
Startups Finding the Best Employees Are Actually Employed - adamsi
http://www.nytimes.com/2015/06/25/technology/personaltech/start-ups-finding-the-best-employees-are-actually-employed.html
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pjc50
This is bizarre, especially alongside the "We need to rethink employee
compensation" article. On the one hand you have the Uber-style workers who are
being treated as much like interchangeable, disposable parts as possible; and
on the other you have the development staff who are hard to recruit or replace
but are increasingly dissatisfied with being paid partly in lottery tickets.

Maybe "move fast and break things" has reached the point where we're
regretting what's been broken.

~~~
itgoon
Less "move fast and break things", and more "maximized maximization" overkill.

You see it all through these threads: any turnover costs money, a sub-optimal
employee costs too much, everything comes down to cost.

Okay, I get it. IT is a cost center. A good company should minimize those
costs. There's a point of diminishing returns for everything, and I think
we've long since passed it in compensation.

I think things would work better if various managers and leaders could accept
that they just aren't that smart. Rather than try to squeeze every last bit,
accept that they can't, and build it into their businesses.

That would mean scheduling time and money to handle turnover. Which would mean
running a little "fat" all the time. Since the only metric that matters is
"cost", then that doesn't happen.

So, an employee leaves, everyone else falls behind trying to not only make up
their work, but make time to hire and train someone else. Schedules and
budgets are blown. Everyone says "we have to do something", to justify being
called "leaders".

We've reached a point where everybody is out of ideas. There may some tweak
here and there that can be made, but this is it. This is as cheap as things
are going to get.

The sooner employers figure it out, the sooner things will get better.

~~~
a3n
> Since the only metric that matters is "cost", then that doesn't happen.

That cost is short term cost, which as you point out is just accepted instead
of long term cost.

We've probably reached the point where MBAs and the like have very few olives
left to remove from the employee salad.

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DanielBMarkham
I thought this was going to be a story about finding new workers, but instead
it's a story about the latest media topic: subcontracting versus hiring
employees. The author looks to be coming down fairly heavily on the side of
hiring people instead of using subcontractors. In the article's defense, it
does present some of the other side of the argument -- later on in the piece.

I think this is all going to shake out over the next five years or so, with
these markets bifurcating into a more expensive model using employees, and a
less expensive model using contractors. Each will have benefits and drawbacks.

I couldn't help but think of a recent interview with one of the LinkedIn
founders I read recently. As you know, LinkedIn facilitates a lot of
recruiting -- and poaching -- across many industries. The writer asked the
founder how, since he saw the massive churn in IT, did he go about hiring
people?

His response was golden: as part of their hiring and employee management
process, it's made clear that any full-time job is probably temporary. So
there are clear goals that both the company and employee have for growth in
order to reach their next level. The employee might want to work in several
new technologies and gather up some skills they are missing. The company may
want to enter a high-risk, high-stress market to see if there's a business
model there. Everybody gets something they want and the relationship is
understood to both be temporary and mutually-beneficial.

I like this. This is the model I use when assembling and managing technology
teams, and it's the model I've seen work over and over again. Quite frankly
it's the only model I can see working in a rapidly-changing economy. The real
question is how you apply this model to more mundane service-oriented
industries like Uber.

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walshemj
Not to go all Michael Gove here does the NYT not have subs to correct grammar
/meaning it should be "Are Actually Employees"

Title as written implies something totally different - ie the its hard to
recruit

~~~
zem
i first read it as "hard to recruit" too, but it's grammatically correct, just
ambiguous. i wonder if the ambiguity was actually deliberate on the headline
writer's part.

~~~
SilasX
It's not just ambiguous, but wrong. For all X, the best X is is an X.

To convey the meaning they want, the title should be "the best
(workers|peformers) have employee status."

As it stands, it reads like a statement of the fizzbuzz phenomenon: "the best
employees are are already employed somewhere else [and not still looking]".

~~~
zem
no, it's just a rhetorical device; read it as "the best employees are actually
_employed_ [rather than contracted]"

~~~
SilasX
Well, the rhetorical device conveys the wrong thing, so it's not very good:

\- Being contracted is a way to be employed.

