
The End of Employees - rotskoff
https://www.wsj.com/articles/the-end-of-employees-1486050443
======
everdev
Having owned a 20+ person services business I can tell you that the
paperwork/taxes/regulations around employees was frustrating. Yes, you can
outsource this stuff, but why make it so complicated? Added to that, it was a
virtual company with employees in 10+ states, it was a nightmare.

It's comparatively much easier to just pay a contractor a higher hourly rate
and let them pick their own health care, retirement, time off policy, etc.

~~~
maxxxxx
I totally agree that employment should be made easier. For example things like
health care and 401k should be handled by the employee instead of the
employer. It would also be nice if there were pension funds that are open to
everyone instead of just employees of one company or government.

But the trend to just relieve employers of the "burden" without giving more
power to the employee is wrong too. For example each state or the whole
country should be one risk pool where everyone can buy in. Same for 401k,
disability and others. A lot of tax deductions should be moved from employer
to employee.

We have to be really careful not to end up with a market where employers have
all the power and the rest are just day laborers without any rights.

~~~
cimmanom
Or, you know, we could have a solid European-style social safety net where
benefits aren't linked to employment AND the individual doesn't have to be an
expert to handle their own benefits.

~~~
Florin_Andrei
That would impinge on a lot of "freedoms".

Or so the mythology goes.

~~~
maxxxxx
The US is too big, has too many states and is more diverse, therefore it's
impossible to learn from others :)

~~~
Florin_Andrei
Right. "The big engine that couldn't" excuse.

------
jasode
The media's desire for a short and snappy title makes it misleading. It's
really about _" The End of (Vertically Integrated) Employees"_.

The various outsourced positions mentioned in the article are still
_employees_. They're just someone else's employees.

Companies just don't want to have vertically integrated employees including
janitors and cafeteria workers. (E.g. Outsource to Aramark food services and
their employees.) They also don't want white-collar employees who aren't
necessarily "core" to their business. (E.g. Outsource to Accenture
Consulting's employees.)

~~~
blub
And they also don't want to have programmers as vertically integrated
employees.

Whoopsie, it looks like we were just well paid peasants all along, instead of
being part of the ruling class.

~~~
paulddraper
Highly paid contractors == peasants

Hmm...

~~~
nerdponx
Depends on how highly paid. A 401(k) with employer match, subsidized group-
rate health insurance, and (in New York) pre-tax transit benefits, is a big
increase in effective income.

And again, this only applies to the highly-paid. Now consider the less-highly
paid.

------
dv_dt
I predict that at some point some of these highly outsourced companies will
face competition from a former internal "contracting" company (or sets of
them) that have been doing substantial portions of the direct work.

If a company has fewer and fewer essential "walls" separating what they do at
the core vs a possible competitor the risk goes up. If one categorizes a
peripheral competency as something that should have been in-house then the
company becomes at risk of getting quickly subsumed by a competition hiring
contractors that the prime company originally trained. And it might not show
up for a while unless some assumption shifts - in the meantime the short term
profits might look pretty good.

Another risk might be the collapse or disruption at a contracted company where
you have less control.

~~~
bena
That's something I would worry about. When Accenture is boasting that they can
do your core competency better than you, you have to start to wonder if
outsourcing your core competency was the wisest move.

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kevin_b_er
This is the goal of the wealthy class and corporations. To treat the common
man as a disposable and interchagable cog. It is always more profitable to not
have to ensure the cog cannot encounter one medical issue that bankrupts them.
It more profitable when you need not show any loyalty to the cog. We can see
the end goal where profit is more important than humanity.

~~~
agumonkey
Pardon the personal anecdote, but as I grew up and went into the highest
education level I could I thought I'd have some kind of beauty in my job. When
I first hit the IT world I was shocked by the similarity with lowest wages
employees. You're a cog. One from a little rare material but still a cog. I
felt no difference between this or being a cashier.

~~~
maxxxxx
In my company they have started to call people "resources" :)

~~~
antisthenes
I've heard there exist entire departments to manage such resources.

The name escapes me at the moment, however.

~~~
maxxxxx
I know that department but it's new to me that people say "a resource in my
team has found....". That's a new level of dehumanization.

------
jedberg
The idea of "employment" is actually an aberration in history. For most of
time, we had peasants and landlords. The peasants would work the land and
would maybe get some food and a place to sleep.

Then industrialization came, and those who were skilled were contractors. They
would do work for someone and get paid for the work they did. Then they would
hustle for more work.

Even in factories, you would show up at the door each day and hope they had
enough work for you, and then get paid as you left.

It was only very recently that factory owners thought about offering steady
pay in exchange for not having to hire a staff every morning.

