The above post which he refers to "Hp something..something....by hiring contractors".....ahhhhh."
This practise is known as "Bodyshopping". It is used mainly by "consulting firms" .......and BPO co. residing in Sg. It was rampantly abused in USA and many parts of UK.
To elaborate for further understanding, the "Consulting firms" which many people believe or thought to sell consumer products such as laptops and servers are actually in the business of BPO via hiring through the top 5 Ah neh contractors.
How to make up for the Singapore to FT ratio ? hire the HR level with more of them, where their duties are to go to embassies of various countries to apply BULK EP/PR processing. that's another story. But i'll go on
These embassies do not like the top 5 ah neh for bulk EP processing, first, there's more work and bkgrnd checks and secondly, they are wry of such abuse.
For more details on what Bulk EP rocessing mean you can refer to a case where a MOM high level ranking employee was jailed for accepting such bribes to fast track processing of such duties.
http://www.mom.gov.sg/newsroom/Pages/PressReleasesDetail.aspx?listid=392 (Full details below )
http://en.wikipedia.org/wiki/Body_shopping
Body shopping
From Wikipedia, the free encyclopedia
This article has been nominated to be checked for its neutrality. Discussion of this nomination can be found on the talk page. (April 2008)
Body shopping is the practice of consultancy firms recruiting information technology workers in order to contract their services out on short-term bases. Regarded as legitimate consultancy by both the companies that practice it and by the people employed, body shopping is disparaged by those IT services companies in India that assert that they provide real services (such as software development) rather than the "sham" of merely farming out professionals to overseas companies.[1]
Contents
[hide] 1 History and origin
2 Revenue model
3 Indian body shopping networks
4 See also
5 References
6 Further reading
[edit] History and origin
This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2008)
Body shopping in IT originated during 1996-1999 where there was huge demand for people with Mainframe, COBOL and related technology skills to prevent systems being affected by the Y2K bug.
Most specialist Y2K consulting companies operated in US, Europe, Middle East, Japan & Australia outsourced their manpower requirements to technology companies operating in India, which are now global forerunners in offshore and outsourcing.
During 1996-97, these companies responded to the heavy demand by recruiting and training local graduates in India specifically for Y2K. Their consultants either worked onshore or offshore at high utilization rate generating huge profit margins. The high profit margin during this period resulted in fast growth and sufficient assets to expand operations to other IT related business segments post-Y2K. Even in the modern IT age of offshoring and outsourcing, it is widely accepted that Indian IT companies growth strategy still continue to focus on similar lines, which is, developing skills for a changing marketplace and catering skills demand of their global customers by Body shopping.[2]
[edit] Revenue model
Body shopping companies mainly recruit offshore and provide training to their employees using their offshore facilities.
Employment costs (both Fixed Term and Permanent) are generally offset by the highly profitable billing ratio, especially for onsite assignments abroad. Most companies boast a utilization rate of 80% which also takes into account of the potential long 'bench period', where an employee is not billable or when his skills are not in demand.
[edit] Indian body shopping networks
In India, traditional body shopping has evolved in its due course post-Y2K era to create strong networking and collaboration between competing Indian body shops working abroad. All body shops claim to have the ability to place Indian workers in almost any country using the resources and services of other Indian bodyshops operating in the target country.[3]
In one documented case study deemed as a typical example, a body shop in Hyderabad was able to win a 360 man-month deal with a U.S. company that urgently needed 40 IT workers with a very "specific" skill on a 9-month project. Although the Indian body shop company could easily find lower paid workers in India for the job, the H-1B visa process would take too long to bring them into the United States to work. Thus, the Indian firm forwarded a request to its associate network to locate 40 Indian temporary workers in the United States. A search was undertaken by the network for available Indian H-1B workers, resulting in a list of recently laid-off Indian H-1B workers in the USA. Sponsorship for the laid-off Indian H-1B workers was reassigned to the needing bodyshop and a portion of the newly employed workers salary was given as commission to the peer body shop that help locate the laid off H-1B workers in their associated peer network of Indian body shops. This process of quickly recruiting available H-1B holders is referred to as "body shopping".[3]
[edit] See also
L-1 Visa
Sweatshop
[edit] References
1.^ Aneesh Aneesh (2006). "Body Shopping". Virtual Migration. Duke University Press. pp. 39–40. ISBN 0822336693.