\- The contractor can still be an employee of the contracting agency

\- It can mean "employee vs out-of-work" [1] just as much as "employee vs
contractor"

To often, journalists fancy themselves novelists and sacrifice clarity for
flourish. In this context, that's the wrong choice.

[1] What I and the sibling thought.

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noarchy
>According to the Internal Revenue Service, a business that hires an
independent contractor is not entitled to dictate how or when the contractor
performs a job.

Maybe things work differently in the US vs here in Canada, but here
"independent contractors" are often treated like employees, particularly in
IT. You'll often see such contractors, who are technically working under their
own (solo) company rather than for the client - working alongside salaried
employees, doing the same work, under almost identical circumstances.

~~~
jofer
It's the same here in the US... The company I work for hires countless
contractors that are required to work set hours and treated exactly like
employees, except they're not given benefits, etc (in principle, they're paid
more, though).

The biggest oddity is that I know of several "contractors" who have worked
full-time for the same company for _multiple decades_ that are now being laid
off with no severance and no warning.

Obviously, that's the advantage from the company's viewpoint, and you don't go
into one of those roles without being aware that it could/will happen, but
still... I've never understood how being a "contractor" somehow completely
sidesteps employment laws.

~~~
kyllo
It doesn't sidestep the laws. Most likely these people _are_ misclassified and
the employer is breaking the law.

This is why Microsoft only allows contractors to work at Microsoft for 18
months at a time, with a mandatory 6 months in between contracts. They got
busted for misclassifying employees as contractors.

~~~
thoman23
Absolutely correct. I worked 7 years at a mega-bank that always had
"contractors" on staff. Shortly after I arrived, the bank was wrapping up
lawsuits brought by former contractors who (correctly) argued that they were
misclassified and should have been employees. From that point on, the bank
became very strict about enforcing the same 18/6 rule you saw at Microsoft.

------
josefresco
No offense, but these _startups_ by nature have NO IDEA if their employees-
over-subs strategy will work. There's one quote in the article from a VC who
says the following:

"When you look at the level of churn amongst the employee base and the
customers, the high reviews from workers, the high customer-satisfaction
rating — they were proving it from hard-core business metrics.”"

No mention of revenue of course, just _user-survey_ style measurement. Also, a
quote from a VC who invests money into the subject of the article is not
exactly unbiased.

What about data from long established businesses, who have moved from subs to
part-time and full-time employees?

"Full stack startup" reads more like a marketing strategy then one created for
long term financial success.

------
toddan
I dont get it. Why do they not invest in hiring less experienced developers
and make them the best employees.

It may cost more in the short run, but if you invest early in a developer with
little to no experience you get the opportunity to shape that developer into
your tech stack and company.

~~~
yummyfajitas
Some people do that. A friend of mine took such a job - her first developer
job ever. I told her to take the job, learn from the training and earn 2x-3x
her previous salary as a secretary. Then I told her that a year from now she
should start looking for an employer who will pay market rate and won't spy on
her reddit account.

If you do invest in less experienced devs, make sure you can recognize the
ones that are too naive to realize when their value has gone up. Maybe also
use psychological tricks to give them impostor syndrome.

~~~
anbotero
To be honest, yeah, you stated EXACTLY one of the reasons they would never
want to invest in training you: because the first thing you are thinking when
you join what seems to be a nice company is leaving.

Of course they can simply make a calculation on how much time is required to
get that training costs out of you, and I believe companies which offer the
real absurd perks already have so much money that they just need to flush it
out and maybe save taxes on the way of people leaving.

~~~
artmageddon
> because the first thing you are thinking when you join what seems to be a
> nice company is leaving.

Of course it's a risk, but there are two things to consider in counterpoint:

1). If the employee gets adequate training and the chance to contribute to
his/her work with said training, that may improve their happiness and desire
to stay. Both parties win. They win, you lose.

2). Suppose the exact scenario above plays out, you spend money on training,
and they leave sometime thereafter.

3). What if you don't train the employee, but that employee stays? Everyone
loses.

