11 ms·

The End of Employees

119 points by rotskoff 8y ago

rossdavidh 8y ago
Hypothesis: this is the result of a long period of labor surplus. If, as seems to be the case in some places like Austin, TX where I live, we are now moving into an era of labor scarcity, there will come unexpected problems. Like, if you find that sometimes important functions don't get done on time because there were not enough people to do it because someone quit unexpectedly, but it's not technically your employee so you don't have much leverage in figuring out what the problem is to make sure you don't get caught short-staffed again. The reason to have an employee is to make sure they are available when you need them. If there are always a surplus of people willing to be there, then outsourcing is a way to reduce your costs. But, if that changes, then the downside of "it's not your problem" becomes more apparent; it still is a problem that impacts you, it's just not _your_ problem, so you can't do much about it. Only some parts of the U.S./world are in a labor shortage situation right now, of course. But until recently, just about nowhere was, and had not been in a long time, so I wonder if this is going to be a painful lesson for some companies.
koverda 8y ago
paywall ladder: http://archive.is/XirsP http://archive.is/XirsP
flankstaek 8y ago
http://archive.today/XirsP http://archive.today/XirsP - Link for those who don't pay for WSJ.
- tambourine_man 8y ago
  Or click the “web” link below the title
  - davidwparker 8y ago
    This hasn't worked for a long long time.
    - venning 8y ago
      It just worked for me. Opened the "web" link in an Incognito tab on Android Chrome.
      - davidwparker 8y ago
        Not sure why I'm getting downvoted. Here are two gifs as proof. Regular logged in Chrome + Incognito Chrome. Maybe I need to be in Mobile? http://g.recordit.co/f2Ygm2R5zl.gif http://g.recordit.co/f2Ygm2R5zl.gif http://g.recordit.co/1maj5kq8Qd.gif http://g.recordit.co/1maj5kq8Qd.gif
        tambourine_man 8y ago
        >Not sure why I'm getting downvoted. Perhaps because you stated your personal experience as though it was universal. It works for me. >Maybe I need to be in Mobile? Nope, Desktop here. Maybe geolocation, who knows.
        davidwparker 8y ago
        >Perhaps because you stated your personal experience as though it was universal. It works for me. TBH, I thought it was. Maybe they've blacklisted my IP or geolocation like you suggest or something else. For the record, I tried it in Android Chrome and it works ok there! Just not in my desktop Chrome. OSX 10.12.6 (16G29) Chrome Version 67.0.3396.99 (Official Build) (64-bit)
    - tambourine_man 8y ago
      It does and has for me.
- wetpaws 8y ago
  obligatory https://outline.com/NyLLU4 https://outline.com/NyLLU4
sillyquiet 8y ago
Isn't the title a bit misleading? It's not the end of employees, it's allowing other entities to specialize in the 'HR' side of things - staffing, payroll, etc, and then contracting with those entities. There are still 'employees' in that sense, they are just 'employees' of the contracting firm.
- bena 8y ago
  Yeah, but there's less permanency. If I'm contracting a company to do X, who they get to do it could change day by day. So I can hire an agency to outsource something to for like a three year contract. That company then churns employees every 6 months under some slightly sketchy practices. Not as worrisome with certain skilled jobs, but for unskilled jobs, it's kind of a rough deal. Drives wages down while the contractor can still charge decent fees. That and the contractee can terminate at any time basically.
jedberg 8y ago
The idea of "employment" is actually an aberration in history. For most of time, we had peasants and landlords. The peasants would work the land and would maybe get some food and a place to sleep. Then industrialization came, and those who were skilled were contractors. They would do work for someone and get paid for the work they did. Then they would hustle for more work. Even in factories, you would show up at the door each day and hope they had enough work for you, and then get paid as you left. It was only very recently that factory owners thought about offering steady pay in exchange for not having to hire a staff every morning.
- chris_wot 8y ago
  Your analogy only mentions factories. Employment covers far more than factories.
  - creaghpatr 8y ago
    Merchants and Mercenaries come to mind
    - EthanHeilman 8y ago
      Things in history that are similar to long term employment: 1. Soldiers e.g. legionnaires in the Roman empires 2. Filial relationships e.g. a lord and the subjects of their court 3. Apprenticeship with a master 4. Membership in a guild that held a monopoly for services within a region 5. Servants and bonded laborers, 6. Monks and Priests 7. Artists, writers, musicians and scholars with wealthy patrons 8. Professors, teachers and tutors 9. Various artisans and craftspeople employed in a noble's household ... There are not exactly the same as modern employment but they do have many of the same characteristics (long term relationships, valued labor, etc...).
