About outsourcing?

dealing with outsourcing firms and large employers

• The role of outsourcing firms with large employers like Microsoft, Oracle and Google has grown in economic significance, and is likely to remain strong for the next few years as hiring freezes persist, and human resource needs get filled using contingent workers. Part of this is driven by the regulatory regime, as permanent employees have greater rights than contractors, and thus constitute a greater liability to the employer. Working as a temp is certainly different than working as a permanent employee. It's a lot harder to bargain for changes to compensation and benefits, as there's a parasitic intermediary that maintains control over this. Performance is measured by a client of the outsourcing firm, which makes bargaining complicated. Is it reasonable to consider switching outsourcing firms in order to get a better deal? Most large employers deal with multiple outsourcers, and contract relationships with them seem fairly flexible, as the whole idea of using them is to allow for easy clawbacks.

• Answer:

  Is it reasonable to consider switching outsourcing firms in order to get a better deal? Yes, of course. Most outsourcing firms, however, have you sign contracts that limit what you can do in this regard. Don't expect to be able to stay at your current contract position and switch the outsourcing firm with no other changes. At the extreme you might have a contract which prevents you from working for a competitor. Check state laws to see if this is legal, but they can cause a lot of trouble if you aren't careful. Chances are good they have similar provisions in the contract where you are working that prevents them from re-contracting with you under a different firm. But I know many contract workers that switch contract houses almost as often as they switch contracts simply because that's really the easiest way to get a raise - too many contract houses would rather hire anew than give a raise.