2.^ Brenda S. Yeoh and Katie Willis, editors, 'State/Nation/Transnation: Perspectives on Transnationalism in the Asia-Pacific', Routledge, 2004, ISBN 9780415302791, page 166-167
3.^ a b Xiang Biao (2004). "Indian information technology professionals' world system: the nation and the transnation in individuals' migration strategies". In Brenda S. Yeoh and Katie Willis. State/Nation/Transnation: Perspectives on Transnationalism in the Asia-Pacific. Routledge. pp. 166–167. ISBN 9780415302791.
[edit] Further reading
R. Heeks (1996). India's Software Industry: State Policy, Liberalisation and Industrial Development. New Delhi: Sage Publications.
Xiang Biao (2006). Global "body Shopping": An Indian Labor System in the Information Technology Industry. Princeton University Press. ISBN 0691118523.
Nagesh Kumar (2005). "Moving Away from Body-Shopping". In Ashwani Saith and M. Vijayabaskar. ICTS and Indian Economic Development. SAGE. pp. 96. ISBN 0761933395.
Company Director Faces 60 Charges for Phantom Worker Scam and Kickback Offences
11 October 2011
1.73-year-old Lim Ong Long @ Kenneth Lim (林皇良), Director of Highsan Lim Enterprise Pte Ltd (海山林), pleaded guilty in court today for falsely declaring in Work Permit applications that Central Provident Fund (CPF) contributions were paid to Singaporeans who were supposedly employed by him, when they were not. As a result of his actions, his foreign worker entitlement was fraudulently inflated. Of the 30 charges against him, 10 were proceeded on and the remaining 20 were taken into consideration.
2.In addition, Kenneth Lim also pleaded guilty to recovering employment-related costs from the foreign workers that he employed. Similarly, of the 30 charges against him, 10 were proceeded on and the remaining 20 were taken into consideration.
Facts of the Case
3.Investigations into Highsan Lim Enterprise Pte Ltd revealed that Kenneth Lim had falsely declared the number of locals employed so as to inflate the company’s foreign worker entitlement. In addition, Kenneth Lim had received $6,000 each from 30 foreign workers in order to recover their employment costs.
4.The case will be heard again in court on 21 October 2011, 9.30am at Court 36 for sentencing.
Another director convicted in July for kickback offence
5.On 19 July this year, Mok Siew Meng, the director of Kang Meng Marine Services Pte Ltd, was fined $37,500 for receiving kickbacks.
6.Mr Aw Kum Cheong (区锦章), Divisional Director, Foreign Manpower Management Division, MOM (人力部外劳管理署署长), said, "We will continue to identify such companies who infringe on our laws and put a stop to their fraudulent activities that distort the labour market and exploitative practices that target vulnerable workers. Our foreign worker policies are designed to assist companies to meet their genuine need for foreign workers. The use of “phantom workers” is dishonest and gives the culprits an unfair advantage over employers that play by the rules. Foreign workers should also not be made to pay kickbacks to employers. We will debar such employers from employing foreign workers. Anyone with information on such practices can provide confidential tip-offs to us via e-mail at
[email protected] or call us at 6438 5122.”
7.Under the Employment of Foreign Manpower Act, offenders who make false statements in work pass applications are liable to a fine not exceeding $15,000 or to imprisonment for a term not exceeding 12 months or to both. Receiving kickbacks is a breach of the Work Pass Conditions, and is punishable with a fine of up to $5,000, or a jail term of up to six months, or both. Those convicted will also be barred from employing foreign workers in future.
8.In 2010, 11 individuals were convicted for kickback offences and from January to July 2011, four individuals and one company were convicted for similar offences.
9.In 2010, 38 individuals and three companies were convicted for phantom worker scams and from January to July 2011, 25 individuals and one company were convicted for similar offences.