- icebraining 8y ago
  There have probably been employees as long as there has been a State. Certainly since the early Chinese and Assyrian empires.
- 8y ago
dv_dt 8y ago
I predict that at some point some of these highly outsourced companies will face competition from a former internal "contracting" company (or sets of them) that have been doing substantial portions of the direct work. If a company has fewer and fewer essential "walls" separating what they do at the core vs a possible competitor the risk goes up. If one categorizes a peripheral competency as something that should have been in-house then the company becomes at risk of getting quickly subsumed by a competition hiring contractors that the prime company originally trained. And it might not show up for a while unless some assumption shifts - in the meantime the short term profits might look pretty good. Another risk might be the collapse or disruption at a contracted company where you have less control.
- bena 8y ago
  That's something I would worry about. When Accenture is boasting that they can do your core competency better than you, you have to start to wonder if outsourcing your core competency was the wisest move.
everdev 8y ago
Having owned a 20+ person services business I can tell you that the paperwork/taxes/regulations around employees was frustrating. Yes, you can outsource this stuff, but why make it so complicated? Added to that, it was a virtual company with employees in 10+ states, it was a nightmare. It's comparatively much easier to just pay a contractor a higher hourly rate and let them pick their own health care, retirement, time off policy, etc.
- nostromo 8y ago
  Employees are both a pain and a liability, and few people in government are even aware of the problem. When I was an employer as a small business, my heart would skip a beat every time I received a letter from the many local, state or federal agencies that would chime in on some requirement as an employer. For someone that wants to do it right, it's very hard to know exactly what "right" is without paying an arm and leg for professional services. Each letter was a reminder about how easy it would be to outsource each position to another company or country.
  - dboreham 8y ago
    >When I was an employer as a small business, my heart would skip a beat every time I received a letter from the many local, state or federal agencies that would chime in on some requirement as an employer. For someone that wants to do it right, it's very hard to know exactly what "right" is without paying an arm and leg for professional services. Hmm. Wondering what country you are in. I'm in the USA and for "reasons.." I ended up performing all the admin tasks relating to employees (payroll, witholding, IRA, unemployment, insurance) over the past 6 months. I had to learn everything from scratch. Yes it was quite a bit of work, but I don't have the same experience you report at all. I haven't received any letters other than helpful reminders of things I need to file. Yes we have an accounting firm who have over the years educated us on what we need to do, forms to file, and so on. But nothing much changes year-to-year so once you're running the cognitive load is not too bad. None of it scares me at all. Certainly nothing in comparison to running the actual business, where you have customers who don't pay you; risk of being sued; requirement to use Node.JS -- you know -- real scary stuff ;)
jasode 8y ago
The media's desire for a short and snappy title makes it misleading. It's really about "The End of (Vertically Integrated) Employees". The various outsourced positions mentioned in the article are still employees. They're just someone else's employees. Companies just don't want to have vertically integrated employees including janitors and cafeteria workers. (E.g. Outsource to Aramark food services and their employees.) They also don't want white-collar employees who aren't necessarily "core" to their business. (E.g. Outsource to Accenture Consulting's employees.)
- ghaff 8y ago
  In general, I agree. But it's also the case that many of the outsourcing companies that provide mostly unskilled services tend to hire people as contractors to the degree permitted by law (or beyond) whereas, historically, the mailroom clerk was an entry-level position in a vertically integrated company.
  - rossdavidh 8y ago
    One downside I see at many companies is that they have no internal jobs like this, to use as a test period for new employees. If you used to use the mailroom clerk (or whatever) position as a test bed to find out things like, does this person have a good work ethic? that cannot be determined in an interview or a resume, then outsourcing those positions is a problem.
