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Saturday, 8 October 2016

“The Small Club” and the macro effects of micro decisions.

One of my all-time favorite comic book artists AND writers is the Dutch legend Marten Toonder, writer of the Tom Puss and Olly B. Bumble comic series.

Next to a truly genius cartoonist with outstanding and timeless ink drawings in black and white, he was a raconteur par excellence, who painted a whole fantasy world, crowded with animals behaving like utterly human people. 
Each of these different animals had its own flaws and weaknesses and sometimes even wickedness and arrogance to offer, but also smartness, sheer kindness and love. 

The ‘winner’ in Toonder's stories was not the brightest and smartest figure (i.e. Tom Puss), but the very humane, slightly dumb and clueless, but nevertheless very goodhearted and generous Olly B. Bumble; he always stumbled upon the solution with his ‘young friend’ Puss, who on his behalf was “the puss with the plan”, as well as the “inspirator of last resort”.

In a few simple words: Bumble was the archetypical anti-hero of the story, turning hero after all, but he never realized it or boasted about it. To the contrary: he started the next story with the same ignorance, dumbness and goodheartedness as the last one, without learning anything anywhere.

Marten Toonder invented new Dutch words and expressions that became staples in the language, like ‘denkraam’ (i.e. 'window of thought'), ‘kommer en kwel’ (akin to ‘doom and gloom’), ‘Tom Poes, verzin een list’ (i.e. ‘Tom Puss, pull a trick‘ ) and many, many others. Many Dutch people use these words and expressions without knowing were they originally came from.

One of the inventions of Toonder in his books was ‘The Small Club' of Rommeldam (i.e. “Rubbleton” town), a gentlemen’s club consisting of notables from this comic city in which most Tom Puss adventures take place.

The mayor of Rommeldam, a local marquis, a few ruthless industrials and other notables of the city were members of this small gentlemen’s club of wealthy and elitist, but also clueless, arrogant and ignorant people. Oh, and of course Olly B. Bumble, who is hardly accepted and respected by his peers as a member of The Small Club, as they secretly despise him and envy him for his almost unlimited amount of money, coming from an inheritage.

A meeting of a few members of The Small Club in Olly B. Bumble's castle residence
Picture created by Marten Toonder and printed courtesy of: the Marten Toonder estate
No copyright infringement intended
Click to enlarge
I had to think strongly about ‘The Small Club’ of Rommeldam, when I read an article in an older Volkskrant newspaper from a few weeks ago, starting with this already “classic” sentence:

In a beautiful castle in Voorschoten, they talked about the ‘wealth gap’ in The Netherlands: CEO’s and other representatives of large Dutch companies, who were invited by ING Bank and Allen & Overy [i.e. a sollicitor’s office - EL]. They exchanged thoughts about the emergence of populism, the coming elections in The Netherlands (Geert Wilders) as well as The United States (Donald Trump), and the worrisome consequences of these circumstances for global free trade.

In spite of being only one paragraph in length, this snippet is a tell-tale signal about the state of “Corporate The Netherlands”. A few captains of industry and sollicitors, together strongly akin to Marten Toonder’s “Small Club”, sit together in a castle(!) to discuss the situation with respect to populism and populist politicians. The captains of industry and lawyers all fear that the populist politicians want to make an end to free and unlimited global trade without borders and boundaries: the holy grail of the early 21st Century.

To be frank: the article was very informative and there were some sound conclusions in it, about the growing wealth gap between the well and the not-so-well educated people in The Netherlands.

Duivenvoorde Castle in Voorschoten
Picture courtesy of:
Click to enlarge
Nevertheless, for me it was almost impossible to take those captains of industry and their worries serious anymore. This was due to this castle [probably Duivenvoorde Castle; see the picture above - EL] of which the hosts undoubtedly serve excellent food from leading Michelin cooks to their VIP guests. 

A place where probably loads of security people were present and where there was a near-zero chance of unwanted encounters with normal, common people, to whom the decisions of these captains of industry could have far-stretching and even devastating consequences.

The result was that – while reading the remainder of the article – I always envisioned the Small Club of Rommeldam’s notables, talking about ‘the plebiscite of their city’ from a distance, while wining and dining in their ivory towers.