~~~
chris_wot
Your analogy only mentions factories. Employment covers far more than
factories.

~~~
creaghpatr
Merchants and Mercenaries come to mind

~~~
EthanHeilman
Things in history that are similar to long term employment:

1\. Soldiers e.g. legionnaires in the Roman empires

2\. Filial relationships e.g. a lord and the subjects of their court

3\. Apprenticeship with a master

4\. Membership in a guild that held a monopoly for services within a region

5\. Servants and bonded laborers,

6\. Monks and Priests

7\. Artists, writers, musicians and scholars with wealthy patrons

8\. Professors, teachers and tutors

9\. Various artisans and craftspeople employed in a noble's household

...

There are not exactly the same as modern employment but they do have many of
the same characteristics (long term relationships, valued labor, etc...).

------
rossdavidh
Hypothesis: this is the result of a long period of labor surplus. If, as seems
to be the case in some places like Austin, TX where I live, we are now moving
into an era of labor scarcity, there will come unexpected problems. Like, if
you find that sometimes important functions don't get done on time because
there were not enough people to do it because someone quit unexpectedly, but
it's not technically your employee so you don't have much leverage in figuring
out what the problem is to make sure you don't get caught short-staffed again.

The reason to have an employee is to make sure they are available when you
need them. If there are always a surplus of people willing to be there, then
outsourcing is a way to reduce your costs. But, if that changes, then the
downside of "it's not your problem" becomes more apparent; it still is a
problem that impacts you, it's just not _your_ problem, so you can't do much
about it.

Only some parts of the U.S./world are in a labor shortage situation right now,
of course. But until recently, just about nowhere was, and had not been in a
long time, so I wonder if this is going to be a painful lesson for some
companies.

------
kazinator
You don't have "job security" just because you're an employee. You have a wee
bit more of it, compared to a contractor, and it depends on your package.

Job security is a myth. In computing, it's the subject of a familiar meme: if
you're one of the few people that understands some legacy technology that is
important and hard to replace, then you have job security. It's a pejorative
term: oh, that <expletive> tech, that's just for job security. Nobody who is
"with it" wants to touch it.

~~~
flukus
> if you're one of the few people that understands some legacy technology that
> is important and hard to replace, then you have job security

I've never seen this play out in practice. The PHB doing the firing is 3
levels up and has no idea what the legacy technology is or that the employee
is hard to replace. They'll be more than happy to fire them even when it
screws themselves over. Everyone left has to learn to work with or around this
technology.

------
deviationblue
I am not sure how viable this hiring model is for companies that want to
develop bleeding edge IP. Speaking only about development jobs: contractors
are nomadic, they're not tied or married to your success or failure. From a
developer POV, that's not a bad thing. You can just come in, do your thing,
and move on to the next great adventure. From the employer side, each time you
are training someone new to become familiar with your code base, your company
intricacies and peculiarities, etc. which takes time and effort, and learning
from failure, time for which may not be available. And the end result is that
you may end up with a mish mash that doesn't work well together because the
people who made it are gone or moved on. Also, developing is mentally
exhausting. Not sure what dev, unless they're really desperate, will want to
indulge this and expand that kind of mental effort for less payout or
benefits. Or maybe the company only hires these for less innovative stuff or
CRUD jobs.

------
flankstaek
[http://archive.today/XirsP](http://archive.today/XirsP) \- Link for those who
don't pay for WSJ.

~~~
tambourine_man
Or click the “web” link below the title

~~~
davidwparker
This hasn't worked for a long long time.

~~~
venning
It just worked for me. Opened the "web" link in an Incognito tab on Android
Chrome.

~~~
davidwparker
Not sure why I'm getting downvoted. Here are two gifs as proof. Regular logged
in Chrome + Incognito Chrome. Maybe I need to be in Mobile?

[http://g.recordit.co/f2Ygm2R5zl.gif](http://g.recordit.co/f2Ygm2R5zl.gif)
[http://g.recordit.co/1maj5kq8Qd.gif](http://g.recordit.co/1maj5kq8Qd.gif)

~~~
tambourine_man
>Not sure why I'm getting downvoted.

Perhaps because you stated your personal experience as though it was
universal. It works for me.

>Maybe I need to be in Mobile?

Nope, Desktop here. Maybe geolocation, who knows.

~~~
davidwparker
>Perhaps because you stated your personal experience as though it was
universal. It works for me.

TBH, I thought it was. Maybe they've blacklisted my IP or geolocation like you
suggest or something else.

For the record, I tried it in Android Chrome and it works ok there! Just not
in my desktop Chrome.

OSX 10.12.6 (16G29)

Chrome Version 67.0.3396.99 (Official Build) (64-bit)

------
jorblumesea
While this is convenient and cheaper for businesses, it also removes financial
incentives in place to help businesses succeed. This seems to be short term
advantageous but long term destructive.

Many a good business idea has come from someone who felt they had something to
gain from the company succeeding. Contractors have incentive to put up and
shut up, after all, argue with the boss and you are replaced.

It also gives core business competency to contractors, who can turn around and
give that knowledge or experience to competitors, or even open up shop
themselves.