    - ghaff 8y ago
      That's true. On the other hand, the "work your way up from the mailroom" model is somewhat predicated on an employment model where people may stay with the same employer for decades--or at least an extended period. [ADDED: For professional jobs, internships and co-op jobs can provide a somewhat similar function.]
      - rossdavidh 8y ago
        True. The assumption of "we don't need/want long term employees" is also something that will be challenged if we see a prolonged period of labor scarcity. Of course, that's a big "if".
kevin_b_er 8y ago
This is the goal of the wealthy class and corporations. To treat the common man as a disposable and interchagable cog. It is always more profitable to not have to ensure the cog cannot encounter one medical issue that bankrupts them. It more profitable when you need not show any loyalty to the cog. We can see the end goal where profit is more important than humanity.
- ryanmarsh 8y ago
  This is the goal of the wealthy class and corporations. This is the inevitable result of healthy complex adaptive systems under free market capitalism. These systems are as effective as they can be inhumane. It's our job to inject humanity into the system.
  - tjr225 8y ago
    Our job? How exactly do you propose that those with no leverage and no power do that job?
    - ryanmarsh 8y ago
      Vote
    - Florin_Andrei 8y ago
      If only there was some kind of mechanism that could regulate the functioning of the whole society, via issuing laws and enforcing them. If something like that is ever invented, I propose we derive its name from the latin word "gubernare" - to steer. /s
      - tjr225 8y ago
        I'm sure this thing we might some day invent will be impervious to corruption or manipulation by those with power, money, and leverage. /s
        8y ago
deviationblue 8y ago
I am not sure how viable this hiring model is for companies that want to develop bleeding edge IP. Speaking only about development jobs: contractors are nomadic, they're not tied or married to your success or failure. From a developer POV, that's not a bad thing. You can just come in, do your thing, and move on to the next great adventure. From the employer side, each time you are training someone new to become familiar with your code base, your company intricacies and peculiarities, etc. which takes time and effort, and learning from failure, time for which may not be available. And the end result is that you may end up with a mish mash that doesn't work well together because the people who made it are gone or moved on. Also, developing is mentally exhausting. Not sure what dev, unless they're really desperate, will want to indulge this and expand that kind of mental effort for less payout or benefits. Or maybe the company only hires these for less innovative stuff or CRUD jobs.
jorblumesea 8y ago
While this is convenient and cheaper for businesses, it also removes financial incentives in place to help businesses succeed. This seems to be short term advantageous but long term destructive. Many a good business idea has come from someone who felt they had something to gain from the company succeeding. Contractors have incentive to put up and shut up, after all, argue with the boss and you are replaced. It also gives core business competency to contractors, who can turn around and give that knowledge or experience to competitors, or even open up shop themselves.
- onemoresoop 8y ago
  Back to the feudal system where employees will be mere serfs
kazinator 8y ago
You don't have "job security" just because you're an employee. You have a wee bit more of it, compared to a contractor, and it depends on your package. Job security is a myth. In computing, it's the subject of a familiar meme: if you're one of the few people that understands some legacy technology that is important and hard to replace, then you have job security. It's a pejorative term: oh, that <expletive> tech, that's just for job security. Nobody who is "with it" wants to touch it.
- flukus 8y ago
  > if you're one of the few people that understands some legacy technology that is important and hard to replace, then you have job security I've never seen this play out in practice. The PHB doing the firing is 3 levels up and has no idea what the legacy technology is or that the employee is hard to replace. They'll be more than happy to fire them even when it screws themselves over. Everyone left has to learn to work with or around this technology.
tmoravec 8y ago
Just a few days back on NYT: Maybe the Gig Economy Isn’t Reshaping Work After All https://mobile.nytimes.com/2018/06/07/business/economy/work-gig-economy.html https://mobile.nytimes.com/2018/06/07/business/economy/work-...