I slightly forgot about this article until last Monday, when CEO Ralph Hamers of ING bank – the co-host of this very castle meeting – announced that this system bank would fire 7000 FTE’s (i.e. full time equivalents) globally. This meant that 7000 full-time bank employees or many more part-time jobs would vanish in the coming few years. Of these 7000 full-time jobs, 2300 FTE would be cut in The Netherlands and no less than 3500 in Belgium.

Slightly to my surprise, the response from the workers in the Dutch banking industry and from the involved Dutch trade unions was not much more than lukewarm (“Yes, we know... The digitization and robotization of the banking industry and the emergence of fintech are forcing the banks to take these painful measures. Consequently, this was an inevitable step that we saw coming blah blah blah...”). This lackluster reaction was probably a result of these bank employees and union workers already being shellshocked from the nearly endless series of reorganizations that went through the Dutch banking industry in the past decade and the many more reorganizations that seem to be underway within the next decade. 

However, the people in Belgium were in a state of shock and nearly ready to organize a large scale uprising against this “feudal Dutch bank”.

Please understand me properly: I have worked for many years as a tester at ICT departments in the financial industry, where most of the innovations and new developments are taking place. In those years I saw the banks morph from being companies with numerous ‘offline’, brick-and-mortar bank offices with shedloads of personnel, into nearly ‘online only’, digitized and robotized companies with only a 'skeleton crew' to keep things running and dozens of information architects and engineers to further robotize the core banking activities. 

During this time banks became companies where the battle for the highest margin became nearly synonymous to the battle for the lowest expenses, as the interest margin was not sufficient anymore to do the job alone.

Banking has remained an indispensable industry for The Netherlands and the whole world, as a matter of fact, but one in which there still is massive anger and envy among customers and the population as a whole about the ‘2008 mess-up’ that caused this global financial crisis. And an industry in which the role of the national and supranational supervisors (“Basel”) has intensified from being laid-back and even ignorant ‘supervisors from a distance’ into bloodhound-like, hands-on inspectors, who are guarding the strongly elevated thresholds for solvency, liquidity and risk-appreciation with their lives. 

These supervisors don't scare away anymore from taking the harshest of measures upon 'banks under jeopardy' that violate the Basel rules, when the situation requires that [hence: Deutsche Bank - EL]. This means that the banks have to walk on eggs these days and yet must do their utmost in order to meet the capital requirements of their shareholders and providers of funding.

And I, as no other, also understand the extent to which emerging fintech companies are threatening the classic banks in The Netherlands: fintech companies which don’t carry the financial and ICT legacy of over a century of banking activities and that can do ‘cherry-picking’ with respect to their customers, services and products.

It is so much easier to start a new online bank that only aims at the profitable customers, services and products of banking, than to strip down a classic, broad service range, brick-and-mortar bank and change it from being an indolent oil tanker into an agile, modern company with a well-balanced payment, lending and financial services package.

Therefore I am the first to understand that the regular banks need to be ‘lean and mean’ to win the battle with these new fintech companies, which have nearly unlimited resources (in some cases) and don’t carry the burden of a long past and an excessively large organization, with thousands of very expensive workers. And unfortunately enough, this means that many of the steady workers – especially the ones working in the old bank offices all over the country or with jobs that are easy to robotize – will inevitably lose their jobs and enter into a very uncertain future: a one that I know all too well. Therefore I feel very sorry for everyone of them.

Nevertheless, in spite of me understanding many of these changes within the banking industry, I hope that the bank executives will finally start to get rid of their own ivory towers; the brick-and-mortar ones, as well as the mental ones, clouding their vision and empathy towards their workers.

In order to really understand their often very loyal and understanding employees and the relatively tough times that these are going through, these executives have to abolish:

  • their ‘castle-meetings’, like the one mentioned in the Volkskrant article;
  • their occasional habit to complain about the limited height of their remuneration and the lack of variable bonuses in it, only days before they put thousands of workers on the street;
  • their separate, guarded office entrances at which they never meet their common employees unvoluntarily;
  • their normal behaviour in which they hardly speak and interact with common workers outside their inner circle, due to their mental and physical blockades against doing so;
  • their video conferences in which they can broadcast their speeches to their personnel, without being confronted in real life with the (angry) reactions to it;
  • their announcements of large job cuts made to large investors and share- and stakeholders first, instead of the people to which these announcements are applying.
And last, but not least, they have to deeply understand that all of these 7000+ workers in The Netherlands, Belgium and outside now see their sheer future at stake, without knowing what they should do in the coming months. And that is not something to think lightly upon!