~~~
onemoresoop
Back to the feudal system where employees will be mere serfs

------
tmoravec
Just a few days back on NYT:

Maybe the Gig Economy Isn’t Reshaping Work After All

[https://mobile.nytimes.com/2018/06/07/business/economy/work-...](https://mobile.nytimes.com/2018/06/07/business/economy/work-
gig-economy.html)

------
Xcelerate
> Janitorial work and cafeteria services disappeared from most company
> payrolls long ago. A similar shift is under way for higher-paying, white-
> collar jobs such as research scientist [...]

Wait, what? What kind of research scientist are we talking about here? The
ones that work at Google Brain, DeepMind, etc., the ones formerly known as
data scientists at Lyft, or the ones employed by universities that research
niche scientific fields?

------
sillyquiet
Isn't the title a bit misleading? It's not the end of employees, it's allowing
other entities to specialize in the 'HR' side of things - staffing, payroll,
etc, and then contracting with those entities. There are still 'employees' in
that sense, they are just 'employees' of the contracting firm.

~~~
bena
Yeah, but there's less permanency.

If I'm contracting a company to do X, who they get to do it could change day
by day. So I can hire an agency to outsource something to for like a three
year contract. That company then churns employees every 6 months under some
slightly sketchy practices.

Not as worrisome with certain skilled jobs, but for unskilled jobs, it's kind
of a rough deal.

Drives wages down while the contractor can still charge decent fees. That and
the contractee can terminate at any time basically.

------
HillaryBriss
> _About 70,000 TVCs—an abbreviation for temps, vendors and contractors—test
> drive Google’s self-driving cars, review legal documents, make products
> easier and better to use, manage marketing and data projects, and do many
> other jobs. They wear red badges at work, while regular Alphabet employees
> wear white ones._

A long time ago, Akio Morita, the legendary head of Sony, commented that, even
if 4 out of 5 employees were mediocre or poorly behaving, there was 1 employee
out of the 5 who was so good, so full of useful ideas and innovation, that
he/she made up for the low efficiency of the others. So, Morita didn't want to
try and cherry pick the employees. He kept everyone.

But Google appears to be pursuing a different strategy.

------
white-flame
For any company that scales up past a certain size, it can be cheaper to run
their own department to handle things at volume, than to pay an outside
company the costs of handling things at volume plus their markup. They can
customize and specialize for their own needs, too.

So there will always be integrated employees somewhere.

------
BadassFractal
Isn't this almost a repeat of what Microsoft was dealing with in the 90s?
Wasn't that whole issue a big deal at one point? I remember them trying to
make as few people as possible blue badges (FTEs), causing all sorts of
resentment from their contractors for many years.

------
osrec
The end of employees, and perhaps the start of payroll simplification?
Literally every country expects their businesses to go through arduous,
arbitrary calculations just to pay people. I run
[https://usebx.com](https://usebx.com) and we're in the process of building
payroll into our app. It has to be one of the most fiddly bits of dev we've
done, with multiple edge cases lurking at every corner to break our logic. I
mean, if you make the admin around employing someone so difficult (and
expensive), it's hardly surprising that businesses do what they can to avoid
it.

------
koverda
paywall ladder: [http://archive.is/XirsP](http://archive.is/XirsP)

------
golemotron
In many ways the "end of employees" parallels the "end of marriage." Many
people take the option of short term relationships. What's interesting is that
society tries to deal with the change by trying to tame the new trend.

For employment, it's government trying to classify Uber drivers as employees
to give them protections. In relationships, it's governments attempting to set
up alimony when co-habitating couples split up.

------
nine_k
Can't help but see this also as the perpetual struggle between business and
state.

State adds regulations, businesses look for areas where regulations are fewer,
and try to do more business at these areas. Then the cycle repeats.

Taxi vs Uber, hotels vs AirBnB, employment vs contracting,..

------
ryanmarsh
There will continue to be less and less security for workers who perform tasks
where training and performance are well systematized and unique judgement and
skill (think classical professionals) is not a value added.

This is the nature of a healthy and functioning economic system. The question
is, how do humans provide for themselves a semblance of predictability and
sustainability to their work and income?

These problems have been solved before. We simply need to expand our thinking
a little. Collective bargaining, wage & hour laws, and various systems of
education have all worked. The problem evolves as the economy evolves. One
thing we should also consider fixing are laws that drive companies to want to
outsource certain types of work.

I'm sure we will figure this out. What concerns me instead, is the full 10%+
of the population who have such a low IQ that the economy has no use for them.
I don't mean this as a normative statement. This is a point of fact. 10% of
the adult population has an IQ so low that there are no jobs you can
effectively train them for. As automation increases the need for the next 10%
will diminish, and so on. This is a problem we have no proven solution for.

------
rongenre
I'm surprised I don't see mention of the oursourced payroll companies:
trinet/insperity, etc. I've used them at multiple startups.

------
diebir
Another failure mode of the American capitalism model. Not an employee, no
benefits, no retirement, no job security, disposable. If enough suckers get
become contractors, maybe we can finally get universal healthcare and a
stronger social safety net.

------
Cypher
when is the end of paywalls?