BadassFractal 8y ago
Isn't this almost a repeat of what Microsoft was dealing with in the 90s? Wasn't that whole issue a big deal at one point? I remember them trying to make as few people as possible blue badges (FTEs), causing all sorts of resentment from their contractors for many years.
ryanmarsh 8y ago
There will continue to be less and less security for workers who perform tasks where training and performance are well systematized and unique judgement and skill (think classical professionals) is not a value added. This is the nature of a healthy and functioning economic system. The question is, how do humans provide for themselves a semblance of predictability and sustainability to their work and income? These problems have been solved before. We simply need to expand our thinking a little. Collective bargaining, wage & hour laws, and various systems of education have all worked. The problem evolves as the economy evolves. One thing we should also consider fixing are laws that drive companies to want to outsource certain types of work. I'm sure we will figure this out. What concerns me instead, is the full 10%+ of the population who have such a low IQ that the economy has no use for them. I don't mean this as a normative statement. This is a point of fact. 10% of the adult population has an IQ so low that there are no jobs you can effectively train them for. As automation increases the need for the next 10% will diminish, and so on. This is a problem we have no proven solution for.
rongenre 8y ago
I'm surprised I don't see mention of the oursourced payroll companies: trinet/insperity, etc. I've used them at multiple startups.
Cypher 8y ago
when is the end of paywalls?
osrec 8y ago
The end of employees, and perhaps the start of payroll simplification? Literally every country expects their businesses to go through arduous, arbitrary calculations just to pay people. I run https://usebx.com https://usebx.com and we're in the process of building payroll into our app. It has to be one of the most fiddly bits of dev we've done, with multiple edge cases lurking at every corner to break our logic. I mean, if you make the admin around employing someone so difficult (and expensive), it's hardly surprising that businesses do what they can to avoid it.
Xcelerate 8y ago
> Janitorial work and cafeteria services disappeared from most company payrolls long ago. A similar shift is under way for higher-paying, white-collar jobs such as research scientist [...] Wait, what? What kind of research scientist are we talking about here? The ones that work at Google Brain, DeepMind, etc., the ones formerly known as data scientists at Lyft, or the ones employed by universities that research niche scientific fields?
HillaryBriss 8y ago
>About 70,000 TVCs—an abbreviation for temps, vendors and contractors—test drive Google’s self-driving cars, review legal documents, make products easier and better to use, manage marketing and data projects, and do many other jobs. They wear red badges at work, while regular Alphabet employees wear white ones. A long time ago, Akio Morita, the legendary head of Sony, commented that, even if 4 out of 5 employees were mediocre or poorly behaving, there was 1 employee out of the 5 who was so good, so full of useful ideas and innovation, that he/she made up for the low efficiency of the others. So, Morita didn't want to try and cherry pick the employees. He kept everyone. But Google appears to be pursuing a different strategy.
golemotron 8y ago
In many ways the "end of employees" parallels the "end of marriage." Many people take the option of short term relationships. What's interesting is that society tries to deal with the change by trying to tame the new trend. For employment, it's government trying to classify Uber drivers as employees to give them protections. In relationships, it's governments attempting to set up alimony when co-habitating couples split up.
nine_k 8y ago
Can't help but see this also as the perpetual struggle between business and state. State adds regulations, businesses look for areas where regulations are fewer, and try to do more business at these areas. Then the cycle repeats. Taxi vs Uber, hotels vs AirBnB, employment vs contracting,..
diebir 8y ago
Another failure mode of the American capitalism model. Not an employee, no benefits, no retirement, no job security, disposable. If enough suckers get become contractors, maybe we can finally get universal healthcare and a stronger social safety net.
white-flame 8y ago
For any company that scales up past a certain size, it can be cheaper to run their own department to handle things at volume, than to pay an outside company the costs of handling things at volume plus their markup. They can customize and specialize for their own needs, too. So there will always be integrated employees somewhere.