If they fail to do so, these executives will be little more than the arrogant and ignorant notables of ‘Rommeldam”, which are so exquisitely described in the unforgettable books of Marten Toonder. And their workers will be little more than Rommeldam’s plebiscite, who suffer under the quirks of their ignorant bosses.

Sunday, 2 October 2016

The end of a freelancer... In spite of the positive sides of having the ultimate freedom of choice in my profession and being responsible for my own future, I have recently chosen for a future as common employee. I haven’t succeeded like I hoped, but learnt a few tough, but valuable lessons.

And now, the end is near;
And so I face the final curtain.

As my steady readers know, it is not my habit to write about myself. I consider my personal life not to be too interesting for my readers and try to look more at the world outside and the economic developments in it instead. Yet, I want to do so today, hoping that my story might help someone with taking a decision on becoming a freelancer in The Netherlands or not. 

I have been a freelancer since the start of 2015, originally for a number of reasons:
  • My former employer in the ICT industry encountered so much economic hardship during the period 2008 – 2014 that the company hardly survived the crisis. In the process the company lost some valuable customer accounts and dismissed/lost half of their (supporting) personnel base. At the time that I left it seemed that the company had no future ahead, even though the company managed to survive in hindsight.

    At that time I wanted to make a fresh start after this hard period and wanted to be part of a growing and successful company again;
  • My brother also was a participant in the new corporation of independent freelancers that I joined and I looked very much forward to rejoining forces with him in what is both his and my profession: senior software tester and quality consultant;
  • I wanted to explore new roads in my profession by being responsible for finding my own assignments and trying to do things differently than when I had a fixed contract with an employer;
  • And last, but not least, I hoped to find a more prosperous future for me and my family.

However, from Monday, 3 October on, 20-odd months after I started my period as a freelance professional, I return to being a common worker under a fixed labour contract. To some ears this might sound like a step back, but I’m glad about it after all.

I’m still not quit sure, whether I just had a stroke of bad luck in my (choice of) assignments at large employers in the financial and commercial services industry or that I ‘had lost my mojo’ as a freelance testing professional. Anyway, the assignments that I had lasted shorter than I anticipated in advance, even though I believed to have done a pretty good job at all of them, while the periods in between those assignments lasted longer and longer.

Even though the market for software testing professionals had improved quite dramatically during 2015 and 2016, it was still very difficult for me to acquire a new assignment. Especially as my rather functional than technical testing knowledge and my only moderate knowledge of testing automation hampered me in finding a new assignment.

Negative ‘cherry on the cake’ was the introduction of the new Dutch law DBA – Deregulering Beoordeling Arbeidsrelaties (i.e. Deregulation of the Review of Labour relations) by the Dutch Ministry of Social Affairs. 

In order to help genuine freelancers and independent professionals to earn an honest income, this law was supposed to filter out the fake freelancers: people who had been forced out of a steady job against their will by their former employers as well as future principals, into an uncertain existence as freelancer with a very limited job security and a rather low hourly fee (or even piece-wages), without further social premiums and insurances being paid for.

This DBA law also had to protect people from the low wage countries inside and outside Europe, who had been treated as ‘working cattle’ sometimes by relentless principals, for which they had to work under very poor labour circumstances and with extremely poor payments, without having the same rights and privileges that Dutch workers enjoy.

The real freelancers – really independent workers, who did so out of their own free will and choice – would remain unharmedand the blatant abuse of cheap labour from inside and outside The Netherlands would be abolished after this law came in effect. At least, that was the idea...

It turned out a little different...

The DBA law was been introduced in the first half of 2016, with a pilot period of roughly one year in which this law would not be enforced by the tax authorities (i.e. during this pilot period only warnings would be administered in case of violations and no penalties). 

