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The Tech Industry's Legacy: Creating Disposable Employees
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."
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.
quiquid id est, timeo puellas et oscula dantes.
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.
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.
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.