Y2K fees draw flack

The relentless upward march of hourly rates for year 2000 specialists is meeting market resistance in Australia.

Hitachi Data Systems' Y2K services division is paying up to $100 an hour for legacy code programmers and $1200 a day for testers.

That's good news for Cobol programmers who only commanded up to $35 an hour 18 months ago. However the money train is running out of puff, according to Ross McLean, Asia/Pacific director of Hitachi's Y2K division.

"I see it hitting a plateau. I am already at the point of refusing to pay higher rates. I am looking at alternatives and I am not alone in that regard."

One alternative for McLean is to ramp up the level of automation HDS employs in its two Australian Y2K conversion factories, although those levels are already running at 85 per cent. A second option is to make greater use of Asian service providers.

Until now lower Asian labour rates have been offset by the higher management control and quality control costs associated with sending Y2K work offshore. Under the impact of skyrocketing Australian rates, that disadvantage is disappearing.

Y2K is pouring in the door for McLean's unit that has gained 65 clients in little more than a year and expects to double its 70-strong staff in the next six months.

For the full story see ComputerWorld, April 24

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