So, let’s say you run a largish corporation. You have a large workforce comprised mostly of highly-skilled people with offices all over the place. You expect to continue growing the business, but many of these people work on projects with a duration of a few months to a few years. How do you cut costs further than you already have over the previous 15 years through productivity improvements, ordinary downsizing and so on?
Why, you make everyone a contractor.
IT giant IBM told Personnel Today that the firm’s global workforce of 399,000 permanent employees could reduce to 100,000 by 2017, the date by which the firm is due to complete its HR transformation programme.
Tim Ringo, head of IBM Human Capital Management, the consultancy arm of the IT conglomerate, said the firm would re-hire the workers as contractors for specific projects as and when necessary, a concept dubbed ‘crowd sourcing’.
“There would be no buildings costs, no pensions and no healthcare costs, making huge savings,” he said.
Okay, first of all “crowdsourcing” as it is normally understood is the idea that an organization’s customers, stakeholders and other interested parties can often come up with a solution to a particular problem better than insiders who are often blinded by organizational groupthink and prejudices. Thus the problem is thrown out to the public where people, usually for free or for credit only work away at all or parts of the problem.
Wikipedia is crowdsourced.
What IBM is doing is firing a two-thirds of its workforce and then hiring them back on an as-needed basis, sans benefits like retirement and HEALTH INSURANCE.
At first blush (and second) this looks like a pretty cold-blooded, typical Evil-Big-Corporation thing to do, you have to admit that for a company that is in IBM’s line of work — increasingly in the business of using smart people to solve problems on a project basis, less in the “making stuff” business — then this kind of business model makes a lot of sense. Given the increasing ubiquitousness of broadband connections and applications “in the cloud” that allow for long-distance collaboration it is probably inevitable.
Which brings into even starker contrast the need to get away from the employer-based model of health care financing and to an individual-based, portable model. All of which means we are going to have to revisit the single-payer and cost containment parts of health care again sooner rather than later.
