Depending on the source, your industry made between $75 and $99.6 billion dollars just last year, but what’s $20 billion in these times, anyway? Forty percent of your employees are temporary, at least in several of the firms. The industry average is 25% of employees are outsourced and released when the product is finished. One firm, who shall remain nameless, each year signs over 100 contracts with teenagers who do contract work for you. Your industry, according to Michigan State University professor Casey O’Donnell, “is a decade ahead of where a lot of industries are going.” Yes, having forty percent of your employees being outsourced sounds like a great future for all, and the industry we’re looking at isn’t pounding nails or lifting sacks of concrete.
Of course, there are downsides to outsourcing: “Many companies play down the use of outside labor to encourage the perception that they alone created the technical wizardry” of the product. Sounds like the suck-ups have made it to the board room, huh? After all, the people who created the product don’t deserve any recognition. “Outsiders are sometimes required to sign ‘secret team’ contracts in which they are left out of production credits.” So if you’re a temporary worker, you won’t be able to prove that you worked on a product, to put that accomplishment on your resume to get a “real job.” It’s good to know that the industry is going to treat you like furniture, and deny you the ability to claim any success, at least when looking at the product.
Let’s not forget the global economy’s involvement in all of this. A firm based in San Diego farms out some of the work to a firm in Utrecht, Netherlands, who pays a worker in Tegucigalpa, Honduras, $7.00 an hour. From one side of the globe to the other, with billions of dollars in revenue, and paying workers in Honduras $7.00 an hour.
The multi-billion dollar industry admits that “overseeing outsourced labor is so time consuming” but apparently it beats the alternative of paying people when there isn’t much to do. Of course, some of us might think that what is to be done should be determined by the higher ups, the country club class, the Ivy-League MBAs that think up all of the brilliant ways to make themselves wealthier and how to maximize profits. It would seem that the folks up in the C-suite would be determining what needs to be done, but apparently not. Even with overseeing outsourced work being time consuming, it is better than paying people a regular wage, especially when your firm is only making a few hundred million a year.
The industry that I am referring to is the video gaming industry, and you can read all about it in The Wall Street Journal of April 11, 2017. High tech has come a long way, all the way to $7.00 an hour jobs in Tegucigalpa, Honduras to high school teenagers programming in their high-school library, to H1-B immigrants paid fractions of the wages American workers would be paid. Talent is now outsourced, and soon there will be more and more of it, even in the previously high-paid, well-educated information technology and programming departments. We have met the enemy and he is us. The future is micro employment. Independent contractors will be doing everything, instead of cross-training.
It might come as a surprise, but there is a steel company in America that keeps employees on the payroll even when business is slow. When business is slow, they find work for the employees, and when there is a lot of work, the employees understand that they have to work overtime, because the work is there and has to be done. The company that I am referring to is Nucor Corporation, where the swings of the economy are dealt with by keeping employees loyal. Loyalty. You might remember it from a long time ago. Loyalty is where there is allegiance to someone or organization or entity. Nucor is a very successful company that understands that loyalty is a two-way street. Cats, dogs and people are loyal when showed loyalty. Thieves, suck ups and sociopaths consider loyalty an opportunity to exploit people, a weakness that presents an opportunity.
People used to be loyal to products or organizations, and organizations to their staff. Now there are essentially two sources of loyalty; something that you find at the animal shelter and the other loyalty is to money. Of course, loyalty has always been a two-way street. You are loyal to entities that are loyal to you. I am consistently amazed by the organizations that pile on work, leave you alone to work late to deal with hours of problems that you didn’t create, and then consider you disloyal when you find a job where they treat you better; they have no idea what loyalty is or should be.
It’s all about the money. If we can farm it out, even if we have to watch or oversee the workers carefully, it is still cheaper than hiring people. Organizational knowledge, that concept of knowledge gained from remaining in an organization and learning how to do things from experience within the organization, has no more value. It’s the 1099 economy, the gig economy, the micro employed. She dated you all year, and then dumped you right after prom. People have moral objections over buying goods produced in sweat shops, and yet our outsourced goods and services are perfectly acceptable. They save us money. They can’t get health insurance, they don’t know where their next paycheck is coming from, but they’re like entrepreneurs. Could it be that America’s corporate leadership, which can’t seem to get pay right, can’t get running companies to keep and retain talent, so, due to their ineptitude, everything gets farmed out?