I call it the Semiotic Diet. It’s simple in concept and even simpler in execution: Rather than prepare and eat actual food, you draw symbolic equivalents (we’ll have an iPad app shortly). Then, while focusing on each food symbol in turn, you envision yourself stuffing your gullet with whatever delicious treats you’ve chosen.
The U.S. workforce has been on a diet for decades. Other than partial coverage for increases in health insurance premiums, non-executive compensation has steadily decreased; other than bubble-created (and bubble-burst deleted) jobs, employment has been flat.
And if this point isn’t clear to you it should be: Most U.S. companies consider employees to be a colossal pain in the tush, and the bigger the company, the more that’s likely to be the case.
Employees, after all, require places to sit, equipment, training, performance feedback, policy management, and oversight. If they think you’ve treated them poorly they can be the source of aggravating lawsuits or complaints to the EEOC or OSHA. They’re the reason executives have to spend excessive time communicating, paying attention to the company culture, and otherwise taking their eyes off the ball of doing business and making money.
It’s a lot more convenient to outsource what you can, sending the rest offshore where workforce rules are simpler, employee protections are limited or non-existent, and in any event you only have to deal with one person — the head of the offshore division, who is now responsible for dealing with all those pesky employees.
Add to that the dominance of the financial sector as our economy’s driving force and we’re left with an uncomfortable question:
What is the future of work in the United States?
Opinion: Unless the government institutes some sort of strong industrial policy that creates strong incentives for creating stable, well-compensated jobs … unlikely in today’s political climate … the future of work, both inside and outside IT, is going to be a steady shift from employment to contract staffing.
Contractors are, after all, much more convenient. Need someone to do a job? Call a staffing agency, give it the specs, and get who you need, for exactly as long as you need them. When you’re finished with them there’s no messy termination or layoff procedures to attend to, no risk of legal action, no sniffling farewell parties, no announcement that thus-and-such has left the company to pursue other interests.
Nope — it’s an arm’s-length contractual relationship between mercenary and paymaster. No muss, no fuss.
This is, of course, a spectacularly bad idea, but since most of the logic favoring employing people instead isn’t financial, the business case is difficult to make.
If you’re on the deciding-whether-to-follow-the-trend side of the transaction, here are some reasons employees can be more valuable to you than contractors, and on-shore employees more valuable than their off-shore brethren:
Incentive: Employees do better when their work gets done faster. Contractors do better when their work takes longer.
Innovation: When employees spot ways your business can operate more effectively, they want to let you know about their ideas. When contractors spot ways your business can operate more effectively, they’ll expect you to pay them for their insights.
Trust: The single biggest determinant of process efficiency is trust among the participants. Without it, processes break down into unnecessary re-work, arguments over quality, and recriminations. Employees have the time, opportunity and reason to build relationships with each other. Contractors will be gone soon, replaced by other contractors, so employees have less reason to make the time or take the opportunity.
Institutional knowledge: Real organizations (as opposed to textbook ones) are complex networks of interpersonal relationships. When you need to get something done, understanding these networks is the difference between success and frustration. Over time, employees learn them and become adept at navigating them. For contractors, there is no “over time.”
Culture: Good employees fit into and reinforce the company culture. The rest generally don’t survive. It’s one reason among many that the ability to hire and retain strong employees is the most important skill business leaders must develop. Contractors rotate in and out of the organization more quickly, so at any given time more of them will be poor cultural fits than an equivalent group of employees.
This assumes, of course, that you provide the employees with strong leadership and competent management.
It is, admittedly, a too-often unwarranted assumption. Which brings up this question:
If the problem with having employees is poor leadership and incompetent management, which is the better solution: Hiring fewer employees, or better managers?
Bob Lewis is a senior management and IT consultant, focusing on IT and business organizational effectiveness, strategy-to-action planning, and business/IT integration. And yes, of course, he is Digital. He can also be found on his blog, Keep the Joint Running.