119 points by rotskoff 8y ago

Hypothesis: this is the result of a long period of labor surplus. If, as seems to be the case in some places like Austin, TX where I live, we are now moving into an era of labor scarcity, there will come unexpected problems. Like, if you find that sometimes important functions don't get done on time because there were not enough people to do it because someone quit unexpectedly, but it's not technically your employee so you don't have much leverage in figuring out what the problem is to make sure you don't get caught short-staffed again. The reason to have an employee is to make sure they are available when you need them. If there are always a surplus of people willing to be there, then outsourcing is a way to reduce your costs. But, if that changes, then the downside of "it's not your problem" becomes more apparent; it still is a problem that impacts you, it's just not _your_ problem, so you can't do much about it. Only some parts of the U.S./world are in a labor shortage situation right now, of course. But until recently, just about nowhere was, and had not been in a long time, so I wonder if this is going to be a painful lesson for some companies.

koverda 8y ago

paywall ladder: http://archive.is/XirsP http://archive.is/XirsP

flankstaek 8y ago

http://archive.today/XirsP http://archive.today/XirsP - Link for those who don't pay for WSJ.

tambourine_man 8y ago
Or click the “web” link below the title
- davidwparker 8y ago
  This hasn't worked for a long long time.
  - venning 8y ago
    It just worked for me. Opened the "web" link in an Incognito tab on Android Chrome.
    - davidwparker 8y ago
      Not sure why I'm getting downvoted. Here are two gifs as proof. Regular logged in Chrome + Incognito Chrome. Maybe I need to be in Mobile? http://g.recordit.co/f2Ygm2R5zl.gif http://g.recordit.co/f2Ygm2R5zl.gif http://g.recordit.co/1maj5kq8Qd.gif http://g.recordit.co/1maj5kq8Qd.gif
      - tambourine_man 8y ago
        >Not sure why I'm getting downvoted. Perhaps because you stated your personal experience as though it was universal. It works for me. >Maybe I need to be in Mobile? Nope, Desktop here. Maybe geolocation, who knows.
        davidwparker 8y ago
        >Perhaps because you stated your personal experience as though it was universal. It works for me. TBH, I thought it was. Maybe they've blacklisted my IP or geolocation like you suggest or something else. For the record, I tried it in Android Chrome and it works ok there! Just not in my desktop Chrome. OSX 10.12.6 (16G29) Chrome Version 67.0.3396.99 (Official Build) (64-bit)
  - tambourine_man 8y ago
    It does and has for me.
wetpaws 8y ago
obligatory https://outline.com/NyLLU4 https://outline.com/NyLLU4

sillyquiet 8y ago

Isn't the title a bit misleading? It's not the end of employees, it's allowing other entities to specialize in the 'HR' side of things - staffing, payroll, etc, and then contracting with those entities. There are still 'employees' in that sense, they are just 'employees' of the contracting firm.

bena 8y ago
Yeah, but there's less permanency. If I'm contracting a company to do X, who they get to do it could change day by day. So I can hire an agency to outsource something to for like a three year contract. That company then churns employees every 6 months under some slightly sketchy practices. Not as worrisome with certain skilled jobs, but for unskilled jobs, it's kind of a rough deal. Drives wages down while the contractor can still charge decent fees. That and the contractee can terminate at any time basically.

jedberg 8y ago

The idea of "employment" is actually an aberration in history. For most of time, we had peasants and landlords. The peasants would work the land and would maybe get some food and a place to sleep. Then industrialization came, and those who were skilled were contractors. They would do work for someone and get paid for the work they did. Then they would hustle for more work. Even in factories, you would show up at the door each day and hope they had enough work for you, and then get paid as you left. It was only very recently that factory owners thought about offering steady pay in exchange for not having to hire a staff every morning.