Already directly after the introduction, it became clear that there was a radically different point of view between the Mark Rutte Cabinet in The Hague, that introduced the law, and the Dutch Internal Revenue Service which had to enforce this law eventually.

With this new law, a freelance professional (i.e. ZZP’er in Dutch) has to enter into a model contract with his temporary employer, in which both parties agree that the freelancer will not work into a normal, subordinate employer-employee relation.

To the eyes of the Dutch Internal Revenue Service, this genuine freelance working relation means that:
  • The freelancer is not supposed to have fixed working hours, but should be able to choose his working hours himself;
  • The freelancer is not supposed to have fixed, thoroughly described work packages, in which he does not have the freedom to choose his own results, working methods and solutions;
    • Instead the freelancer should be totally responsible for the working methods and the end result of his efforts himself;
  • The freelancer is not supposed to be in a subordinate relation with managers working at his principal, but he should have nearly total freedom in how to do his job.

When not all these conditions are met in a freelance model contract, the Dutch IRS considers the freelance working relation to be a ‘common labour relation in disguise’, which is due for tax and social security payments by the principal (aka the temporary employer). The IRS has to approve such model contracts in advance before they might be used by the freelance professionals in their working relation with their principal.

And perhaps the worst problem of this law – that exists until this very day –  is that a freelancer, even with an approved(!) model contract with his principal in hand, which states that he IS a freelancer and does not have any kind of subordinate relation with his temporary employer, can have his contract being disapproved upon by the IRS after all; for instance after an inspection(?) on the workfloor. This will turn him into a normal employee reciprocally and would leave the principal with a huge bill for overdue social security payments.

This was the killer risk for many current and future principals, as large employers with f.i. more than 1000 freelancers could encounter enormous financial risks for millions of Euros in reciprocal payments of taxes and social security premiums. For a substantial number of companies this risk was actually so big, that they totally abandoned the usage of freelance professionals as temporary workers in their company.

And let's be perfectly clear about it: for most freelance consultants in the ICT industry, as well as in the financial and legal, commercial services industry – probably more than quarter of a million consultants in The Netherlands alone – these freelancing conditions as maintained by the Dutch IRS are in fact a mirage!

There is hardly any freelance consultant working for a common principal:
  • who can decide about his own working hours, without listening to the desires of his principal and/or colleagues;
  • who can decide alone about what he is going to do with respect to his job and how he is going to do it;
  • who does have total freedom to do as he pleases within his working environment;
  • who does not have orders and instructions to follow from some manager at his principal.

This simply does not happen for all these hundreds of thousands of consultants. All these freelancers, as well as their principals know this fact by heart and the Dutch IRS knows that they know.

And in spite of all the soothing and comforting words of State Secretary Eric Wiebes of Tax Affairs, who stated repeatedly that ‘things are not as black as they seem with respect to this law and people should be not afraid and simply go to work and make money’, many companies don’t dare to run the gauntlet regarding freelancers anymore.

Perhaps the worst thing is that nobody in the Mark Rutte Cabinet is actually able to let the IRS choose a less rigid stance, with respect to these freelance conditions and model contracts. The IRS rests with its own point of view and does not give a rat’s behind about all statements coming from officials in The Hague.

Currently, the only way out of this political stalemate, in my humble opion, is that the IRS starts to officially enforce this DBA law, by assessing and – when deemed necessary – penalizing ‘offenders’ of it. 

If then one or more of these offenders start a legal case against the IRS or the government, jurisprudence will emerge that creates clarity for the future about the boundaries and thresholds of the DBA law. However, as things are today, this process will not be started before at least mid-2017. That is much too late for many freelance professionals, who are in an equal situation as I was.

Whatever the reasons have been, I didn’t manage to get new assignments at the times that I needed them badly. Nor did I manage to stay long enough in one assignment to create some necessary cash reserves for the future. And every time when I resided at home for much longer than hoped, without an assignment and without having an outlook towards one, I felt my own doubts increase.

Also I felt the mounting pressure from myself and my family to accept any job from any company where they would hire me for a decent fee. It was an unsustainable situation eventually.