Obviously, scenario 2 is the one you're most worried about, but imo if the
environment is structured in such a way that that employee is looking for ways
to leave at some unspecified point, there are probably bigger problems with
the environment that need to be addressed.

~~~
anbotero
All those things can and probably will happen at some point. It doesn’t take
away that no matter how “good” the company seems to be, the first advice we
are selling to fresh soon-to-be-employees is to look for jobs as soon as they
get into one. We are selling the idea that we don’t even have the will to keep
being where you are comfortable, and simply negotiate better terms when
something starts to rub off. Also, if they leave as soon as possible, like in
#2, the company would have still lost some money.

To simplify, because everyone’s a Hipster now (yeah, pun intended), since now
it’s trending to move every X years from job to job, a lot of neonates do not
even consider simply renegotiating extending or improving the terms of their
current comfort zone.

~~~
artmageddon
> because everyone’s a Hipster now (yeah, pun intended), since now it’s
> trending to move every X years from job to job, a lot of neonates do not
> even consider simply renegotiating extending or improving the terms of their
> current comfort zone.

My experience has been with larger companies of the non-startup variety, so I
think we're looking at this from two different perspectives. Anyway, it seems
like it's been this way for awhile given the way the industry works, I
wouldn't necessarily say it's trending. I do agree that people should leave
for a good reason(better pay, opportunity, whatever), rather than just passing
some specific time frame. As for renegotiating though, in my experience, it's
been difficult if not impossible to try to negotiate the terms of one's
current comfort zone, as you put it. At my last job, I couldn't even be
allowed to adjust the window blind covers due to mid-day sun blinding me, let
alone ask for a raise, because the CEO thought that having the blinds at
different heights looked ugly.

~~~
anbotero
I’ve seen or had such experience in both kinds of companies. It’s happened in
all of them, although in a high percentage on the startup-kind, but remember
this “startup” mentality also invades the employees minds, not just the
company’s. Most of all if one of the new employees has had the “pleasure” of
working on a project with a lot of perks that maybe their colleagues didn’t or
stopped considering given the big company policies, and boasts of them;
quickly everybody starts getting out their stable comfort zones and demand all
these awesome perks. At least those with the will to do so.

As you said, if you couldn’t adjust the window blind covers so you can work
better (not having to succumb to squinting anymore), there is no longer the
adequate comfort zone you’d wish you had, and a good enough reason (believe it
or not) to start looking at other options. It’s happened to me on a job, where
my colleagues would turn off the air conditioning belonging to our whole isle
because 22ºC was too cold, but 34ºC was awesome? Heck that! Complained to
Management after my (I swear I was polite) suggestions to simply bring jackets
were seen as a joke. I do not joke on working environment conditions. I ended
up working at home with most benefits (AC, Internet, etc.) being paid by the
company. From time to time I let out one or two “troll” comments to those
having to work at the office, but I stopped since I realized I don’t really
care about obtuse people feeling offended.

If nothing had happened, I would have definitely started looking at other
options, or who knows, maybe I received an option offer, like I eventually
did.

Risks are everywhere, you just need to be ready to stand up to them and assume
them with responsibility and tenacity.

~~~
artmageddon
> a good enough reason (believe it or not) to start looking at other options.

I usually just picked up my laptop and went to a quiet location to work,
especially out of the sun. It sucked though because I'd have to go from a
dual-monitor setup to looking at a small laptop screen, so I couldn't win. On
top of that annoyance in the immediate present, there were multiple
announcements that the company would have to make cuts to our benefits to stay
afloat, happening at some unspecified date, which further degraded morale. I
and 20 other people got laid off, but I'm in a much better situation now.

------
bad_user
> _If you’ve ever wondered why there are such vast differences in quality
> between Uber rides you’ve taken, this is why: Beyond customer ratings and
> warnings, Uber can’t tell drivers what to do._

The author is implying that if Uber drivers were employees, then they'd behave
better and the experience would be more consistent.

