Monday, July 25, 2005

Report: IBM consultants cost Illinois more than state workers

From the AP via our local abc affiliate comes the news of a Report: IBM consultants cost Illinois more than state workers: "Outside computer consultants are costing Illinois as much as three times the rate of state computer employees who have equal skills. "

According to the DCFS head, Bryan Samuels, IBM's people, as consultants, are paid upwards of $176,000 per year, while DCFS's geeks get less than $81,000 annually.

And, whether they are contractors or state employees, there's no guarantee of job quality, is there? So what's the diff?

If the State of IL were to hire actual employees instead of consultants, Samuels estimates that the DCFS could hire up to 20 case workers, but his higher-ups say he's wrong about that. They say that hiring consultants saves them large sums of money. I'm guessing that would be on pension costs and bribes -- er, um... other considerations -- that high-ranking IL State employees have come to expect.

Not that I earn nearly enough in this state to pay taxes, but as a potential taxpayer, I wanna see the math on this one.

2 comments:

AMcGuinn said...

That ratio is about normal: in IT you generally estimate your hourly contract rate as being twice what your per-hour salary is as a full-time employee.

It follows that employers should only hire contractors (either directly or through consultancies like IBM) if they know they only need them for a short time - more than a couple of years and it's cheaper to take on permanent staff.

Recruitment costs are very high in IT - IBM's rate is presumably including those.

leucanthemum b said...

I kinda figured that was the usual ratio.

I guess what I really want to see is the rationale.

I understand that part of the reason for paying more to a part-time consultant is that he is expected to pay for all benefits out of his own pocket, whereas the full-time employee receives pension, health, etc., as part of the package, and it's supposed to somewhat even out, in the long run. It's about luring the best free agents in to do work for you without keeping them in a binding contract that will cost you once they've retired.

But are the IT consultants for IL coming in as bunches of part-timers -- as they should be -- or is the state paying for full-time consultants?

Either way, the question is, what serves the state best? Is this extra cost worth it?