A few months ago, I decided to look for a steady employer again, instead of being a freelancer. And even more special, I decided to give up my life as testing consultant and continue as a testing employee for one, non-ICT employer.
Luckily, I managed to get such a job, which pleases me very much and now I am starting a new phase of my life and working career.

The lessons that I learned during the last twenty months are:
  • The security and ease of mind that a steady job offers are hard to beat by the extra money (in theory) that a career as freelancer promises to yield;
  • Government policies with respect to labour and social affairs are often elaborated so poorly and have such grave, unintended consequences that they can destroy more jobs than they protect, even if they were created with the best intentions;
  • A new assignment can stay out much longer than a freelancer can ignore the fact that he doesn’t earn money during such a jobless period;
  • In the ICT industry you can become a dinosaur in the blink of an eye, without even noticing it, when the world around you changed totally and you failed to notice it and act upon this;
  • Sometimes it is harder to get a temporary assignment as a "one-trick-pony" freelancer than a steady job as a versatile, older worker.
  • If your family feels bad about you being a freelancer, you better quit it, as your family is the most important thing in your life

Will I ever become a freelancer again?! Perhaps... but now is not the right time for that. At least, not for me!

Wednesday, 28 September 2016

Is there really a shortage in available, correctly qualified personnel for ICT companies? Or is the industry suffering from the consequences of outsourcing, as well as maintaining unrealistic demands with respect to their new employees?!

For me as a (formerly) freelancing worker in the ICT industry, there was a quite interesting news message in Het Financieele Dagblad this week.

From research carried out by the Dutch Central Bureau of Statistics it was disclosed that there allegedly is a shortage of roughly 17% in qualified ICT personnel among large employers and principals with an interest in ICT. 

These are companies and institutions like ICT employers, central and local governments and governmental organizations, large banks and insurance companies and other large commercial parties, with an vital ICT component in their line of business.

The following snippets were printed in Het Financieele Dagblad:

Entrepreneurs are more and more hampered by the mounting shortage in qualified personnel. In the ICT industry this shortage amounts to 17%, according to the Dutch Central Bureau of Statistics.

Roughly 7% of the entrepreneurs states that the shortage in qualified personnel offers difficulties in the daily conduct of business. This number was not that high since 2009. In the commercial business industry 11% of the employers sees this shortage as an obstacle for further growth, while in the Transport and Storage industry 7% of the companies experience such a shortage.

When this research is true and objective indeed, it would mean that it is not possible to fill in roughly one in five ICT jobs, due to a lack of qualified personnel. That is an alarming number indeed, but is it true?! 

If have my doubts personally, based upon my own experiences of these last months and (even) years, since the crisis started in 2008.

As many of my readers know, my official profession is that of a senior software testing professional with 18 years of experience in this industry. Especially the last two years I have been in the situation too often, that I was looking for a new assignment as software tester at the government, the financial industry or other commercial parties.

When I compare the current situation with the situation in 1999 when there REALLY was a shortage in the ICT industry, under influence of the dot-com bubble, these situations are almost diametrically opposite.

In 1999 I received three salary increases in one year myself. Everybody and their sister, who were able to write two flawless lines of computer code in a row, were hired for a future in the ICT industry. Lab assistents, biologists, mathematicians, physicians, teachers and many other professions were lured into a job as programmer, software tester or project manager, with skyhigh salaries, fancy leasecars and other perks, as demand required that. That was a shortage!

Looking at things now, it is a whole different ball-game.

Countless ICT jobs have been outsourced to Eastern Europe, India and other low-wage countries, where whole ‘software factories’ have emerged that mass-produce billions of lines of code for especially large customers of ICT services in Europe and the United States. At the same time the Dutch market has been ‘flooded’ with numerous knowledge workers from these same countries, who chose for a more prosperous future in The Netherlands.

Salaries and fees in the ICT industry, especially for the more common programming, analysis and testing jobs and commonly used tools, are still under fierce downward pressure in a market in which ‘demand’ still rules, like it has already done during the last decade.

I have written dozens of motivations for testing jobs during these last two years and I’ve noticed that large employers and principals are still extremely picky with regard to their (temporary) personnel.

