The Tech Industry's Legacy: Creating Disposable Employees 271
An anonymous reader writes: VentureBeat is running an indictment of the tech industry's penchant for laying off huge numbers of people, which they say is responsible for creating a culture of "disposable employees." According to recent reports, layoffs in the tech sector reached over 100,000 last year, the highest total since 2009. Of course, there are always reasons for layoffs: "Companies buy other companies and need to rationalize headcount. And there's all that disruption. Big companies, in particular, are seeing their business models challenged by startups, so they need to shed employees with skills they no longer need, and hire people with the right skills."
But the article argues that this is often just a smokescreen. "The notion here is that somehow these companies are backed into a corner, with no other option than to fire people. And that's just not true. These companies are making a choice. They're deciding that it's faster and cheaper to chuck people overboard and find new ones than it is to retrain them. The economics of cutting rather than training may seem simple, but it's a more complex calculation than most people believe. ... Many of these companies are churning through employees, laying off hundreds on one hand, while trying to hire hundreds more."
But the article argues that this is often just a smokescreen. "The notion here is that somehow these companies are backed into a corner, with no other option than to fire people. And that's just not true. These companies are making a choice. They're deciding that it's faster and cheaper to chuck people overboard and find new ones than it is to retrain them. The economics of cutting rather than training may seem simple, but it's a more complex calculation than most people believe. ... Many of these companies are churning through employees, laying off hundreds on one hand, while trying to hire hundreds more."
It's the metrics (Score:4, Interesting)
Big business is in thrall to the MBA's and their "scientific" management. If something can be measured, it's legit; if something can't be, it isn't. The thing is though is that, at any point in time and given any development in statistical research methods, some things are going to be more easily measured than others. If you have a business culture that believes you're clear-eyed and sensible when looking at numbers, but wishy-washy and "unscientific" when going by experience and gut feelings -- and, even worse, if you have a similar investor culture financing the whole thing -- you will run into trouble.
It's the numbers guys firing people with experience (and the judgment that comes with it), and replacing them with spanking brand new rock stars, or foreigners with well-crafted resumes. Add up the columns, contact human resources, collect your bonus check. If it all goes wrong several years down the road, you'll be working somewhere else anyway. That's the business model we're all suffering under.
Re:It's about raising the mean... (Score:5, Interesting)
Not always... really depends on the quality of management. Expensive people aren't always the best people to lay off anyway since they tend to have significantly higher layoff costs. (severance, etc).
The last company I worked for had some real financial issues (highly profitable company in-general but suffering from a crushing debt load killing all of those profits) we ended up going through 2 rounds of layoffs. The first, dictated by the board but implemented locally, was stellar. It's amazing how much better a company can perform when you can shed a bunch of people who were holding you back. You feel the bite a little bit because a person who was only operating at 20% was still doing 20% work that has to be made up somewhere but you also get rid of some costly bottlenecks leaving you with clearer holes to fill for partial re-hire.
Round 2 was terrible: This one was mandated by a gov't takeover so not only were the numbers MUCH higher but they were based on nationality / new background checks instead of manager input / performance. Honestly the capability of the company was severely neutered.
Honestly a layoff of the first variety every 5-10 years is good for culling the chaff. Unfortunately most larger companies seem to operate more like the second variety when they shed numbers to make the shareholders happy.
Re:Time for a UNION! (Score:5, Interesting)
In other developed countries (France, Germany, Japan, etc) there are a lot more hoops to jump through to lay someone off, and the layoff packages are legally set to be much greater. After that the safety net is much stronger while you look for more work. On the upswings companies hire less than a company in the US might, but layoffs are pretty small for even pretty big downturns. It ends up much better for the workers, though it can tie the hands of the companies when they are competing against the rapacious capitalists in the US or China.
I see such protections as an alternative to a union for workers who are very specialized.
Instead most workers are "At Will" employees. You can quit anytime, and can be cut loose at any time. Most full-time employees don't realize that they have less actual job security than the contractors they might be working with.
