Good news? Not quite. I was laid off last month. Company restructuring, my job was eliminated to save money. I actually learned about it in June, but had good rea$on to $tay, if you follow. So I satayed and now I’m looking for a job. I’m searching all the appropriate web sites daily, and today I find a really good one. Until I realize that it’s my former employer, looking for two long-term contract programmers. The idiots in charge demanded headcount reduction, so I hold no real animosity to those who are currently in power, but now they are short staffed and they can only hire contract programmers. No benefits. Stupid, short-term stock price increasing moronic senior management doesn’t have the sense to plan further than the IPO.
My department is short staffed. Incredibly short staffed. However, we are only allowed to replace people who leave. We cannot get approval to increase head count. Our market is booming and there are many opportunities we can’t take advantage of because we don’t have people to do the work. Many of those who do leave are burned out because of overwork. Yet we cannot increase headcount. We try every time we submit budget proposals. We document and support our case in great detail. And we still can’t increase head count.
We can, however, hire contractors to our hearts’ content. We have no trouble getting money in the budget for contractors. I could submit a half assed, poorly supported proposal to get an additional contractor and all they’d ask me is “is that really all the money you need–could you use a few more contractor hours.”
The disadvantageous of contractors are numerous: contractors can’t sign off on anything, they can’t get access to our most sensitive systems, they’re shorter term so they’re always getting up the learning curve…
But it’s not because my company is evil or even trying to save money on benefits. It’s because they’re incredibly conservative. Several years ago we had lay offs. Not a lot, but enough that those who were there remember them and dread ever having that happen again. No one wants to bring in additional head count only to see our market change requiring more lay offs. It’s going to take a lot of growth and a higher level of confidence before management feels safe increasing staff.
This employer is not conservative at all. The new senior executives are spending money willy-nilly on important things like new offices for senior executives, new landscaping for the grounds, remodelling the lobby and building a a gym for employees. But I’m sure the reasons for hiring contractors are the same as you describe. they have too much work for the current staff, they can’t actually hire anyone fulltime, but “How many contractors do you need?” is a question I bet gets passed around.
I don’t know about US law, but I do know my company policy is such that we have to be very careful that we’re not using consultants as employees that don’t get benefits or require employment taxes. While it can be easy to get the budget for consultants, the documentation for compliance can be complicated and is closely examined. That’s where we’ll see push back if our reqs don’t clearly specify that our need is for someone to do specific tasks with a clear completion.
My earlier post may have made it seems like consultants were substitutes for regular employees, and I apologize if it seemed like that. They’re really not equivalent. That’s one reason why bringing in consultants can’t fix all the problems of being short staffed.
This company kind of has a “contractor culture” that goes back years. In fact, I believe that they were forces to hire a consultant full time since the work he was doing was determined to be that of a full time employee. Or something. They have a hiring freeze, but they can always get contractors (who don’t get company benefits, etc). I just hate that all this is so apparent after lost my job. I should have been looking a long time ago. I just really really hope to have a job long before my severance runs out, so I can actually keep that money instead of living off it.
Here in Washington state it’s a law that contractors cannot work for a company for more than 1 year without being hired on by the company. So you get a lot of contract that end after a year, then resume after the mandatory 6 month waiting period. It’s my understanding this law came about because Microsoft was relying heavily on contractors in the manner you detailed above, and the contractors were pretty pissed about not getting stock options and such. (This coming from a friend who is a former contractor, now FT Microsoft employee.)