chris_wot 8y ago
Your analogy only mentions factories. Employment covers far more than factories.
- creaghpatr 8y ago
  Merchants and Mercenaries come to mind
  - EthanHeilman 8y ago
    Things in history that are similar to long term employment: 1. Soldiers e.g. legionnaires in the Roman empires 2. Filial relationships e.g. a lord and the subjects of their court 3. Apprenticeship with a master 4. Membership in a guild that held a monopoly for services within a region 5. Servants and bonded laborers, 6. Monks and Priests 7. Artists, writers, musicians and scholars with wealthy patrons 8. Professors, teachers and tutors 9. Various artisans and craftspeople employed in a noble's household ... There are not exactly the same as modern employment but they do have many of the same characteristics (long term relationships, valued labor, etc...).
icebraining 8y ago
There have probably been employees as long as there has been a State. Certainly since the early Chinese and Assyrian empires.
8y ago

dv_dt 8y ago

I predict that at some point some of these highly outsourced companies will face competition from a former internal "contracting" company (or sets of them) that have been doing substantial portions of the direct work. If a company has fewer and fewer essential "walls" separating what they do at the core vs a possible competitor the risk goes up. If one categorizes a peripheral competency as something that should have been in-house then the company becomes at risk of getting quickly subsumed by a competition hiring contractors that the prime company originally trained. And it might not show up for a while unless some assumption shifts - in the meantime the short term profits might look pretty good. Another risk might be the collapse or disruption at a contracted company where you have less control.

bena 8y ago
That's something I would worry about. When Accenture is boasting that they can do your core competency better than you, you have to start to wonder if outsourcing your core competency was the wisest move.

everdev 8y ago

Having owned a 20+ person services business I can tell you that the paperwork/taxes/regulations around employees was frustrating. Yes, you can outsource this stuff, but why make it so complicated? Added to that, it was a virtual company with employees in 10+ states, it was a nightmare. It's comparatively much easier to just pay a contractor a higher hourly rate and let them pick their own health care, retirement, time off policy, etc.

nostromo 8y ago
Employees are both a pain and a liability, and few people in government are even aware of the problem. When I was an employer as a small business, my heart would skip a beat every time I received a letter from the many local, state or federal agencies that would chime in on some requirement as an employer. For someone that wants to do it right, it's very hard to know exactly what "right" is without paying an arm and leg for professional services. Each letter was a reminder about how easy it would be to outsource each position to another company or country.
- dboreham 8y ago
  >When I was an employer as a small business, my heart would skip a beat every time I received a letter from the many local, state or federal agencies that would chime in on some requirement as an employer. For someone that wants to do it right, it's very hard to know exactly what "right" is without paying an arm and leg for professional services. Hmm. Wondering what country you are in. I'm in the USA and for "reasons.." I ended up performing all the admin tasks relating to employees (payroll, witholding, IRA, unemployment, insurance) over the past 6 months. I had to learn everything from scratch. Yes it was quite a bit of work, but I don't have the same experience you report at all. I haven't received any letters other than helpful reminders of things I need to file. Yes we have an accounting firm who have over the years educated us on what we need to do, forms to file, and so on. But nothing much changes year-to-year so once you're running the cognitive load is not too bad. None of it scares me at all. Certainly nothing in comparison to running the actual business, where you have customers who don't pay you; risk of being sued; requirement to use Node.JS -- you know -- real scary stuff ;)

jasode 8y ago

The media's desire for a short and snappy title makes it misleading. It's really about "The End of (Vertically Integrated) Employees". The various outsourced positions mentioned in the article are still employees. They're just someone else's employees. Companies just don't want to have vertically integrated employees including janitors and cafeteria workers. (E.g. Outsource to Aramark food services and their employees.) They also don't want white-collar employees who aren't necessarily "core" to their business. (E.g. Outsource to Accenture Consulting's employees.)

