At this point I am mainly protecting my own job. I just see it as endemic to our organization, not wanting to get rid of people who need to go. And now, we are cutting the flesh to the bone and getting rid of everybody, and I can’t help but think, if you had been judicious in the past and careful and worked to cultivate your good people instead of just keeping everyone, maybe we wouldn’t be in this position.
But I need to just keep my head down and look to myself.
It’s a big part of it. Cost too. Companies don’t have to pay out benefits or pensions.
I have mixed feelings on the subject. As someone who does project-based work, I’m used to changing “jobs” frequently, regardless if I am employed at the same firm for different clients or a different company all together.
One thing you don’t get as a contractor is the benefits of being with an organization for a period of time. Few people can walk into a new role and hit it out of the park with no prior ramp-up. Even as a manager, it is difficult for me to get a project done if I have no idea what the people on my team can do. So as a contractor, you often don’t get to build up the relationships and network within an organization.
Then again, some contractors stay with a company for years. And in those cases, I feel the company is just exploiting a loophole to reduce costs which also has the unintended consequence of locking the employee in the same role forever.
I’ve worked places where the primary method for involuntary separation (those HR terms!) was a “lack of work letter”, or something like that. If you’re billing your time to clients, and no client wants you and no other team wants you, you’re gone. You see this a lot around DC with government contractors. I’m not sure I ever saw an actual firing. But maybe I missed the code words. “Whatsit is transitioning off this team” was used both when someone was moving to a different team for happy reasons and when a client didn’t want someone.
Here’s something I’ve never understood: My understanding is that contractors are short-term independent workers who are hired on a limited basis, and that a company doesn’t have to pay them health insurance or other benefits because they are not their “employers.” They also have fewer protections because they are hired for the duration of a project, so if the project is cancelled or completed the client owes them nothing more.
(Now I’m not saying this is right… It could be that my interpretation is horribly, horribly wrong and if so please correct me.)
So if an employer can escape their obligations by hiring “contractors” instead of “employees,” what prevents them from just designating every single person in the building as an independent contractor who is being paid temporarily to complete a project? I mean, why not just declare every single person in Wal-Mart (or wherever) is an “independent contractor” and thereby avoid any paying any benefits or obligations to them?
Because employers don’t have to withhold payroll taxes or get Worker’s Comp insurance for ICs, the IRS has set up the laws about who does and does not qualify as an IC. They’re pretty complex, but it boils down to - if the company says “Here’s the job”, and you do it on your own time with your own equipment for a flat fee, you’re definitely an IC. If you are required to use their equipment and come in and work at a specific time and place and they tell you exactly how the job is to be done and you’re paid an hourly rate, you’re definitely an employee.
It gets murky, and a lot of employers abuse the system and treat people as ICs when they are actually employees. But they aren’t supposed to, and the IRS will come down pretty hard if they’re caught. (The IRS has a form you can use to report it if you feel you should be reclassified, by the way.)
In just a few short years, the company that employs me has gone from being proud that the average length of employment throughout the company rosters was 18 years to being even more proud that the total workforce has been “streamlined” by 27%. Years back, it was considered a managerial failure if you had to fire someone. Every effort was made to retrain, reassign, or counsel poorly performing employees. In 2016, managerial success is measured on how many people you can get rid of and still manage to keep your department functioning.
There was considerable resistance to the ‘new’ policies when they were first established. Long-time managers didn’t want to fire long-time employees who were reliable and had bucketloads of experiential knowledge on the job. New management’s solution? Fire 'em both! So now everyone is on board with the “I’ll get rid of YOU so they don’t get rid of ME” philosophy.
So whatever difficulties there are in offloading deadwood elsewhere, we are certainly not experiencing it here.
The short version is that there are requirements for being classified as an independent contractor. Some may differ depending on the work involved but as an example, I’ll take a job that can be done by either an employee or a contractor- office cleaners. A company can hire its own cleaning staff, determine their work hours , provide the supplies and equipment and determine how they do the work. Those are employees. A small company can also hire me to clean their offices outside of business hours , expect me to provide my own tools and supplies, and expect a certain result while not dictating my methods. I am an independent contractor. It’s no different from the company’s standpoint than if they hired a janitorial services company, which brings me to the in-between stage, where the company contracts with another company to provide services- for example a day camp contracts with a bus company to provide transportation. The bus drivers are contractors from the day camp’s point of view, but employees from the bus company’s point of view.
Peole who work at a Walmart are almost always going to be employees, because a Walmart-type company is going to have a great deal of control over how and when people do their work. Smaller companies may have a mix of employees, independent contractors ( the CPA with a number of small businesses as clients) and contracts with other companies to provide specific functions such as cleaning or HR services.
Before the various rulings that people mentioned above, lots of companies had contractors who were effectively employees. Some worked for me. In our case they got paid about as much as regular employees, but they didn’t count against headcount, and so came out of a different bucket of budget. The benefit wasn’t cost but that you could let them go without paying termination money or other hassle.
And most places don’t hire individual contractors but go through a company which is bonded, and which for good jobs pays the benefits. (Which you pay in their markup.)
The current dustup is whether Uber drivers are contractors or employees.
Well no, it means you can’t be required to join a union to get the job. At-Will employment is what allows the employer to terminate for pretty much any or no reason. There are 25 right to work states, but every state is at-will, with some having exceptions for things like implied contract or Covenant of Good Faith.
Back when I had the authority to hire/fire, I made little to no use of it, mostly because it’s very difficult to find people who either already know or have apititude for the line of work. If you find somebody with either, you hang onto them for dear life, personality quirks be damned.
Those with the quirks and/or inability to deal with the public for whatever reason (language barrier, poor social skills, etc.) are quietly given the less-desirable shifts so they don’t have to deal with the public.
In my state government employee life, I had a probationary employee who decided she didn’t like the job and stopped showing up. She did not answer phone calls, emails or answer the door when we sent someone to check on her, although she later emailed that she didn’t appreciate the intrusion. Seems like a no-brainer, right? Well, HR said we needed more documentation before we could fire her. Uh…if we can’t fire a probationary employee who has abandoned her job, then who CAN we fire???
Eventually she showed up and most considerately handed us a resignation letter, but I never got over my disgust with HR.