Independent Workers Are Essential and Deserve a Fair Deal Google's 'two-tier' workforce reveals a dependence on contract and temporary help and highlights the need to change how companies engage with independent workers
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A report last week revealed details of a controversial "two-tiered" workforce classification system inside Google that uses full-time employees (FTEs) alongside temporary or contract-based workers, which Google calls TVCs (for temps, contractors and vendors) but treats each class of worker very differently. The report is based on an internal training document that Google employees receive upon hire, detailing guidelines for working alongside its droves of temps, contractors and vendors.
The handbook mandates that TVCs are forbidden to attend all-hands meetings, town halls and team off-sites. They are barred from professional development trainings and denied small perks like free food and swag. Shockingly, after the now famous walkout that forced Google to end forced arbitration in cases of sexual harassment, it's been revealed that Google's updated policy only protects FTEs, not TVCs. To put that into perspective, TVCs comprise more than 50 percent of Google's total workforce.
Why does one of the world's most innovative companies impose such inherently problematic policies? The answer is simple: to cut costs and keep information close. The more FTEs Google employs, the more the company spends on healthcare benefits, retirement costs, childcare services and more. By keeping more than half of its "staff" out of important meetings, the company keeps a much tighter seal on proprietary information, which is ironic given that Google knows everything there is to know about millions of people around the world.
What will policies like this mean for Google and other companies in the future, given that independent work is rapidly on the rise? At the moment, the number of independent workers in America is an eye-popping 42 million people. For roughly 47 percent of the working-age population, independent work is or has been part of their career path.
Given the number of people Google employs, it's not surprising that a large number are independent workers. But allowing more than 50 percent of their workforce to be TVCs comes with some risk. These people hold essential roles at the company. They're not "temps" in the old sense of short-term help, performing objectively measured office tasks like filing documents and answering phones. These people are running engineering teams, developing marketing campaigns and influencing product decisions. TVCs who are essentially cut off from Google's internal communications, incentives systems and company culture are less likely to reflect the values and mission of the company, which is the very thing that makes Google a special company.
Google execs should be more concerned about this problem than saving a couple bucks: under the current system, the company risks losing its soul.
The practice of using temporary workers to plug holes and perform specialized tasks has been around for decades. Temp workers can serve a multitude of functions for employers such as filling temporary vacancies during maternity and medical leaves, as well as work-volume increases during the holidays or busy seasons. They are also beneficial when a specific skill set is needed. But when more than 50 percent of a company's workforce is temporary or contract-based, and they are consistently denied access to the information and services that will better their performance, the costs start to outweigh the benefits.
This is not just Google bashing. Government has a major role to play in solving the problem (just as government played a major role in creating it). The legal designation of employees is a growing conversation in Silicon Valley and will continue to be until worker classification laws are updated to acknowledge the rise in independent work. Washington cannot continue to pretend this is not happening. Many companies would do right by contract-based workers and freelancers if they were allowed to by law. That could mean making the freelancer, contract-based worker or temporary worker feel more integrated into the company culture, but it could also mean funding healthcare plans, FSAs and retirement benefits. A system of portable benefits which allows workers to access contributions outside of a traditional employer-employee relationship, is a necessary step toward ensuring that independent workers have stability and security. These efforts mark an important leap forward in modernizing our social safety net to meet the needs of the modern workforce.
Sen. Mark R. Warner (D-VA), Sen. Michael Bennet (D-CO) and Sen. Ben Sasse (R-NE) have done solid work in framing the conversation around portable benefits. Now it's time for Congress to act.
The bottom line is, the world's largest companies are going to continue to leverage independent workers because these people are vital to the success of their businesses. It's not fair, moral or smart to continue pursuing antiquated policies at the expense of the people who serve as the backbone for your enterprise.