"Silicon Valley's dirty secret: Using a shadow workforce of contract employees to drive profits"
From CNBC:
- This year at Google, contract workers outnumbered direct employees for the first time in the company's 20-year history.
- This trend is on the rise as public companies look for ways to trim HR costs or hire in-demand skills in a tight labor market.
- Some 57.3 million Americans, or 36% of the workforce, are now freelancing, reveals a 2017 report by Upwork.
- Workers
with jobs in higher wages are more likely to have their services
contracted out than jobs associated with lower wages, according to a
recent study.
As the gig economy grows, the ratio of contract workers to regular
employees in corporate America is shifting. Google, Facebook, Amazon,
Uber and other Silicon Valley tech titans now employ thousands of
contract workers to do a host of functions — anything from sales and
writing code to managing teams and testing products. This year at
Google, contract workers outnumbered direct employees for the first time
in the company's 20-year history.
It's not only in Silicon Valley. The
trend is on the rise as public companies look for ways to trim HR costs
or hire in-demand skills in a tight labor market. The U.S. jobless rate
dropped to 3.7 percent in September, the lowest since 1969, down from
3.9 percent in August, according to the Bureau of Labor Statistics.
Some 57.3 million
Americans, or 36 percent of the workforce, are now freelancing,
according to a 2017 report by Upwork. In San Mateo and Santa Clara
counties alone, there are an estimated 39,000 workers who are contracted
to tech companies, according to one estimate by University of
California Santa Cruz researchers.
Spokespersons at Facebook and Alphabet declined to disclose the
number of contract workers they employ. A spokesperson at Alphabet cited
two main reasons for hiring contract or temporary workers. One reason
is when the company doesn't have or want to build out expertise in a
particular area such as doctors, food service, customer support or
shuttle bus drivers. Another reason is a need for temporary workers when
there is a sudden spike in workload or to cover for an employee who is
on leave.
"At the end of the day,
TVC (temporary, vendor and contractual workers) are an important part of
the workforce, but they are not Google employees and not privy to the
same confidential company information that full-time Googlers are," the
spokesperson said.
"Our vendor workers are
valued members of our Facebook community, and we are committed to
providing a safe, fair work environment to everyone who helps Facebook
bring the world together," said Anthony Harrison, director of media
relations at Facebook. Spokespersons at Amazon and Netflix did not
respond to requests for comment....MUCH MORE
