Wednesday, March 4, 2009

Microsoft Cuts Temporary Contractor Pay

A wise pet coordinator at the local Humane Society once said, “There are no bad dogs, just bad masters.”

Or, as the old expression goes, a good workman never blames his tools.
Blame it on a bad economy, or blame it on the granddaddy of outsourcing and profits over people, but Microsoft is blaming its pay cuts for the temporary workers it hires on the bad economy.

Todd Bishop at Tech Flash explains:

“Microsoft, citing the "realities of a deteriorating economy," will reduce by 10 percent the amount it pays employment agencies for many of its temporary workers -- and cut by 15 percent the target billing rate for future temporary work.”

Bishop adds that this decision is expected to influence the tech job market and may require the agencies “to reduce their already slim profit margins or cut worker pay.” Some say they will even need to do both. The decision affects temporary workers in existing Microsoft assignments who will either need to “accept pay cuts or take their chances in an increasingly difficult economy.”

Meanwhile, the Seattle based Washington Alliance of Technology Workers is unable to help the struggling local technology professionals. President Les French cites the distinct problem of trying to organize temporary workers under the frequency with which they change jobs, saying that it is “like hitting a butterfly with a BB gun.” French explains

"When Microsoft hires a full-time employee, it's a lot different than when they contract an agency to provide the worker on a temporary basis. They're relieved immediately of a lot of legal obligation, and certainly there's a buffer between them and any organizing effort. So the organizing effort has to be with the temporary agency. Then again, you still have to meet the requirements of defining the business unit -- who's in it, whose nose is going to be counted. ... You can't really nail down the unit or the group that you're trying to organize."

Hope is the bread of the poor. Should the board of Microsoft ever decide to opt for humane hiring practices -- such as recruiting local professionals for full time work with non-slave labor compensation plans --- nevermind. That would have to be when hell freezes over. In the meantime, keeping billionaire CEOs and fawning sycophants honest is no doubt a menial task, but somebody has to do it, whether it is unions or tech groups or non-co-opted journalists or ‘honest’ politicians. But if Microsoft is the poster boy for technology labor arbitrage, professionals in the field can expect to see this temp worker, low wage rent-a-tech programming business model flourish that benefits the upper 3% of corporate executives at the expense of local communities.



Citizen Carrie said...

What's interesting to me is that I really didn't know that much about Microsoft's temps/contractors until the pay cut thing hit the fan. It's amazing how a lot more details came spilling out.

The Tech Flash article mentioned a difference between "a-dash" employees and "v-dash" employees. I take it the "a-dashers" are the lowest on the totem pole, and probably a class that can be unmercifully exploited with little consequence. Based on how the Big 3 have been treating their contractors for years, pay cuts for "a-dash" workers will probably become an annual tradition. The "a-dashers" will probably find that their contracts will be of shorter and shorter durations, and then they'll find out that contract durations that are spelled out will become a thing of the past. They'll be hired to start working, after a few months, they'll get a pay cut, then a few months later they'll be escorted out the door, until the project gets so f*cked up that a year later they're brought back on, for lower pay, of course. (If this isn't already happening.) I hope my predictions are wrong for their sake.

I'm sure that eventually "v-dash" employees will be next in line to get their pay cuts, and if anything, the v-dashers will either be culled or they'll end up being classified as a-dashers.

I also predict that some contract shops will go out of business or "consolidate". After awhile, with so many contractors coming and going on so many short-term projects, Microsoft can start terminating a lot more of them, with no announcements, and no one will know the difference.

The comment about contractors fleeing for Silicon Valley probably made you laugh, because YOU have seen all of the layoffs in your area.

Anonymous said...

Q. What is Microsoft's problem? With millions of educated Americans unemployed/underemployed, their HR department and human trafficking "contractors" and recruiters should be doing an about face and sending those H-1b's back.

A. Inhumane Microsoft and wannabes know nothing of quality and integrity.

Seattle Snoop said...

Added from article:

One former contractor, now a full-time Microsoft employee, describes the particular need of technology union representation for contract workers:

“Speaking as a former MS contractor (now employee), I don't see why unionizing is considered such a bad thing. People should read more history and not mindlessly repeat the lame anti-socialist rhetoric. The staffing firms have been screwing their contractors over for years. (Just compare your hourly rate to the rate they bill MS.) Organizing would be a positive force against that and give you more protections & benefits overall. Sure it would be a challenge but these days we need to rise to those.”