That's just bullshit. There's nothing special about the employee status, the
only difference being that the employment law applies. But there's always a
contract in place when hiring contractors and if anything Uber can demand much
more from contractors than they can from employees. And if you want proof to
the contrary, you only need to look at taxi drivers, many of which are
employees of bigger taxi companies.

Then there's also the issue that the article is comparing cab drivers with
highly skilled professionals, the kind that end up working in startups.

~~~
pmorici
I think you are mistaken. Most taxi drivers are not employees they rent the
taxi from the company on a per shift basis.

~~~
bad_user
It depends on where you live. In my city many of them are employees, I know
because I've got some acquaintances in the business. And we're still having
the same poor service just like everywhere else.

~~~
jegutman
Yea, employees provide great customer service. Totally explains Time Warner
Cable.

------
unimportant
>Of course, creating “good jobs” entails costs. Managed by Q’s workers get an
“above market” wage, plus full medical benefits. “They are the same benefits
that our programmers and engineers get,” Mr. Rahmanian said, because “we
didn’t want to create a company that had a divide between people that worked
in headquarters and the others.”

That's just common sense. If you pay the same salary that some outsourcer pays
you're looking at a high turnover that will be more of a headache and cost
factor than 3-4k extra a year above the average wage for someone in customer
support for example (which is a tiny amount compared to engineer salaries
anyway).

>Munchery, a dinner delivery service, pays drivers a base wage that exceeds
the minimum wage, plus their driving expenses, plus tips. Taken together, it
comes out to about $23 an hour in San Francisco, far higher than most other
delivery jobs. Those who work more than 30 hours a week also get health and
retirement benefits.

I don't know about Munchery and will give them the benefit of a doubt, but
usually companies that offer full benefits for 30+ hours (don't they legally
have to do this anyway in SF?), they just cut anyone off at 29 hours.

Also the "taken together" "wage" is highly misleading if it includes costs of
gas and all the other expenses that one has to pay for a car, in a city where
one doesn't even necessarily have to own one.

Basically the whole story is about common sense, as min wage or slightly above
contractors obviously don't tend to be very loyal or excited about their work
beyond lip service, as pretty much anyone doesn't see this as a long term
situation and will just switch to the next best thing whenever possible.

Employment contracts on the other hand come with notice periods, non compete
etc. that will make switching jobs a lot more of a hassle and make anyone
think twice if they really want to do it.

~~~
sveme
Has anyone ever seen a non-compete clause on service jobs like delivery car
driver or cleaners? Just curious, that would take the thing to a whole other
level.

~~~
protonfish
Jimmy John's [http://www.huffingtonpost.com/2015/04/10/jimmy-johns-
noncomp...](http://www.huffingtonpost.com/2015/04/10/jimmy-johns-noncompete-
agreement_n_7042112.html)

~~~
hobs
Reading that post, about halfway through you find that the judge decided they
simply had no standing to challenge the NC in another case about JJ shorting
wages or underpaying hours, the judge did not rule on its validity.

------
brockers
I thought this was an Onion headline at first.

------
iamthepieman
"Man surprised when alligator, bought to serve as lap-dog, bites off hand"

The real debate is not sharing economy vs entrenched service providers or
contractor vs employee it's why companies (and the investors who give them
money) think they can have their cake and eat it too with regards to employee
loyalty and employee status.

You can only buy customer and employee hearts for so long with quirky parties
and hip ads. Eventually you have to treat people right.

~~~
glesica
My (least) favorite is job ads that list "working for a startup" as a "perk".
Part of the problem is that startups have been romanticized so heavily that
working for one has become its own reward in the eyes of many. As you pointed
out, this kind of delusion only lasts so long.

~~~
thoman23
Well, once you've whiled aways enough years under the fluorescent lights of
your local MegaCorp, you can begin to see the comparative appeal of startup
land.

~~~
dkersten
The opposite is also true.

------
netcan
Having a good PR company can be a massive advantage.

This is a whole NYT article spun out of "company hires employees instead of
contractors." A long one, and it sounds like they're doing something
revolutionary and trend changing.

~~~
davidgerard
If not nickel-and-diming your workers counts as good PR, then _good_.

