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NY To Replace IT Vendors With State Workers
dcblogs writes "New York state plans to replace as many as 500 IT contract workers with a new type of temporary state worker. The state estimates it can save $25,000 annually for each contracting position that is in-sourced. This is the result of a new law creating 'term appointments,' which strip away some hiring and firing rules that apply to permanent state workers. These term appointment workers are employed 'at will.' Term appointments can be up to five years and workers get state benefits. Proponents of this change said a state IT worker might earn an average of $55 an hour, including benefits, while the state pays its contractors an average of $128 an hour for workers in similar jobs."
On the surface this sounds like a good idea.
Employees are more loyal, and generally care more about the work they are doing than outside contractors.
I have mixed feelings about creating the positions as a special semi-temporary group. Its good in that it allows the state to actually hire needed people, but it sounds like they are second-class employees. Only here temporarily. Not really part of the team, but expected to work extra hard in the hopes of someday getting to be a real employee...
yes, because instead of creating an environment of 40 hours being the norm, lets make everyone work 70 hours a week. That's a win~
The Kruger Dunning explains most post on
Of course, some of that $128/hour the contractor gets goes toward employee benefits... and the cost to the state will be more than $55/hour including benefits...
More like $50/hour goes to the peon doing the actual job, and $78/hour goes to the contract holder.
If someone is passing you on the right, you are an asshole for driving in the wrong lane.
It may not be true, but the wording they've chosen is saying that the $55/hr includes the cost of benefits -- not that the cost is $55/hr plus benefits. So you're comparing hourly cost including benefits to hourly cost including benefits.
If they hire IT workers who match the quality of most NY state workers, they will wind up hiring contractors in the end anyways...
The fact remains that unionized government employees are paid 10-20% higher then private sector counterparts and have 4x the benefits package (about $9500 annual in the private sector vs 38k in a fed gov job). Many of the states who are bankrupt are so due to escalated costs of state employees.
How so?
If they were taking full-timers and laying them off then rehiring them as contractors (with no benefits) that's clearly illegal - it's a process called "conversion".
But they are simply saying that jobs that are currently filled with a contractor will be filled with full-time "at will" employees now. Contractors are already "at will", and the contracting firm is (in theory) paid a lot extra because they can rapidly add or subtract resources as needed. You pay extra for the flexibility. Flexibility which, in this case, the state doesn't need as much.
Now the state is saying "we have people that we know we'll need for 5 years or so. We can't hire them full-time under existing State terms because we cannot eliminate their positions when we don't need them any more, but it's terribly expensive to hire them for 5 years at about triple what they actually get paid." That $128/hr contractor MIGHT be getting paid $45 an hour with benefits. Their firm takes the rest.
I can't even see the State union getting upset about this, these employees will likely be Union members, with the only exception being they have a fixed term of employment rather than "employed until retired or dead" like most State jobs. But it beats working for the contracting firm.
About the only people I can see getting upset about this is, well, contracting houses.
But the State is large enough that it really doesn't need the assistance finding talent, and the employment terms are long enough that people will still jump at the chance. I mean, c'mon, how many people in "real world" IT last more than 5 years in a given job? My record, after over 20 years in the field, is 4 years 10 months, ending in a layoff. I'm really hoping my current employer is "the one I retire from", because they are really nice folks to work for. But lifetime employment is nearly unheard of nowadays.
"This post contains words, known to the State of California to cause thought. Wash brain thoroughly after reading."
Oh, you don't like "free markets"? The government shouldn't look for ways to save money?
It's funny how quickly the most staunch conservative turns into Michael Moore as soon as it's his well-being that's threatened.
You are welcome on my lawn.
Actually, I've worked for a state government and never seen an IT postion paid better than in the private sector, including benefits. In fact they usually were getting 10-20% (low estimate) less than the private sector would offer. A dba in state government will rarely ever (don't know any) get the average salary of the market.
"Contractor" in this sense does not necessarily mean "independent contractor". Most "government contractors" are employees of firms and get paid on W-2s like anybody else. The "contract" is government with firm, not government with individual.
That's only one of the three assertions in your post that are factually incorrect. Except for those three false items, you're right about everything else.
It's actually the pensions that are causing so much trouble for the states. And the reason that the pensions are so high is because starting about 30 years ago, management thought they could safely screw workers by offering them high pension benefits instead of higher pay. Then, when people starting living longer than the actuarials were predicting at the time, management realized its error and started demonizing the very contracts that they pushed.
In every single case that I've looked at, the unions were actually looking for higher pay and went with the pension benefits when management stonewalled. If management hadn't tried to screw workers to begin with, this wouldn't have been such a problem.
This goes for public employee unions as well as automobile companies and other large employers.
You are welcome on my lawn.
Management: IT is expensive - we can save money by OUTsourcing.
5 years later...
Management: IT is expensive - we can save money by INsourcing. ...
5 years later, Go to line 1
Those of us who've been in IT for a while have seen this cycle through a few times. After much reflection, I conclude that there is no such thing as competent management.
Yea, like those socialist countries don't have some serious problems..... Socialism sucks
You know, in the 21st century, using supposedly negative terms like "socialist" are pretty tired. The USA is one of the most 'socialist' nation-states going. The USA spends more per-capita on health care than bogey-man "socialist" countries like Canada and spends billions (trillions?) buying banks, car manufacturers, you name it.
In the USA, the government sticks its nose into who can marry who, spends billions of your dollars saying what drugs people can use, asks me at age 43 for ID when I try to buy a bud lite, posts stupid useless warnings on foods & menus, has ridiculous zero-tolerance policies at schools, goes crazy if Janet Jackson's tit 'slips out'... (think of the children!) and on and on. You won't find many more socialist nanny-states in the world than the USA...
Ever worked for a consulting company?
If you go in and see that a company has a centralized structure, you try to sell them on decentralization. If they're decentralized, you try to sell them on centralization. If they out-source, preach in-sourcing; if they in-source, preach out-sourcing.
Oh, and in both cases, we have just the products and the consulting teams to help you achieve a synergistic paradigm shift to streamline your enterprise and facilitate a win-win situation with end-to-end empowerment for your core team.