>"financial
>>strategy/personal egos" issue.
>>
>>Just my $0.02.
>>
>>simon.
>>
>>
>>"Someone" <someone@nospam.com> wrote:
>>>
>>>#1. All you're ever going to get is a copy & paste propoganda message,
>so
>>>don't be shocked.
>>>
>>>#2. In "their" minds, there is a demand for this foreign skilled labour,
>>>which is interpreted as a shortage of skilled labor locally.
>>>
>>>Two years ago, U.S. companies *had* to pay top dollar for any IT workers
>>>they could get their hands on. Now that the industry has taken a dive,
>they
>>>cannot *afford* these resources since the economy cannot support them.
>So
>>>these resources get laid off. With still a weak market, other companies
>>are
>>>looking for employees and cannot afford to offer the same salaries as
two
>>>years ago. So if you're one of these laid off workers and were making
$80,000
>>>last year, will you be looking at similar positions only offering $60,000?
>>>(or less?) It can be hard, because making more, often incured higher expenses.
>>>New house, new car/s, started a family, etc.
>>>
>>>#3. They see increasing the number of, and application fees as money in
>>the
>>>bank to train American students with current technologies. (I'm definitely
>>>not going to start an arguement about whether that money actually *goes*
>>>to education or not:)
>>>
>>>It is better for the economy as a whole to allow companies to recover
with
>>>skilled labor, creating many more jobs, than force companies to try and
>>recover
>>>with sub-standard candidates just to lower unemployment rates.
>>>
>>>All I would point out is that the currently unemployed surplus of workers
>>>that are certainly available may either be: A) too expensive for the industry,
>>>and resistant to the idea of lowering their asking price. Or B) not skilled
>>>enough to fill all of the requirements of companies trying to recover
successfully.
>>>
>>>As I recommended im my final response to Mark a while back. Perhaps focus
>>>on the use of the program, rather than merely the total numbers. Whether
>>>it's 60,000 or 500,000 wont make a bit of difference unless they seriously
>>>look at the methods for screening the companies that are applying for
the
>>>H-1B labor.
>>>
>>>It isn't as simple as saying that there are unemployed IT workers out
there
>>>so we shouldn't allow in H-1Bs. If the economy can't support the companies
>>>that need people, then those companies need ways to get the labor at prices
>>>that they can afford. Now many of those companies will likely try and
"cheat"
>>>by using the H-1B program to bring in labour for "less" than what they
>can
>>>really afford, and it is up to your government to ensure that these companies
>>>get a slap on the wrist for it. But at the same time, Local IT resources
>>>need to understand that a hurting market means that they will need to
absorb
>>>some of the pain themselves, by accepting lower pay until the market recovers.
>>>If a company needs (quantified skills value)X and can afford $Y, then
they
>>>should by all means use local labor that meets X and Y. But if Local labor
>>>cannot, or will not accept $Y, or cannot provide X, then you can't expect
>>>to force the company to pay more, or expect less. that would stunt the
>company,
>>>and lessens the chance of the market recovering.
>>>
>>>"Rich" <R@test.com> wrote:
>>>>
>>>>All,
>>>>
>>>>I sent Wayne Allard a letter about the need to eliminate the H1-B program.
>>>>I specifically mentioned the thousands of unemployed IT workers in Colorado.
>>>>The idiot sent me the following letter. Where in the **** is this guy
>living?
>>>>An alternate reality? Judging from his letter, his brain is fried.
>>>>
>>>>This genius totally ignores the fact that thousand of IT workers are
unemployed
>>>>in Colorado. Yet, he believes "It is important for us as a state and
a
>>nation
>>>>to have access to skilled professionals who will allow us to compete
in
>>>the
>>>>global market and to keep up with the cutting edge of technology." Does
>>>this
>>>>idiot even do any research? What about the thousands of unemployed IT
>workers
>>>>in Colorado? I guess his "corporate" contributors are more important
than
>>>>his constituents.
>>>>
>>>>If you are looking for a good laugh, read on.
>>>>
>>>>Rich
>>>>
>>>>--------------------------------------------------------------------------
>>>>
>>>>Dear Sir:
>>>>
>>>>Thank you for your letter regarding the issue of H1-B visas. I
>>>>appreciate
>>>>hearing your thoughts on this very important issue.
>>>>
>>>>Senator Hatch's S.2045 passed both the Senate and the House of
>>>>Representatives and was signed into law by the President on October 17,
>>>>2000. This law temporarily raised the number of visas the federal
>>>>government allowed annually for highly skilled workers from 115,000
>>>>this
>>>>year to 195,000 annually through FY 2002. These H-1B temporary visas
>
>>>>were
>>>>given for a six-year period to foreigners with special skills,
>>>>principally
>>>>in high tech and health care, that were in short supply domestically.