ghaff 8y ago
In general, I agree. But it's also the case that many of the outsourcing companies that provide mostly unskilled services tend to hire people as contractors to the degree permitted by law (or beyond) whereas, historically, the mailroom clerk was an entry-level position in a vertically integrated company.
- rossdavidh 8y ago
  One downside I see at many companies is that they have no internal jobs like this, to use as a test period for new employees. If you used to use the mailroom clerk (or whatever) position as a test bed to find out things like, does this person have a good work ethic? that cannot be determined in an interview or a resume, then outsourcing those positions is a problem.
  - ghaff 8y ago
    That's true. On the other hand, the "work your way up from the mailroom" model is somewhat predicated on an employment model where people may stay with the same employer for decades--or at least an extended period. [ADDED: For professional jobs, internships and co-op jobs can provide a somewhat similar function.]
    - rossdavidh 8y ago
      True. The assumption of "we don't need/want long term employees" is also something that will be challenged if we see a prolonged period of labor scarcity. Of course, that's a big "if".

kevin_b_er 8y ago

This is the goal of the wealthy class and corporations. To treat the common man as a disposable and interchagable cog. It is always more profitable to not have to ensure the cog cannot encounter one medical issue that bankrupts them. It more profitable when you need not show any loyalty to the cog. We can see the end goal where profit is more important than humanity.

ryanmarsh 8y ago
This is the goal of the wealthy class and corporations. This is the inevitable result of healthy complex adaptive systems under free market capitalism. These systems are as effective as they can be inhumane. It's our job to inject humanity into the system.
- tjr225 8y ago
  Our job? How exactly do you propose that those with no leverage and no power do that job?
  - ryanmarsh 8y ago
    Vote
  - Florin_Andrei 8y ago
    If only there was some kind of mechanism that could regulate the functioning of the whole society, via issuing laws and enforcing them. If something like that is ever invented, I propose we derive its name from the latin word "gubernare" - to steer. /s
    - tjr225 8y ago
      I'm sure this thing we might some day invent will be impervious to corruption or manipulation by those with power, money, and leverage. /s
      - 8y ago

deviationblue 8y ago

I am not sure how viable this hiring model is for companies that want to develop bleeding edge IP. Speaking only about development jobs: contractors are nomadic, they're not tied or married to your success or failure. From a developer POV, that's not a bad thing. You can just come in, do your thing, and move on to the next great adventure. From the employer side, each time you are training someone new to become familiar with your code base, your company intricacies and peculiarities, etc. which takes time and effort, and learning from failure, time for which may not be available. And the end result is that you may end up with a mish mash that doesn't work well together because the people who made it are gone or moved on. Also, developing is mentally exhausting. Not sure what dev, unless they're really desperate, will want to indulge this and expand that kind of mental effort for less payout or benefits. Or maybe the company only hires these for less innovative stuff or CRUD jobs.

jorblumesea 8y ago

While this is convenient and cheaper for businesses, it also removes financial incentives in place to help businesses succeed. This seems to be short term advantageous but long term destructive. Many a good business idea has come from someone who felt they had something to gain from the company succeeding. Contractors have incentive to put up and shut up, after all, argue with the boss and you are replaced. It also gives core business competency to contractors, who can turn around and give that knowledge or experience to competitors, or even open up shop themselves.

onemoresoop 8y ago
Back to the feudal system where employees will be mere serfs

kazinator 8y ago

You don't have "job security" just because you're an employee. You have a wee bit more of it, compared to a contractor, and it depends on your package. Job security is a myth. In computing, it's the subject of a familiar meme: if you're one of the few people that understands some legacy technology that is important and hard to replace, then you have job security. It's a pejorative term: oh, that <expletive> tech, that's just for job security. Nobody who is "with it" wants to touch it.

flukus 8y ago
> if you're one of the few people that understands some legacy technology that is important and hard to replace, then you have job security I've never seen this play out in practice. The PHB doing the firing is 3 levels up and has no idea what the legacy technology is or that the employee is hard to replace. They'll be more than happy to fire them even when it screws themselves over. Everyone left has to learn to work with or around this technology.

tmoravec 8y ago

Just a few days back on NYT: Maybe the Gig Economy Isn’t Reshaping Work After All https://mobile.nytimes.com/2018/06/07/business/economy/work-gig-economy.html https://mobile.nytimes.com/2018/06/07/business/economy/work-...

