Lies, Damned Lies, and Management Consulting

Some interesting facts on Accenture, the company tasked with evaluating’s status, from the New York Post:

Accenture saves money by underpaying foreign guest workers they import — typically 25 percent less for their imported employees than the prevailing wage for a similar US citizen worker.

Ron Hira, an associate professor of public policy at the Rochester Institute of Technology, analyzed Accenture’s use of the H-1B program. In 2005, the company had 12,684 H-1B foreign guest workers earning an average of $53,042 per year. That’s far less than the median $80,000 salary the same job responsibilities and skills required would fetch for an American worker. Accenture is so bad, they paid a foreign guest worker $25,113 per year — for the title of “chief programmer.” Typically chief programmers make six figures in the United States.

It appears undercutting wages with H-1B visas is part of Accenture’s business model. Hira found that, in 2012, the median salary paid for Accenture’s new H-1B workers was $64,700, while Amazon paid their equivalent H-1B workers a median salary of $95,000. Google, who also uses comparable technical skills sets to Accenture and Amazon, paid a median salary of $110,000 to their new H-1B visa hires.

Accenture also avoids American taxes. The company is headquartered in Chicago, but it’s incorporated in noted tax haven Ireland.

It’s tremendously easy to be profitable when you’re a scofflaw. And, as this case illustrates, scofflaws are rewarded with lucrative government contracts. Sounds like perverse incentives to me but it’s completely consistent with the Tim Geithner model of technocratic governance.

In defense of Accenture, née Andersen Consulting, there is probably no company better suited to identify the reasons that the project went wrong and my understanding is that’s the task they’ve been assigned.

Many years ago I took a class from Andersen Consulting and was certified in their project management methodology. After a couple of days of mind-numbingly boring classes, I asked a question of the instructor to the effect that I was getting the impression that their project management methodology was intended to assist managers in assisting managers in identifying where projects had gone wrong rather than giving them tools for seeing to it that projects go right. The instructor agreed enthusiastically. Perhaps things have changed over the years but my experience is that corporate cultures change very slowly, even more slowly when the companies are successful as Accenture has been.

I would also suggest that there is no company better prepared than Accenture to give the client the answer they wanted rather than the answer that they needed. The client here is the federal government and if that’s the case, their results could give us a handy window into what the Obama Administration wants to hear about

6 comments… add one
  • ... Link

    And, as this case illustrates, scofflaws are rewarded with lucrative government contracts.

    Any point in wondering how much money Accenture funneled to the Obama campaign?

    I’ll also note that the median salary numbers for Amazon and Google aren’t meaningful when compared to Accenture. What would be meaningful would be to know what the median salaries were for Amazon and Google H1-Bs compared to a similar cohort at those companies.

    Finally, what’s the likelihood that Accenture is advising management at other companies to abuse the H1-B program in the same manner that Accenture does?

  • ... Link

    Oh, and does any company with the wherewithal to do so NOT attempt to avoid American taxes?

  • TastyBits Link

    Out of the millions of unemployed, Accenture could not find 12,684 qualified Americans to do the work?

    The liberals bash “free market capitalism” while doing the bidding of big business and Wall Street. The conservatives sing the praises of “free market capitalism” while being used by big business and Wall Street.

    I do not know which side is more naive. It is an old tactic. You keep the two sides fighting, and then, you rob them blind. When they notice, each will blame the other, and then, you offer to help each.

  • jan Link

    I continue to be surprised at how government parrots one principle for others. However, it’s own operations reflect a very different application of standards.

    The IRS, for instance, is tenacious that every dime and receipt is accounted for by the average Joe. However, when it comes to their own expenditures, their own receipts… well, they give themselves a pass.

    Social progressives will vehemently rail against runaway over-development, the plight of the poor. However, when they gain power in a community, developer deals soon follow, invading the area like reproducing rabbits. The poor are consequently pushed out by urban renewal and population gentrification, bringing in more revenues for ambitious social engineering projects for these ‘reformers’ to play around with — once again disguised as helping the ‘needy.’

    Security is constantly being foisted on the public as reasons behind the intrusive NSA escalation. Nonetheless, when it comes to seeking ‘security’ for others, on their own HC web site, all bets are off. David Kennedy, a hacking expert, said he was able to easily access in about 4 minutes, with nothing other than a standard browser.

    In the meantime, the Obama Administration calls for ‘paying one’s fair share in taxes,’ income equality in the marketplace, along with creating more jobs for Americans. However, when it comes to their own hiring practices, government projects are farmed to foreign guest workers with underpaid wages, having corporate profits being stashed in places like Ireland to avoid taxes. The same goes for this administration’s wealthy donors, many of whom (i.e. Google, GE) blatantly hide assets overseas to avoid ‘fair’ taxation — an Obama accusation thrown on the rest of us, having no such political/powerful pull.

    One can only wonder why, instead of thundering, such hypocrisy treads so softly in people’s awareness.

  • ... Link

    I do not know which side is more naive.

    If you mean the politicians, the answer is neither. They know who pays for them.

  • jan Link

    All eyes are focused on how the PPACA will effect not only health care but also the economy. However, there are other fiscal concerns hovering off stage, as well.

    One plausible economical weakness, few are discussing, deals with the possibility of the first domino to fall in the next financial crisis being commercial real estate.

    Charles Hugh Smith presents some graphic insights as to how retail sales have been suffering, along with various bell-shaped charts, all heading downward into the future.

    He ends with the following:

    Let’s try a second simple question: what’s holding the retail CRE sector up? Answer: leases that will soon expire or be voided by insolvency, bankruptcy, etc. as retailers close stores and shutter their businesses.

    One last question: who’s holding all the immense debt that’s piled on top of this soon-to-collapse sector? The domino of retail CRE will not fall in isolation; it will topple the domino of debt next to it, and that will topple the lenders who are bankrupted by the implosion of retail-CRE debt. And once that domino falls, it will take what’s left of the nation’s illusory financial stability down with it.

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