>>>>
>>>>Colorado has become a leader in the high tech industry and we have been
>>>>faced with a shortage of skilled high tech workers much like the rest
>
>>>>of
>>>>America. It is important for us as a state and a nation to have access
>>>
>>>>to
>>>>skilled professionals who will allow us to compete in the global market
>>>>and to keep up with the cutting edge of technology. In order to do
>>>>this
>>>>we need to train American workers and make available the resources so
>
>>>>that
>>>>they can replace the temporary workers we have today. This law requires
>>>
>>>>a
>>>>modest increase in the fee application fee for H1-B visas which goes
>>>>toward the funding of programs to encourage more young people to study
>>>>mathematics, engineering and computer science and to train more
>>>>Americans
>>>>in these areas.
>>>>
>>>>Again thank you for writing and I look forward to hearing from you in
>
>>>>the
>>>>future.
>>>> Sincerely,
>>>>
>>>>
>>>>
>>>>
>>>> Wayne Allard
>>>> United States Senator
>>>>
>>>>
>>>>
>>>
>>
>
of the companies I work for do that (not just WorldCom, haha). Employee
payroll is a Payables item. The benefits like vacation can be accrued and
become Liability.
As a matter of fact, my friends who work for Cisco were forced to take their
vacation in order to lower the company's liability.... again, manipulating
the book and the balance sheet.
simon.
"mark" <drdiminished@yahoo.com> wrote:
>
>Simon, if it isn't too much trouble, could you do a little research to see
>if consultants are actually expensed and employees become liabilities.
This
>is a very interesting question you have raised here!
>
>Mark
>
>
>
>
>
>"simon" <substring0NOSPAM@hotmail.com> wrote:
>>
>>I agree on the part that companies are way over-paying the IT professionals
>>in the late 90s. In the DFW area, companies like Nortel Networks are paying
>>60K for newly grads with ZERO working experience. That is outrageous!
>And
>>that's bad management!
>>
>>But I disagree your assumption that the H1B workers are more skillful.
>Some
>>of them may be, but it is not always true. A company I worked before had
>>spent over 10 million dollars on a foreign consulting firm to develop a
>system.
>> This system is so badly designed that an in-house team can easily develop
>>a better one at half of the money they spent.
>>
>>So why the management did that? Simple. It looks great on the resume
of
>>the VP or Senior VP who championed this kind of projects. They like to
>be
>>associated with big budget projects that involve consulting firms and vendors
>>and what-not, and not with "cheap" in-house projects. If the system doesn't
>>work, they can always point finger to the consulting firm... and waste
more
>>money, ha.
>>
>>Furthermore, a major reason companies like to outsource is, IMHO, "creative"
>>accounting. With my limited accounting knowledge (so correct me if I am
>>wrong), I believe that payments to consulting firms are expense items while
>>payments to in-house staffs are liability items. Consultants are not included
>>in the "head-count", and companies do not have to pay any health benefit
>>or 401K to the consultants (most of them are H1B workers nowadays). This
>>will make their books look so much better to the shareholders. Another
>way
>>of "book cooking" if you will.
>>
>>Therefore, it is not really a "technology/skillset" issue but more of a
>"financial
>>strategy/personal egos" issue.
>>
>>Just my $0.02.
>>
>>simon.
>>
>>
>>"Someone" <someone@nospam.com> wrote:
>>>
>>>#1. All you're ever going to get is a copy & paste propoganda message,
>so
>>>don't be shocked.
>>>
>>>#2. In "their" minds, there is a demand for this foreign skilled labour,
>>>which is interpreted as a shortage of skilled labor locally.
>>>
>>>Two years ago, U.S. companies *had* to pay top dollar for any IT workers
>>>they could get their hands on. Now that the industry has taken a dive,
>they
>>>cannot *afford* these resources since the economy cannot support them.
>So
>>>these resources get laid off. With still a weak market, other companies
>>are
>>>looking for employees and cannot afford to offer the same salaries as
two
>>>years ago. So if you're one of these laid off workers and were making
$80,000
>>>last year, will you be looking at similar positions only offering $60,000?
>>>(or less?) It can be hard, because making more, often incured higher expenses.
>>>New house, new car/s, started a family, etc.