Re:Time for a UNION! (Score:5, Interesting)
This is an INDUSTRY problem, not particularly an employer problem, though they certainly do a lot to fan the flame. A union won't solve all the problems and will make some of them much worse.
Employers:
- Do not hire a person until existing employees are nearly 100% overbooked. No training or ramp-up time in the schedule.
- Want to hire the cheapest person who can barely get the job done
- Do not want to spend money on training or other activities that might increase employee value on the market (even though, in my opinion, that shoudln't be true)
- Do not significantly value sub E-level employees as investments, but rather fungible commodities to broker
- Vastly prefer to lay off people in position who have become expensive and hire H1Bs to replace them to cut payroll costs, essentially creating a glut of people with the same skillset.
Employees, particularly in Tech:
- Want to hire a drop in replacement. Look for someone with many years of experience doing exactly the job being hired for (i.e. create a niche/no-train, no hope environemtn)
- Tend to focus on job skills over job experience. Skills can be taught to any college hire, and ARE taught in low-cost regions, but tend not to be taught in western schools. Think languages (C), tools, mechanics. Things if you have the proper background and education you can pick up in a month or two. For any non-trivial job however, this is nearly worthless.
- Misapprehend "experience". Experience is not, or should not entirely be how long you've done a particular task. Most tasks can be mastered in well under 5 years. Experience is how many problems you've worked on and solved in your life. It's one thing to learn a solution (i.e. school), it's another thing to learn a problem. The more you've seen and internalized, the better you will be. Instead we interview for how well so-and-so knows how to write python, or how long as he been a python-engineer. Useless. I want to hear what projects he worked on, what solutions he considered and rejected, etc. I don't care what language he did them in, or if he was a cardboard-box folder for 5 years and has the audacity to apply to a plastic tub sealer position without any industry experience!
- In some fields, mine in particular, I have noticed people intentionally block candidates because they are not "in", simply because they are not already "in".
So in essence we are all responsible for creating this market we're in.
Re:Time for a UNION! (Score:4, Interesting)
Maybe a solution is to move away from the job culture and into service/contract culture. Employment meant something when it was meant to be long term, when companies were stable. Tech world especially moves too quickly. Unless someone really likes the company, wants to be a part of it anyway and accepts that he or she may need to leave when the company's needs change, why be an employee at all? Why go through the pretense of loyalty and security when it doesn't exist? Simply work per project or as a contractor as long as the services are needed, then be quick and nimble and find other clients when the situation changes. Not much different than a taxi driver perhaps. All the while be your own boss and keep your dignity, even if you make a little less (or more, if you are lucky and willing) and accept the short term uncertainty. (Something we evolved to deal with anyway.) Arguably long term uncertainty is worse when you are employed.
Re:So...don't be disposable. (Score:4, Interesting)
This sounds a little insensitive, but, don't be disposable. You're a Windows admin. Great. So are a million other people. If you're a Windows admin who also knows some programming, there are maybe 250,000 people with your skill set. If you add in that you know some Linux, maybe 100,000 people.
What I'm saying is, if you want to be safer than the average employee, don't be average. Enhance your skill set.
Everyone is disposable. All companies care about is $$$.
Here's my experience, working for a *large* corporation... I have 25+ years (14 at my current company) as a Unix system programmer and system administrator with commensurate Linux and Windows experience - I've worked on just about every type of system from PCs to Cray super-computers. I am currently the lead developer of a three-person team on a cross-platform utility (Solaris,RedHat,Ubuntu,Windows) of about 300k lines of code in about 10 programming languages - 75% of which is my code - that is heavily used by our customers.
I was almost laid off last summer, simply because I was one of the most expensive people in my category of people on the contract. Even pleadings from my two managers to the higher ups that laying me off was inappropriate had no effect. The *only* thing that changed their minds was the realization that I also worked on *another* contract onto which some of my work could be (properly) charged.
Re:Turn about's fair play (Score:4, Interesting)
nobody joins a company for life anymore
They never did. Average job tenure today is actually higher than in the past. "Lifetime employment" is mostly a myth that never happened for most people.