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Getting Organized

Monday, March 2nd, 2009

It’s become commonplace for big companies to to use employment agencies to fill in headcount cheaply. These agencies employ workers, often called “temps” or “contractors”, but in reality they are full time employees (i.e. they receive W2s) of the employment agency.

This is a really shitty set up for the workers, and this recent 10% rate cut by Microsoft is a perfect example why:

Let’s pretend you’re a temp at Microsoft. Every day you go to work at a building that says “Microsoft” on the side. You sit around with other Microsoft employees and do Microsofty things. But in reality, you don’t work for Microsoft at all. You work for Volt Workforce Solutions, an employment agency. You’re vaguely aware of this — after all they pay you and you fill in their time card, but this is a pretty common practice (you hear) so you’re not too worried about it.

Then one day, Volt sends you an email saying “Agree to this rate cut.” What happens if you don’t agree? To be blunt, you will be likely terminated — after Volt follows the procedure in the employee handbook, natch. There is a chance you’ll be reassigned to another contract, but it’s likely that you’ll just go.

And the best part is there’s jack shit you can do about this.

In at-will states (like Washington), it is perfectly legal to fire any employee for any reason, bar a couple of exceptions: discrimination, for taking medical leave, and for refusing to commit an illegal act. All the employer has to do is not do any of those things and follow their own procedure (usually outlined in their employee handbook).1

The comments on the post I linked to above break my heart. There are so many people in my industry that are completely clueless and have been suckered in by the promise of a good job and the chance to get ahead. Rugged individualism is rampant in the tech industry — there’s this myth that if you’re smart enough, or do a job esoteric enough, you’re somehow magically protected from being fired.

This isn’t a dating sim. You can be fired for any reason at any time. Here’s an anecdote for you:

I once worked at an employment agency for a big tech company. Two weeks before my contract was up, I told my bosses that I wouldn’t be renewing with them, but that I’d had a good run and no hard feelings. And that was the truth: I was tired of the corporate cube farm life and wanted to do something else.

A few days later, before I head in to work, I get a call. It’s from my employment agency. I’m told not to go into work, and to instead box up any property and ship or deliver it to some address out in the sticks.

I eventually learn that all of the contractors on my group had been dismissed as well. Speculations were made that it was for cost reasons, but nobody had a good answer.2

This is reality. This is how the system works. No puppies. No sunshine. No rainbows. No magical job security because you’re awesome.

Reasons for optimism

It’s not all bad news. The site I linked to at the beginning of this entry, msratecuts.org, was set up as a result of the recent 10% reduction. The first step towards fixing this situation is to realize that there is incredible power in numbers.

There’s also this David Sirota piece in The Nation last year that talks specifically about about Microsoft’s temps and the efforts of WashTech to organize them.

A note on comments

Consider this list before commenting:

  • Unions aren’t bad. Neither are they good. A union is a type of organization, like a corporation or boy scout troop. Some unions are bad. Some unions are good.
  • Spare us all the rugged individualism, please. Think through the implications of what you’re saying and watch Gattaca a few times before you start ranting about Social Darwinism.
  • Sit still for five minutes and think deeply about this: “There are other people in this world who are less fortunate and talented than I am. It’s possible that their situation might be different from my own, and my comment should reflect that.”

  1. Of course, the worker gains the benefit of being able to leave their job at anytime, too. Using that in a bargaining situation is a bit like threatening to nuke your own country and cackling as you describe the fallout to your (nonplussed) downwind neighbor. 

  2. FYI: I hold no grudges against my direct managers or coworkers there. In fact, they’re quite awesome. The project was a lot of fun and they did the best job they could in a really hellish corporate environment. Hats off to them. 

Comments

  1. Dan Weeks replied on March 2nd, 2009:

    Nicely stated. I learned after surviving the first lay-offs of my life (75% of the company got cut and I was saved by being deemed “core” to the company continuing). It’s all business, both for you and your employer. That’s why you can’t let anyone make you feel bad if you decide to leave, it’s not personal, it’s you looking out for you.

    I’m envious of your jump to indie and I’ll be watching to see how you do. It’s inspirational.

    Also, it’s a boy scout troop, not a troupe. The latter is actors, musicians and the like. Troop for boy & girl scouts is based on military organization.

  2. Robert Accettura replied on March 2nd, 2009:

    Very good points.

    One of the big reasons that people stick with agencies or working directly for corporations is simply the benefits rock. Smaller businesses increasingly just can’t afford good or any benefits these days. The downside is that your always just minutes away from being laid off (heck I’ve seen people laid off weeks into their new job… and that means virtually no severance since your a “probationary employee”).

    This really is in part an extension of the health care discussion going on in the nation. Should there be universal health care (or simply affordable) employees may no longer feel so bound to a particular employer. This is one of the primary fears of large employers and one of the biggest hopes for many employees and small businesses who want to compete with the big guys for employees. Reality is in most industries during most economic conditions there are quite a few jobs out there. The ones with good benefits are what people really fight for.

  3. Colin Barrett replied on March 2nd, 2009:

    Dan Weeks: Thanks a lot. I’ve fixed the typo.

    Robert Accettura: Wisdom. If we switch to single payer or some other sort of full (hell, even some) coverage system, you will see small businesses flourish. The Obama folks are real smart, I would be quite surprised if they didn’t bring that up when the time comes.

  4. Augie replied on March 2nd, 2009:

    It’s all well and good, but the problem comes in when collective bargaining organizations force out individuals by making exclusive agreements - it’s not uncommon out here for musicians to not really want to be a part of the musicians’ union, but to have to in order to get work at any major orchestra or theater. For many, the union takes a piece off the top for little (or no) perceived benefit. Without right-to-work systems (where a union can’t force me to join) dysfunctional unions never reform, and simply continue on through the inertia of past agreements.

    (NB: not saying unions are categorically bad, but am suggesting a union being able to say “join up or find a new employer” is bad in a similar way to all employment being at-will.)

  5. Nicholas replied on March 2nd, 2009:

    Augie: Unions often find that they are completely sidelined by not having an exclusive agreement with a corporation. If employees don’t have to be members of the union then it is easy for unaffiliated individuals to leach off of the union’s collective bargaining power without providing any support. At the same time the union looses any power it would have in a weak job market because if the union were to strike the company could simply hire non union employees for less money. There are ways to deal with these issues, but if you look at most places where they have simple right to work laws you won’t find unions (think the deep south).

  6. Colin Barrett replied on March 2nd, 2009:

    Augie: Nicholas nails it.

    You also mentioned that unions take a piece off the top. Here’s a real life example: American Federation of Musicians Local 677 (both of my parents are members): $200 yearly and the work dues (i.e those taken from every job) are 4.5%.

    Workers who are in unions make more than their non-union counterparts. This isn’t just common sense, it’s a phenomenon studied by economists called the “union wage premium”. According to Wikipedia, a generally accepted figure is around 15%.

    Assuming that the work dues weren’t taken into affect when that calculation was made (not necessarily a valid assumption, but useful for illustrative purposes), joining a union is a net 10.5% raise.

    Yes, I understand it can be scary to join an organization that takes fees off the top, but there are real, measurable benefits to union membership that need to be considered.