BadassFractal 8y ago

Isn't this almost a repeat of what Microsoft was dealing with in the 90s? Wasn't that whole issue a big deal at one point? I remember them trying to make as few people as possible blue badges (FTEs), causing all sorts of resentment from their contractors for many years.

ryanmarsh 8y ago

There will continue to be less and less security for workers who perform tasks where training and performance are well systematized and unique judgement and skill (think classical professionals) is not a value added. This is the nature of a healthy and functioning economic system. The question is, how do humans provide for themselves a semblance of predictability and sustainability to their work and income? These problems have been solved before. We simply need to expand our thinking a little. Collective bargaining, wage & hour laws, and various systems of education have all worked. The problem evolves as the economy evolves. One thing we should also consider fixing are laws that drive companies to want to outsource certain types of work. I'm sure we will figure this out. What concerns me instead, is the full 10%+ of the population who have such a low IQ that the economy has no use for them. I don't mean this as a normative statement. This is a point of fact. 10% of the adult population has an IQ so low that there are no jobs you can effectively train them for. As automation increases the need for the next 10% will diminish, and so on. This is a problem we have no proven solution for.

rongenre 8y ago

I'm surprised I don't see mention of the oursourced payroll companies: trinet/insperity, etc. I've used them at multiple startups.

Cypher 8y ago

when is the end of paywalls?

osrec 8y ago

The end of employees, and perhaps the start of payroll simplification? Literally every country expects their businesses to go through arduous, arbitrary calculations just to pay people. I run https://usebx.com https://usebx.com and we're in the process of building payroll into our app. It has to be one of the most fiddly bits of dev we've done, with multiple edge cases lurking at every corner to break our logic. I mean, if you make the admin around employing someone so difficult (and expensive), it's hardly surprising that businesses do what they can to avoid it.

Xcelerate 8y ago

> Janitorial work and cafeteria services disappeared from most company payrolls long ago. A similar shift is under way for higher-paying, white-collar jobs such as research scientist [...] Wait, what? What kind of research scientist are we talking about here? The ones that work at Google Brain, DeepMind, etc., the ones formerly known as data scientists at Lyft, or the ones employed by universities that research niche scientific fields?

HillaryBriss 8y ago

>About 70,000 TVCs—an abbreviation for temps, vendors and contractors—test drive Google’s self-driving cars, review legal documents, make products easier and better to use, manage marketing and data projects, and do many other jobs. They wear red badges at work, while regular Alphabet employees wear white ones. A long time ago, Akio Morita, the legendary head of Sony, commented that, even if 4 out of 5 employees were mediocre or poorly behaving, there was 1 employee out of the 5 who was so good, so full of useful ideas and innovation, that he/she made up for the low efficiency of the others. So, Morita didn't want to try and cherry pick the employees. He kept everyone. But Google appears to be pursuing a different strategy.

golemotron 8y ago

In many ways the "end of employees" parallels the "end of marriage." Many people take the option of short term relationships. What's interesting is that society tries to deal with the change by trying to tame the new trend. For employment, it's government trying to classify Uber drivers as employees to give them protections. In relationships, it's governments attempting to set up alimony when co-habitating couples split up.

nine_k 8y ago

Can't help but see this also as the perpetual struggle between business and state. State adds regulations, businesses look for areas where regulations are fewer, and try to do more business at these areas. Then the cycle repeats. Taxi vs Uber, hotels vs AirBnB, employment vs contracting,..

diebir 8y ago

Another failure mode of the American capitalism model. Not an employee, no benefits, no retirement, no job security, disposable. If enough suckers get become contractors, maybe we can finally get universal healthcare and a stronger social safety net.

white-flame 8y ago

For any company that scales up past a certain size, it can be cheaper to run their own department to handle things at volume, than to pay an outside company the costs of handling things at volume plus their markup. They can customize and specialize for their own needs, too. So there will always be integrated employees somewhere.