Companies demand very experienced workers with a long list of tool-driven and general (personal) skills and a genuine 'passion for their job', but refuse to pay ‘top dollar’ for them, unless they possess skills that are really extremely rare in the business.

Instead of settling for a (temporary) worker that can meet roughly 80% - 90% of the demands in the advert, knowing that he/she will be able to fill in the knowledge void very quickly in most cases, many large employers and principals still only want to settle for the ‘perfect 10’, when it comes to their temporary personnel and fixed employees.

Their adverts show at least 10 to 15 bullets of specifically demanded experience (“3 to 5 years experience in line of business abc and with programming tool xyz”), personal skills and expert knowledge of very specific tools, often put down as 'knock out criteria'.

If you as an ICT professional cannot meet all these demands or at least the vast majority of those (i.e. the ‘knock out’ criteria), there is a considerable chance that you will not be invited for a job conversation at all and your resumee will untimely end up in the dustbin. And that in spite of the fact that you are probably more than capable to execute the job at hand. 

No experience within the government? Then were sorry! No experience with the Protractor testing tool?! No, than we cannot use your knowledge and experience!” And indeed: these ‘perfect 10’ guys and girls are still very hard to find, just like they will be in any situation.

A large bank in The Netherlands requires their ICT professionals to bring their own working devices, like a notebook/laptop, storage devices, iPad and telephone (i.e. BYOD aka Bring Your Own Device) and work the first two weeks for free (i.e. without payment) as well. The latter is sold to their 'would be' consultants as 'an introduction period in which personnel is not productive yet’. Refuse this and your application probably does not stand a chance in the process!

Other large companies simply refuse to accept your resumee for a new job or assignment, when you have failed earlier during a  job application procedure for a different job. 

Does that sound like an alarming 17% shortage in ICT workers?! To me, it doesn’t.

And look at things from a different point of view. All the large banks and probably many insurance companies too have dismissed hundreds of their ICT workers, who were not considered ‘fit for the agile way of working’ anymore. Those were people who have worked to the full satisfaction of their employers for years in a row, but suddenly were not good enough anymore.

And for instance ‘Big Blue’ IBM has fired hundreds of workers during a recent reorganization, a.o. for reasons of losing a large contract at KPN, the Dutch telecom company. The following snippets come from Computable.

After counseling with the central works council, IBM has decided to scratch 334 jobs within the company. This reorganization had been announced already in March 2016 and now the definitive number of workers has been disclosed.

IBM carries out a large European job cutting operation, in which much work is transfered to India. There is a considerable chance that – after the 334 jobs that have been erased in the meantime – more people will lose their job. IBM would like to have carried out this operation before the end of this year.

To these ears all this does not sound like a real shortage in the number of ICT workers, like signaled by the Dutch Central Bureau of Statistics, in spite of the increasing number of assignments. 

These IBM workers alone and also the bank’s and insurance companies’ ICT employees are in most cases perfectly capable people of which still many are currently looking for a new job or assignment. Companies and the government just have to give them a chance!

It just sounds like the 17% of ICT jobs that could not be filled in, according to the CBS, are either extremely specialized jobs – which will always be hard to fill in, as such people are always scarce and in demand – or jobs that have been administered by extremely picky companies, looking for their ‘perfect 10’ consultants and employees in vain.

To be honest, I don’t expect the situation of 1999 to return soon to The Netherlands. This in the light of the massive influx of foreign knowledge workers of the last fifteen years or the equally massive outsourcing of Dutch ICT jobs and work backlogs to India and Eastern Europe. 

The Dot Com bubble was really a crazy, ‘once in a lifetime’ situation, but the current situation is definitely not!

I just expect that the companies currently looking for ICT workers will become somewhat less picky in the coming months and years and become more willing to give ICT workers, who score a 7 or 8 out of 10, a chance, instead of waiting for "mr. or mrs. Perfect". 

Let us be honest: most of those ‘7 or 8’ workers are more than qualified and willing to do a wonderful job at their new employer or principal and therefore I don’t see the current ‘shortage’ as a problem. 

It is just a signal that companies and the government have to step over their initial reservations and settle for workers that seem a ‘teeny weeny’ bit less qualified, but are not in reality. And that is actually a great development, to be honest...