>>>
>>>#3. They see increasing the number of, and application fees as money in
>>the
>>>bank to train American students with current technologies. (I'm definitely
>>>not going to start an arguement about whether that money actually *goes*
>>>to education or not:)
>>>
>>>It is better for the economy as a whole to allow companies to recover
with
>>>skilled labor, creating many more jobs, than force companies to try and
>>recover
>>>with sub-standard candidates just to lower unemployment rates.
>>>
>>>All I would point out is that the currently unemployed surplus of workers
>>>that are certainly available may either be: A) too expensive for the industry,
>>>and resistant to the idea of lowering their asking price. Or B) not skilled
>>>enough to fill all of the requirements of companies trying to recover
successfully.
>>>
>>>As I recommended im my final response to Mark a while back. Perhaps focus
>>>on the use of the program, rather than merely the total numbers. Whether
>>>it's 60,000 or 500,000 wont make a bit of difference unless they seriously
>>>look at the methods for screening the companies that are applying for
the
>>>H-1B labor.
>>>
>>>It isn't as simple as saying that there are unemployed IT workers out
there
>>>so we shouldn't allow in H-1Bs. If the economy can't support the companies
>>>that need people, then those companies need ways to get the labor at prices
>>>that they can afford. Now many of those companies will likely try and
"cheat"
>>>by using the H-1B program to bring in labour for "less" than what they
>can
>>>really afford, and it is up to your government to ensure that these companies
>>>get a slap on the wrist for it. But at the same time, Local IT resources
>>>need to understand that a hurting market means that they will need to
absorb
>>>some of the pain themselves, by accepting lower pay until the market recovers.
>>>If a company needs (quantified skills value)X and can afford $Y, then
they
>>>should by all means use local labor that meets X and Y. But if Local labor
>>>cannot, or will not accept $Y, or cannot provide X, then you can't expect
>>>to force the company to pay more, or expect less. that would stunt the
>company,
>>>and lessens the chance of the market recovering.
>>>
>>>"Rich" <R@test.com> wrote:
>>>>
>>>>All,
>>>>
>>>>I sent Wayne Allard a letter about the need to eliminate the H1-B program.
>>>>I specifically mentioned the thousands of unemployed IT workers in Colorado.
>>>>The idiot sent me the following letter. Where in the **** is this guy
>living?
>>>>An alternate reality? Judging from his letter, his brain is fried.
>>>>
>>>>This genius totally ignores the fact that thousand of IT workers are
unemployed
>>>>in Colorado. Yet, he believes "It is important for us as a state and
a
>>nation
>>>>to have access to skilled professionals who will allow us to compete
in
>>>the
>>>>global market and to keep up with the cutting edge of technology." Does
>>>this
>>>>idiot even do any research? What about the thousands of unemployed IT
>workers
>>>>in Colorado? I guess his "corporate" contributors are more important
than
>>>>his constituents.
>>>>
>>>>If you are looking for a good laugh, read on.
>>>>
>>>>Rich
>>>>
>>>>--------------------------------------------------------------------------
>>>>
>>>>Dear Sir:
>>>>
>>>>Thank you for your letter regarding the issue of H1-B visas. I
>>>>appreciate
>>>>hearing your thoughts on this very important issue.
>>>>
>>>>Senator Hatch's S.2045 passed both the Senate and the House of
>>>>Representatives and was signed into law by the President on October 17,
>>>>2000. This law temporarily raised the number of visas the federal
>>>>government allowed annually for highly skilled workers from 115,000
>>>>this
>>>>year to 195,000 annually through FY 2002. These H-1B temporary visas
>
>>>>were
>>>>given for a six-year period to foreigners with special skills,
>>>>principally
>>>>in high tech and health care, that were in short supply domestically.
>>>>
>>>>Colorado has become a leader in the high tech industry and we have been
>>>>faced with a shortage of skilled high tech workers much like the rest
>
>>>>of
>>>>America. It is important for us as a state and a nation to have access
>>>
>>>>to
>>>>skilled professionals who will allow us to compete in the global market
>>>>and to keep up with the cutting edge of technology. In order to do
>>>>this
>>>>we need to train American workers and make available the resources so
>
>>>>that
>>>>they can replace the temporary workers we have today. This law requires
>>>
>>>>a
>>>>modest increase in the fee application fee for H1-B visas which goes
>>>>toward the funding of programs to encourage more young people to study
>>>>mathematics, engineering and computer science and to train more
>>>>Americans
>>>>in these areas.
>>>>
>>>>Again thank you for writing and I look forward to hearing from you in
>
>>>>the
>>>>future.
>>>> Sincerely,
>>>>
>>>>
>>>>
>>>>
>>>> Wayne Allard
>>>> United States Senator
>>>>
>>>>
>>>>
>>>
>>
>